MRP-based valuation for imported lipsticks rejected where pieces weighed under threshold and transaction value applied instead.

Imported lipsticks sold by number, but weighing less than 10 grams per piece, were held not to fall within the packaged commodity regime for MRP-based valuation where sale on a weight basis was not required. The Tribunal applied its earlier view that, in such circumstances, duty is assessable on transaction value rather than on marked retail price. It rejected the Revenue's reliance on the mere fact that the goods were imported in numbers, since that fact alone did not trigger MRP-based assessment. The stated legal effect is that the MRP demand was unsustainable and valuation had to be made on transaction value.

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Issues: Whether imported lipsticks sold in numbers, but weighing less than 10 grams per piece, were liable to duty on MRP basis or were assessable on transaction value.

Analysis: The Tribunal followed its earlier view that where the imported goods are not required to be sold on weight basis and each piece weighs less than the relevant threshold, the provisions governing MRP-based valuation under the packaged commodity regime do not apply. In such circumstances, duty is to be assessed on transaction value and not on the basis of marked retail price. The Tribunal also rejected the Revenue's reliance on the mere fact that the goods were imported in numbers.

Conclusion: The MRP-based duty demand was unsustainable and the assessee was entitled to valuation on transaction value.

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