TaxTMI 
TaxTMI 
2020 (6) TMI 146
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.... 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 section 28(4) of Customs Act, 1962. The provisions ....
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....ed 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 was 35%. Subsequently vide notification No. 30/2010-CE and corrigen....
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....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 (b) Packaged commodities meant for industrial consumers or institutional consumers. B.3 Rule 2(bb) and 3(bc) of Legal Metrology [Packaged Commoditie....
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....y 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 appellant that it is wrong on the part of the department to allege that the appellant importer have resorted to suppression or mis-declaration of the facts pertaining to the imported consignment. It has further been elabora....
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....s. 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, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 882(E), dated the 24th December, 2008, namely :- In the said notification, in the Table, after S. No. 93 and the entries re....
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....ndustrial 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 who buys packaged commodities directly from the manufacturer or from an importer or from wholesale dealer for use by that industry and the package shall have declaration 'not for retail sale'. (bc) "Institutional consumer" means the institution who hires or avails of the facilities or services in connection with transport, hotel, hospital or other organisation which buy packaged commodit....