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Issues: (i) Whether the demand of customs duty on MRP basis was sustainable for the imported packages. (ii) Whether the extended period of limitation could be invoked on the basis of suppression or misdeclaration.
Issue (i): Whether the demand of customs duty on MRP basis was sustainable for the imported packages.
Analysis: The packaged commodities rules apply MRP declaration only to packages intended for retail sales. The definitions of retail package and ultimate consumer exclude industrial or institutional consumers, and the exclusionary provision for packages meant for exclusive industrial use also applies. The imported goods were packed for industrial use only and, in any event, the packages exceeded 25 kgs, bringing them within the statutory exception from MRP affixation. On that footing, assessment on MRP basis was not justified.
Conclusion: The demand on MRP basis was not sustainable and was held to be against the assessee.
Issue (ii): Whether the extended period of limitation could be invoked on the basis of suppression or misdeclaration.
Analysis: Extended limitation under the customs law requires fraud, collusion, wilful misstatement, suppression of facts, or deliberate contravention. The dispute was one of interpretation, the facts were within the department's knowledge, and no suppression with intent to evade duty was established. The larger period therefore could not be invoked.
Conclusion: Invocation of the extended period of limitation was unsustainable and was against the revenue.
Final Conclusion: The impugned demand was set aside in full, and the appeal succeeded with consequential reliefs as permissible in law.
Ratio Decidendi: MRP-based assessment is permissible only for packages intended for retail sale to an ultimate consumer, and the extended limitation under customs law cannot be invoked absent the statutory ingredients of suppression or wilful evasion.
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