Special Additional Duty exemption applies to pre-packaged retail imports sold with MRP labels under Legal Metrology rules.

Pre-packaged imported goods intended for retail sale qualified for exemption from 4% Special Additional Duty because they were required to bear retail sale price under the Legal Metrology regime, carried MRP/RSP labels, and were sold locally in the same condition through distributors on payment of VAT/CST/ST. The importer was registered under the Legal Metrology law and had obtained permission for label affixation where required, while the goods did not fall within the exclusion for industrial or institutional consumers. Allegations of suppression were not supported, as the nature of imports was disclosed in the bills of entry and known to the department, making the dispute revenue neutral and weakening extended limitation.

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Issues: Whether the importer was entitled to the benefit of exemption from 4% Special Additional Duty on the imported pre-packaged goods intended for retail sale.

Analysis: The exemption notification applied only to pre-packaged goods intended for retail sale where the package was required to bear retail sale price under the Legal Metrology regime. The imported goods were found to be pre-packaged, with MRP/RSP labels affixed, and were sold locally in the same condition through channel partners or distributors on payment of VAT/CST/ST. The importer was registered under the Legal Metrology law, had obtained permission wherever labels were affixed at the customs area, and the goods did not fall within the exclusion for industrial or institutional consumers. The demand also rested on allegations of suppression, but the record showed disclosure in the bills of entry and departmental knowledge of the nature of imports, making the dispute revenue neutral and undermining invocation of the extended limitation period.

Conclusion: The conditions of the exemption notification were satisfied and the importer was entitled to the SAD benefit.

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