2013 (7) TMI 440 - AT - Central Excise

Manufacturers must pay duty promptly to avoid penalties and interest, Tribunal stresses consistency in Maximum Retail Prices

The Tribunal directed the applicants, engaged in manufacturing motor vehicles, to deposit the remaining duty amount of Rs.94,37,794/- and Rs.12,36,739/- ... Stay Application – Pre-deposit of amount - alteration in MRP - Applicants made import of automobile parts liable for CVD - for the purpose of CVD - Applicants declared an MRP to the Customs authorities - Goods were assessed and appropriate duty was paid - Applicants availed credit on the CVD paid - Goods cleared to domestic market after repacking amounting to manufacture as per the Chapter Note to Chapter 87 of the Central Excise Tariff by declaring the MRP much less than the MRP declared to the Customs authorities - Held that:- There cannot be different Retail Price for the purpose of CVD and for the purpose of Excise duty in respect of the same goods - Applicants failed to make out a case for waiver of the pre-deposit of the dues - Directed to deposit the amount of duty within eight weeks. Decided against the Assessee. Issues:Waiver of pre-deposit of duty, declaration of MRP for CVD and Excise duty, repacking of imported automobile parts, validity of demands, differentiation in declared MRP for Customs and Excise purposes.Analysis:The judgment concerns applications for waiver of pre-deposit of duty totaling Rs.94,37,794/- and Rs.12,36,739/-, along with interest and penalties, filed by applicants engaged in the manufacture of motor vehicles importing parts. The issue revolves around the discrepancy in declared Maximum Retail Price (MRP) for Customs and Excise duty payment purposes. The applicants declared higher MRP for Customs to pay CVD, then repacked and declared lower MRP for Excise duty. The Revenue argued that the declared MRP for Customs was higher without evidence of enhancement by authorities, justifying the demands. The Tribunal found the applicants failed to justify the lower MRP for Excise duty, emphasizing the inconsistency in MRP declaration for the same goods. The judgment directed the applicants to deposit the remaining duty amount within eight weeks, with waiver of interest and penalties upon deposit.The Tribunal noted that the applicants imported automobile parts subject to CVD, declaring MRP to Customs authorities for duty assessment. After repacking, the applicants declared lower MRP for Excise duty, availing credit on CVD paid. The Revenue contended the higher MRP declared for Customs was valid, as assessed by authorities, while the lower MRP for Excise duty lacked justification. The judgment highlighted the Chapter Note to Chapter 87 of the Central Excise Tariff, considering repacking as manufacturing. It emphasized the inconsistency in declared MRPs for CVD and Excise duty, concluding that different MRPs for the same goods were impermissible.The judgment rejected the applicants' contention that the demands were unsustainable, emphasizing the discrepancy in declared MRPs for Customs and Excise duty. The applicants failed to provide a valid explanation for the lower MRP declared for Excise duty after repacking. The Tribunal found the applicants had already paid a substantial amount during the investigation, directing them to deposit the remaining duty within eight weeks. Upon compliance, the pre-deposit of interest and penalties would be waived, with recovery stayed during the appeal process. The judgment underscored the importance of consistent MRP declaration for Customs and Excise duty assessment, denying the applicants' request for waiver based on the lack of a compelling case.