TaxTMI 
TaxTMI 
2018 (7) TMI 925
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....e of an article imported into India, in relation to which it is required/ under the provisions of the Standards of weights and Measures Act, 1976 or the rules made there under or any other law for the time being in force to declare on packages there of the retail sale price of such articles and in which article/class or description of article is notified under Section 4A of the Central Excise Act, 1944, the value of the imported article (for calculating Additional duties of Customs -CVD) shall be deemed to be retail sale price declared on the imported article less such amount of abatement, if any, from such retail price as the Central Govt allows in respect of such like article under Section 4A (2) of the Central Excise Act, 1944. 4. Acting on an intelligence that the appellant was subsequently altering the MRP declared in respect of the said goods, investigations were carried out by the Revenue. During the course of investigation statements of the Director of the firm, Shri Rakesh Dugar was recorded and it was found that the appellant had declared the invoice value for the purpose of assessment of basic customs duty along with declaration of the MRP as per the sticker attached to....
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....under Section 3 of the Act. In as much as their goods fall under Chapter heading 8521 which are notified in the 3rd Schedule, the activity of altering of RSP shall amount to manufacture, in which case there cannot be any allegation of alteration of RSP on the imported goods and the consequent mis-declaration of RSP under the Customs Act, so as to make them liable to differential duty of CVD. Accordingly, they have contested that there could only be a demand of central excise duty in as much as the activity undertaken by them constituted a deemed manufacture under Section 2 (f) (iii) of the Act. As the duty raised against them is duty of customs, which is not payable by them, they prayed for vacating the SCN. 6.2 In any case and in any view of the matter they submitted that even the duty of excise would not be leviable in as much as they would be entitled to the benefit of SSI Notification No. 8/2003-CE dated 01.03.2003. Accordingly, they contested before the adjudicating authority that the benefit of SSI notification be extended to them as they have satisfied the conditions of the said notification. Even if they are required to pay any excise duty they would be entitled to the Cen....
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....ucement. The appellant contended that the statements were not retracted by deponents only due to fear and eminent backlash by the investigators and the "lurking fear of the unknown" is evident from the fact that they were forced to cough up Rs. 10,00,000/- towards duty liability, even before the finalization of the goods. The confessions, if at all are required to be compared with the rest of evidence on record as held by the Hon'ble Supreme Court in the case of Sarwan Singh Vs. State of Punjab - AIR 457 - SC-637. Similarly reliance was made upon the Hon'ble Supreme Court decision in the case of Mohavir Viswas Vs. State of Bengal - 1995 (2) SC 25 as also upon the decision in the case of State of Haryana Vs. Rajendra Singh - 1996 (2) Scale 488, laying down that it is the duty of the Court to first ascertain the voluntary and true nature of the statement and such confessions cannot be used against the makers in the absence of other evidences and cannot be held as substitute to proof. 7. The adjudicating authority did not find favour with the above pleas of the assessees and accordingly confirmed the demands by rejecting the MRP declared at the time of import of the goods, along ....
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....h goods less such amount of abatement. As such, it becomes clear that MRP, for the purpose of being adopted as assessable value, is required to be actually declared on the goods. The Revenue's entire case is based upon the price list so recovered by them from the importer read with the statements. There is no evidence of the fact that the appellants have actually affixed the imported goods with stickers bearing high MRP. As regards evidentiary value of the statement of Shri Rakesh Dugar and other representatives of distributors of retail shops, it is to be kept in mind that the same are only to the effect that the goods were sold in open market at higher MRP. There is virtually no direct evidence on record to show that the goods were actually affixed with the stickers of higher MRP. Admittedly, the Standards of Weights and Measures Act require a person to affix the goods being sold in the market with a sticker of MRP. In the absence of any evidence of actual affixation of the higher MRP sticker to the goods in question, we find no justification for upholding the Revenue's case. Our attention has also been drawn to the amendments carried out in the provisions of Section 4A, wh....
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....ection 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules. It can be seen from the above preamble to the Notification No. 13/2008-C.E. (N.T.), Central Government made the rules as applicable for sub-section (4) of Section 4A w.e.f. 1-3-2008. In the cases in hand, for the period prior to 1-3-2008, the entire exercise of the Revenue in redetermining the RSP even if RSP is not in accordance with the law, is faulty and not in accordance with the law, as prescribed manner of redetermination of RSP was brought into statute only from 1-3-2008. We find that once the Central Government has not framed the rules for redetermining the RSP in a case where the RSP declared on the package was sought to be rejected, though being empowered, authorities had no power to redetermine the RSP in any manner; more so in a manner adopted in these appeals. It is also provided in the statute, that as per sub-section (4) of Section 4A of the Act, the manner has to be prescribed only by the Central Government by rules, which came into force only from 1-3-2008, which would also indicate that the provisions of Section 4A (4) could not have been operationalised....
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....ve decisions, on this count, also we find no reasons to uphold the demand. 10. Even if the Revenue's allegations that the goods in question were affixed with stickers of higher MRP are accepted, we note that such allegations by the Revenue would lead to inevitable conclusion that the goods, after clearance from the customs, underwent manufacturing process. The provisions of Rule 2 (f) of the Central Excise Act, as it stood at the relevant time, read as under:- "23.7 In this connection, kind reference is drawn to Section 2 (f) of the Central Excise Act (CEA), which reads as under:- (f) 'manufacture' includes any process:- (i) incidental or ancillary to the completion of a manufactured product, and (ii) which is specified in relation to any goods in the section or Chapter notes of 11 [The First Schedule] to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture; or (iii) which in relation to the goods specified in the Third Schedule, involves packing or repacking of such goods in a unit container or labelling or re-labelling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the....
