Retail sale price valuation fails for leased imported equipment where no statutory sale and no RSP declaration requirement exist

Imported digital video projectors and decoders supplied on lease to theatre owners were not liable to countervailing duty on a retail sale price basis under Section 4A because RSP valuation applies only where the goods are legally required to declare retail sale price and are covered by the relevant notification. The Tribunal found that the arrangement was a pure lease, with no transfer of property or sale in the statutory sense, so the legal metrology requirements and Rule 6 on retail sale price declaration were not attracted. On that basis, RSP-based assessment was rejected and the demand was set aside.

---

---

Issues: Whether imported digital video projectors and decoders supplied on lease to theatre owners were liable to countervailing duty on retail sale price basis under Section 4A of the Central Excise Act, 1944.

Analysis: Liability to assess countervailing duty on the basis of retail sale price arises only when the imported article is required to declare retail sale price under the legal metrology law and the article is covered by the notification issued under Section 4A. The arrangement in the present case was a lease arrangement, the equipment remained with the importer, and there was no transfer of property or sale in the relevant sense. The Tribunal applied the earlier decision on identical facts concerning leased equipment, holding that the definition of sale under the legal metrology framework was not attracted. As the goods were not intended for retail sale and were used only for service to theatre owners, Rule 6 relating to declaration of retail sale price did not apply.

Conclusion: The imported goods were not assessable to countervailing duty on retail sale price basis and the impugned order could not be sustained.

Final Conclusion: The appeal succeeded and the demand based on retail sale price valuation was set aside.

Ratio Decidendi: RSP-based assessment of imported goods is permissible only where the goods are legally required to bear retail sale price and the transaction involves sale within the governing statutory definition; a pure lease without transfer of property does not attract such valuation.

---