TaxTMI 
TaxTMI 
2020 (6) TMI 146
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....untervailing duty (CVD) which was leviable on the basis of Maximum Retail Price (MRP) / Retail Sales Price (RSP) as per the provisions of Section 4A of the Central Excise Act, 1944 which is applicable to the imported goods also for the purpose of levy of countervailing duty (CVD). After investigations a Show cause notice No. 14/2017-18 DRI/BZU dated 08.09.2017 had been issued to the appellants wherein it has been alleged that the software tools imported by the appellants during the period from September, 2012 to March, 2017 are liable for reassessment on the basis of MRP /RSP for the purpose of levy and assessment of the Additional Duty of Customs (CVD). 3. It has also been alleged in the above mentioned show cause notice that the Maximum Retail Price (MRP) / Retail Sales Price (RSP) declared by the importer appellant for the goods imported during the period September, 2012 to March, 2017 has also been mis-declared and thereby needed to be re-determined as per the provisions of Notification No. 49/2008 dated 24 December, 2008 (S.No. 93 A) as amended. The SCN has also demanded short paid Additional Duty of Customs (CVD) amounting to Rs. 1,43,19,109/- as per the provisions of sect....
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....on the basis of MRP price and thereafter they submitted paying the Additional Customs Duty (CVD) on the transactional value of the softwares as they bonafidely believed that supply of customised software to various Institutional buyers is exempted from mention of Maximum Retail Price (MRP) / Retail Sales Price (RSP) as per the provisions of Legal Metrology [ Packaged Commodities] Rules. The learned advocate has vehemently contested that the adjudicated authority greatly erred in confirming the Customs duty against them and further added that; (i) that the provisions of Se4ction 4A of the Central Excise Act relating to Valuation of goods on MRP/RSP are not applicable to the Software imported by the Appellants. Provisions of Section 4A is applicable only to those goods in relation to which it is required under the Legal Metrology Act or rules made thereunder to declare the retail sale price on the package and such goods have been specified by the Notification issued under Section 4A of the Central Excise Act. (ii) The MRP based assessment in respect of items falling under Heading 8523 was brought into force vide notification No. 49/2008-CE and the abatement allowed ....
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....kesh Chandra Naithani, Chief Executive Officer of the Appellant Company has stated in his statement dated 25.04.2017 [para 4.6 of the SCN] that their Sales Executives meet the customers and understand their requirements and Application Engineers would demonstrate the technical capability of the product. Quotation is provided to the customers by them based on the requirements of the customers. It is evident from this statement also that the software was not intended for sale off the shelf. (vii) It is submitted that the appellant were supplying the software to various colleges, research Institution, Defence establishments for their own specific use. The appellants had a bona fide belief on the basis of provisions of Rule 3(b) of the Legal Metrology [Packaged Commodities] Rules, 2011 that the provisions of Retail Sale were not applicable to them. Rule 3 of the Legal Metrology [Packaged Commodities] Rules, read as under: Rule 3. Applicability of the Chapter - The provisions of this Chapter shall not apply to - (a) Packages of commodities containing quantity of more than 25 Kgs or 25 Litre excluding cement and fertilizers sold in bags up to 50Kg; and ....
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....ts have declared MRP correctly on the Software Packages imported by them and supplied to various Institutional / Industrial Consumers. The appellants vehemently contest the findings that the MRP declared was very low compared to the Sale Invoice Value. It has been wrongly concluded that Sukesh Chandra Nainthani, CEO and Kapil Dev Sharma, Manager of Appellants have admitted the misdeclaration of MRP /RSP of packaged software tools,. It was emphatically submitted that they had merely stated in their respective statements that there is difference between MRP declared and the Invoice price. They have given the valid reasons for the same. Kapil Dev Sharma has stated in his statement dated 05.06.2017 that MRP declared was based on purchase order /Sale Invoices (including Tax) value minus indirect expenses such as travelling expenses of skilled man, training, installation and on-site support for warranty period. These expenditures may range from 0% to 45% of the purchase order /sales invoice value. In the price list of the appellants, there is a note to the effect that Training and after sales support @ 45% is inclusive in the prices. 7. It has further been submitted by the appellan....
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.... September, 2012 to March, 2017 are liable for assessment for payment of Additional duty of Customs (CVD) on the basis of Maximum Retail Price (MRP) / Retail Sales Price (RSP) or on the CIF value declared by the appellants. 11. We find from the record of the appeal that the appellant manufacturer had been declaring in almost all the Bills of Entry that the software imported by them were for use for 'Industrial use' or for 'educational use' or institutional use'. Before proceeding further in the matter, it will be appropriate to have a look in the relevant notification No. 30/2010 CE (NT) dated 21 December, 2010 as amended from time to time which is reproduced hereinbelow:- Notification No. 30/2010-CE(NT) dated 21.12.2010 inter alia states that - In exercise of the powers conferred by sub-sections (1) and (2) of section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 49/2008-Central Excise (N.T.), dated the 24th December, 2008, p....
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....onsumers or institutional consumers. Explanation:- For the purpose of this rule- (i) "Institutional consumer" means the institutional consumer like transportation, Airways, Railways, Hotels, Hospitals or any other service institution who buy packaged commodities directly from the manufacturer for use by that institution; (ii) "Industrial consumer" means the industrial consumer who buy packaged commodities directly from the manufacturer for use by that industry. 9.10 Legal Metrology (Packaged Commodities) (Amendment) Rules, 2015. The Notification dated 14th May, 2015 issued by the Food and Public Distributions, Department of Consumer Affairs, Ministry of Consumer Affairs, New Delhi, contained the Legal Metrology [Packaged Commodities)(Amendment ) Rules, 2015 by which the Central Government amended the Legal Metrology [Packaged Commodities) Rules, 2011 which are as under 1. In the Legal Metrology [Packaged Commodities) Rules, 2011(hereinafter referred to as the said rules), in rule 2- (i) For clauses (bb) and (bc), the following clauses shall be substituted, namely:- (bb) 'industrial consumer' means the consumer ....
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....f packaged software and therefore, same cannot be put to the assessment on the basis of MRP price. Further, we also find that the appellant importer has also been supplying same softwares to various educational institution such as engineering colleges, universities etc. Primarily, we are of the opinion that educational software meant for engineering colleges etc. may be of a general nature. All the software meant for educational purposes and can be used by a variety of educational institutions and such software can be available for sale off the shelf, however we find from the record of the appeal that no such specifications/ details are available. We find that details of specifications and uses of each software need to ascertain specifically to determine its nature whether it can be categorised as to its general and varied use and can be sold off the shelf. 15. From the detailed perusal of the impugned order in original, we find that the order-in-original has failed to analyse the nature of individual software imported by the appellant importer and has not determined individual as to how every consignment of a particular software can be considered as a packaged software. We are ....