Compounded levy based on retail sale price: no deemed price for unmarked export pouches, and partial stay only.

A compounded levy notification linking duty to the retail sale price of pouches was examined in relation to exported pouches without a printed retail sale price. The record showed a prima facie basis for treating 2 gm pouches as falling in a higher duty slab, because 1.8 gm pouches were sold at the lower price and no material showed that 2 gm pouches were also sold at that price. The notification, however, did not expressly create a deemed retail sale price for unmarked export goods. In these circumstances, complete waiver of duty, interest and penalty was declined and partial stay was considered appropriate.

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Issues: Whether the appellant was entitled to complete waiver of the duty demand, interest and penalty under the compounded levy notification, and whether a deemed retail sale price could be inferred for exported pouches on which no retail sale price was printed.

Analysis: The notification fixed the duty payable per packing machine with reference to the retail sale price of the pouch, and the material on record indicated that the assessee had opted for the lower slab applicable to pouches up to Rs. 1.50. On the facts, the Tribunal found a prima facie basis to treat the 2 gms. pouches as falling in a higher slab, since the price structure disclosed that pouches of 1.8 gms. were sold at Rs. 1.50 and no material was produced to show that 2 gms. pouches were also sold at the same price. At the same time, the notification did not expressly provide for a deemed retail sale price or MRP for exported goods without printed RSP, so total waiver was not justified. Balancing the prima facie case with financial hardship and revenue interest, partial relief was considered appropriate.

Conclusion: Complete waiver was declined. The appellant was granted partial stay by waiver of 40% of the duty, interest and penalty, and directed to deposit the remaining 60% of the duty demand.

Ratio Decidendi: Under a compounded levy notification that links duty to retail sale price, complete waiver is not warranted where the record prima facie shows applicability of a higher duty slab, even though the notification does not expressly authorise a deemed retail sale price for unmarked export pouches.

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