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....ing out of the said activity would admittedly be a different product than the one from where the manufacturing process was started. If the final product, may be involving a simple procedure of manufacture, is different than the one imported by the assessee, the MRP affixed on such manufactured and excisable products cannot be adopted for confirmation of differential CVD, if the CVD has already been paid on the declared MRP at the time of import of goods. In such a situation, there would be no dispute. Merely because in the present case, detailed and elaborated manufacturing process has not been undertaken by the importer, but keeping in view that the law itself, in terms of the provisions of Rule 2 (f) (iii), makes the said simple process of change in MRP as a manufacturing activity, the resultant product has to be held as a manufactured product and hence excisable. In Such a scenario, we agree with the Ld. Advocate that it is the duty of excise which was required to be considered by the lower authorities and no differential duty of CVD can be confirmed against them. Our view that affixing of stickers of new MRP amounts to manufacture in terms of the provisions of Section 2 (f) (i....
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.... appellants therein have been held liable to pay excise duty. Reference can also be made to the Tribunal decision in the case of Acme Ceramics (supra), wherein while dealing with the issue of alteration of RSP, the Tribunal observed that the person who has altered the RSP on the goods is the person who can be held as manufacturer on alteration of RSP; as the definition of manufacture in Section 2 (f) of the Act specifically talks about the process of declaration or alteration of RSP on the product which are covered under the provisions of Section 4A of the Act would be considered as manufactured product. The identical issue is involved in the present case also. We find no reasons to take a different view than the one taken in the above decision laying down that affixing of new MRP stickers amounting to manufacturing activity and attract duty of excise. 13. It is well settled law that the duties confirmed if not found to be sustainable cannot be substituted with the other kind of duties which the appellant may be required to pay, if there is no proposal in the notice to that extent and the adjudication has not dealt with the said aspect. In such a scenario, we hold that the counter....
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.... the Customs Tariff Act 1975. The law in this regard reads as under Provided that in case of an article imported into India, - (a) in relation to which it is required, under the provisions of the [Legal Metrology Act, 2009 (1 of 2010)] or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such article; and (b) where the like article produced or manufactured in India, or in case where such like article is not so produced or manufactured, then, the class or description of articles to which the imported article belongs, is the goods specified by notification in the Official Gazette under sub-section (1) of section 4A of the Central Excise Act, 1944 (1 of 1944), the value of the imported article shall be deemed to be the retail sale price declared on the imported article less such amount of abatement, if any, from such retail sale price as the Central Government may, by notification in the Official Gazette, allow in respect of such article under sub-section (2) of section 4A of that Act; or Explanation. - Where on any imported article more than one retail sale price is declared, the maximum of suc....
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....ing in the impugned order at para 12 is relied for the purpose "12. The invoices raised by M/s Mitashi Edutainment Pvt. Ltd. from April, 2005 to October, 2005 were scrutinized and the extract there of was submitted by them vide leter dated 16.3.2006. The scrutiny indicated that the following sale by them were at the rate higher than the decalred RSP in the Bill of Entry during the period April, 2005 to October, 2005. i)DVD Boom box MX6600 -- 50 pcs to M/s JP Electronics @Rs.3511/- -- 200 pcs to M/s Sony-Mony @ Rs. 3511/- -- 20 pcs to M/s Vijay Sales @ 3547/- -- 4 pcs to M/s Mario World @ Rs. 3991/- --- 36 pcs to M/s Navin Mkt. @ Rs. 3356/- As against declared RSP of Rs. 2290 in B/E no 5741121 1.06.05 & Rs. 23501- in B/E No. 602121 dt. 22.10.05. ii) VCD player 2000 -- 221 pcs to M/s Vijay Sales @ Rs. 1556/-. - 60 pcs to M/s Navin Mkt @ Rs. 1490 & Rs. 1433/- -- 13 pcs to M/s Ashar Mkt @ Rs. 1769/- As against declared RSP of Rs. 1190 in B/Es no 565894/5.05.05, 598734/25.08.05 & B/E No. 609462 dt 30.09.05. iii) VCD Player 3000 -- 75 pcs to M/s Sony Mony @ Rs. 1769/- -- 221 pcs to M/s Vijay Sales @ Rs. 155....
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....se Duty and not of changing the Assessable Value for the purpose of CVD under the Customs Tariff Act 1975. It is apparent from the facts of the case that it is not a case of change of RSP after import but it is a case of misdeclaration of RSP prevalent at the time of import. At the time of import the importer was affixing much higher RSP on domestic sale of the similar goods imported earlier. It was obligatory on the part of importer to declare the prevailing RSP of the goods at the time of import. In any case the action under customs act can be initiated on account of this mis-declaration. Action under customs for misdelcaration of RSP is independent of any other action sanctioned by any other law. 17.6 From the facts of the case it is apparent that in terms of the Standards of Weights and Measures Act, 1976 (60 of 1976) or the rules made thereunder the appellants were required to declare the correct RSP of the goods on the packages. The appellants, knowingly and with intention to defraud, affixed a lower RSP before Customs (An RSP lower than their whole sale price in some cases) and after clearance from Customs affixed the correct RSP for sale in the retail market. It is a clear....