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Issues: (i) whether the goods seized from the container and the goods found in the godown were imported in packaged form so as to attract retail sale price based assessment and confiscation for wrong declaration of MRP; (ii) whether the goods cleared earlier under the bills of entry were liable to re-determination of MRP and consequent duty and confiscation; and (iii) whether penalty under Section 114A of the Customs Act, 1962 could be sustained.
Issue (i): whether the goods seized from the container and the goods found in the godown were imported in packaged form so as to attract retail sale price based assessment and confiscation for wrong declaration of MRP
Analysis: The goods were found with cartons, stickers, product details and MRP markings, and the record showed that the importer itself had declared MRP in the bills of entry while the statements of its officers and the seizure material indicated that the packages were meant for sale in the market after affixing retail price labels. The statutory scheme under the proviso to Section 3(2) of the Customs Tariff Act, 1975, read with Section 4A of the Central Excise Act, 1944 and Rule 6(1) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, required declaration of retail sale price on the packages. On those facts, the plea that the goods were not package commodities was rejected.
Conclusion: The goods were held liable to retail sale price based assessment and confiscation for misdeclaration of MRP.
Issue (ii): whether the goods cleared earlier under the bills of entry were liable to re-determination of MRP and consequent duty and confiscation
Analysis: The same pattern of import, stocking and sale was established through the seized labels, invoices, price lists, statements and the goods found in the godown. The Court treated the earlier clearances as covered by the same modus operandi and held that the importer had failed to show that those goods were outside the seized consignments or that the declared MRP was correct. The argument that MRP based assessment could not apply prior to 01.03.2008 was rejected because the levy flowed from the statutory requirement to declare retail sale price on goods specified for such assessment. The absence of machinery provisions did not defeat the levy.
Conclusion: The goods cleared earlier were held liable to re-determination of MRP and to the resultant duty and confiscation consequences.
Issue (iii): whether penalty under Section 114A of the Customs Act, 1962 could be sustained
Analysis: Once the duty demand was upheld on the footing of suppression and misdeclaration, the statutory consequence under Section 114A followed. The challenge to enhancement of penalty was therefore not accepted.
Conclusion: The penalty under Section 114A was sustained.
Final Conclusion: The challenge by Revenue succeeded and the order under appeal was set aside to the extent it had granted relief to the importer, with the consequence that the duty, confiscation and penalty findings were restored in substance.
Ratio Decidendi: Where imported goods are shown by contemporaneous material and statements to be package commodities meant for sale with a declared retail price, the customs authorities may apply retail sale price based assessment and impose confiscation and penalty for incorrect declaration of MRP.
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