2012 (8) TMI 323 - AT - Customs

Appeal granted for Customs duty exemption on standalone units sold together. VAT compliance key.

The Tribunal allowed the appeal, granting the appellant the benefit of exemption from Special Additional duty of Customs under notification no. 29/2010. ... Import of indoor units of split air conditioners in pre-packed form from Japan – denial of benefit of exemption from Special Additional duty of Customs under notification no. 29/2010-Cus – Held that:- Notification no. 29/2010 grants exemption to a pre-packaged goods intended for retail sale in relation to which there is a statutory requirement of declaring on the package thereof the retail sale price of such article - indoor units imported by the appellant satisfies those requirements - benefit of Notification no. 29/2010-Cus dated 27.02.2010 is available to the appellant Issues:- Benefit of exemption from Special Additional duty of Customs under notification no. 29/2010-Cus- Interpretation of 'pre-packaged goods intended for retail sale'- Consideration of sales of imported indoor units along with outdoor units- Application of Standards of Weights and Measures Act, 1976Analysis:The case involves an appeal against the denial of the benefit of exemption from Special Additional duty of Customs under notification no. 29/2010-Cus. The appellant, a company importing indoor units of split air conditioners, claimed the exemption but was denied by the lower authorities. The dispute centered around whether the imported indoor units, although pre-packaged and affixed with MRP labels, were intended for retail sale as stand-alone articles or only as complementary units with domestically manufactured outdoor units.The appellant argued that the imported indoor units satisfied the definition of 'pre-packaged commodity' under the Standards of Weights and Measures Act, 1976, and were sold as stand-alone articles in many cases, supporting their claim with invoices. They contended that the lower authorities erred in concluding that the goods were not intended for retail sale based on the sale of complementary units. The appellant also cited precedents where similar issues were considered favorably by the Tribunal.The Revenue, represented by the learned AR, supported the findings of the lower authority, maintaining that the indoor units were not intended for retail sale due to their sale along with outdoor units.The Tribunal carefully considered the submissions and held that the indoor units imported by the appellant satisfied the requirements for exemption under notification no. 29/2010. Despite being sold along with outdoor units, the invoices demonstrated that the indoor units were also sold as stand-alone articles in retail. The Tribunal referenced a previous judgment to support their decision, emphasizing that as long as the imported goods were sold as such, the benefit of exemption could not be denied. Additionally, the Tribunal noted that the appellant was discharging VAT liability on the retail sale of imported indoor units, aligning with the objective of levying Special Additional duty to ensure parity with local taxes.In conclusion, the Tribunal allowed the appeal, granting the appellant the benefit of Notification no. 29/2010-Cus and providing consequential relief.