Retail-sale exemption for imported air conditioner units upheld where MRP-labeled goods were sold stand-alone and with outdoor units.

Imported indoor units of split air conditioners, packed with MRP labels, qualified as pre-packaged commodities intended for retail sale under the Packaged Commodities Rules. The exemption from special additional duty under Notification No. 29/2010-Cus was not lost merely because the units were also sold with domestically manufactured outdoor units, since the invoices showed retail sale of indoor units as stand-alone articles and in mixed combinations. The evidentiary record did not show that the goods were outside the retail-sale category, and VAT had been paid on such sales. On that basis, the exemption was held available.

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Issues: Whether imported indoor units of split air conditioners, packed with MRP labels and sold both as stand-alone articles and along with domestically manufactured outdoor units, were entitled to exemption from special additional duty under Notification No. 29/2010-Cus dated 27.02.2010 as pre-packaged goods intended for retail sale.

Analysis: The notification extends exemption to pre-packaged goods intended for retail sale where declaration of retail sale price is statutorily required. The imported indoor units satisfied the definition of pre-packaged commodity under the Packaged Commodities Rules and were not shown to be excluded from retail sale merely because they were sometimes sold in combination with outdoor units. The sale invoices showed retail sale of the indoor units as stand-alone articles as well as sales where indoor and outdoor units were sold in different numbers. The evidentiary record therefore did not support the finding that the goods were not intended for retail sale. The exemption could not be denied when the imported goods were sold as such and VAT was paid on such retail sales, consistent with the object of SAD.

Conclusion: The exemption under Notification No. 29/2010-Cus dated 27.02.2010 was available to the appellant.

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