TaxTMI 
TaxTMI 
2021 (10) TMI 341
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....5 4415416 / 20.08.2011 420 1394159.79 219198.90 2. The cement so imported was in 50 kgs packages with the MRP affixed on the packs as Rs. 190/-. The importer claimed Special Additional Duty (SAD) exemption under Sl. No. 1 of Notification No. 29/2010-Cus. dated 27.02.2010. The above Notification reads as under: "[Notification No. 29/2010-Cus., dated 27-2-2010] Spl. CVD - Exemption to specified goods In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of description specified in column (3) of the Table below, falling within the Chapter, heading, sub-heading or tariff item of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as are specified in the corresponding entry in column (2) of the said Table, when imported into India, from so much of the additional duty of customs leviable thereon under sub-section (5) of section 3 of the said Customs Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4....
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....different rates of CVD as exemption for the imported cement in terms of clauses 1A(i), 1A(ii), 1B and 1C, on fulfilment of conditions. The Notification reads as under: "In exercise of the powers conferred by sub-section (1) of Section 5A 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 exempts excisable goods of the description specified in Column (3) of the Table below read with the relevant List appended hereto, as the case may be, and falling within the Chapter heading or sub-heading or tariff item of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) (hereinafter referred to as the Central Excise Tariff Act), as are given in the corresponding entry in column (2) of the said Table, from so much of the duty of excise specified thereon under the First Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the specified in the corresponding entry in column (4) of the said Table and subject to the relevant conditions specified in the Annexure to this Notification, and the condition number of which is referred to in the corres....
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.... respective S. Nos. referred to above: Provided further that if the declared sale price on wholesale package and on the standard packages is different in terms of per tonne equivalent sale price, then, the per tonne equivalent sale price of the wholesale package or per tonne equivalent retail sale price of the standard packages, whichever is higher, shall be taken into consideration for determining the rate of duty : Provided also that where the retail sale price of the goods are not required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and thus not declared, the duty shall be determined as is in the case of goods cleared in other than packaged form." 8. The effective rate of CVD for Ordinary Portland Cement under the various clauses of the above exemption Notification, as amended and applicable to the disputed period, is captioned in paragraph 8 of the Show Cause Notice, which reads as under: S. No. to Notification 7.12.2008 to 26.02.2010 27.02.2010 to 28.02.2011 01.03.2011 to 04.04.2011 05.04.2011 to 16.03.2012 Amending Notification No. 58/2008-C.Ex. dated 07.12.2008 10/2008-C....
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....that he has not paid VAT on the cement imported and the RSP of the 50 kg bags of cement being more than Rs. 190/- (when all charges are added), the importer then has to pay concessional rate of Duty as per Sl. No. 1A(ii) of the Notification. Not being an Industrial or Institutional consumer, this concession is also not available. From the foregoing it appeared to the Department that:- (i) M/s. Universal Suppliers, Poovanvilai have imported Cement in 50 kg bags with MRP as Rs. 190/- declared on them. (ii) M/s. Universal Suppliers, Poovanvilai have suppressed and mis-declared the actual Retail Selling Price of the cement imported by them in order to evade payment of appropriate duty. (iii) The actual RSP is more than Rs. 190/- per 50 kg bag including the overheads, duty, sales tax, etc. and the purchase price of the cement bags. (iv) The concessional rate of duty under Sl. No. 1C of Notification No. 4/2006-CE has been availed by M/s. Universal Suppliers, Poovanvilai for some of their import of Ordinary Portland Cement for which they were not eligible to avail the exemption as per the notification in as much as they neither satisfy the conditi....
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....,50,000/- (Rupees Five lakh and fifty thousand only) under Section 125 of the Customs Act, 1962; v. I deny the exemption claimed by the importer under S. No.1 of Notification No. 29/2010-Cus. dated 29.02.2010. vi. I order payment of the differential duty of Rs. 1,37,51,558/- (Rupees One Crore Thirty Seven Lakhs Fifty One Thousand Five Hundred and Fifty Eight only) under Section 28 (4) of the Customs Act, 1962 and order to pay the interest under Section 28AA (1) at the applicable rate as provided under Section 28AA (2) of the Customs Act, 1962. vii. I order appropriation of an amount of Rs. 2,57,738/- and Rs. 2,50,000/- paid vide two demand drafts DD No. 282603 dated 24.08.2011 issued by M/s. Bank of Baroda, Tuticorin and DD No. 489382 dated 08.09.2011 issued by M/s. Vijaya Bank, Tuticorin towards the part payment of differential duty and order payment of the balance amount by the importer. viii. I impose a penalty equal to the duty sought to be evaded i.e., Rs. 1,37,51,558/- on the Importer viz., M/s. Universal Suppliers, Poovan Villai under Section 114A of the Customs Act, 1962. ix. I do not impose any penalty on the M/s. Universal Supp....
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....ncorrect. Thus the Show Cause Notice dated 25.09.2013 included demand of CVD of Rs. 1,37,51,558/- along with appropriate interest under Section 28(4) of the Customs Act, 1962. Learned Counsel for the appellant submitted that without any evidence to substantiate the allegation that the cement bags were sold by the appellant at a higher price than the RSP of Rs. 190/- per 50 kg bag, the Department has merely adopted the RSP of another manufacturer of cement viz. M/s. India Cements Ltd., to enhance the value and deny the concession rate, which is not permissible under law. 13.4 The appellant is engaged in the manufacturing activity of cement hollow blocks/bricks and consumed the imported goods by himself. Though the Department alleges that the appellant has sold the imported cement to other persons, they have not been able to establish as to whom it was sold or how much quantity was sold by the appellant. 13.5 Most of the earlier imports were made prior to 08.04.2011 when there was no self-assessment and the imports were then cleared by the Officers only after verification of RSP declared on the bags and consequential assessment. That the subsequent demand of differential duty u....
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....aw. 13.9.1 Further, according to appellant, their Customs Broker was filing the Bills-of-Entry as per the directions issued by the Assessing Officers. The earlier Bills-of-Entry were filed under Sl. No. 1C (35 Bills-of-Entry) as per such directions and later, on instructions, modified and claimed benefit under Sl. No. 1A(i) (48 Bills-of-Entry) and subsequently, in some Bills, claimed the benefit under Sl. No. 1A(ii) (19 Bills-of-Entry), which is evident from paragraph 4 of the statement of facts in the appeal memorandum. It is submitted by the Learned Counsel for the appellant that the benefit of the various clauses in the Notification No. 04/2006-C.E. was availed on the basis of the directions issued by the Assessing Officers. 13.9.2 He submitted that the last five Bills-of-Entry filed on 20.08.2011, were filed seeking assessment under Sl. No. 1A(ii) of Notification No. 04/2006-C.E. at the rate of 10% Adv plus Rs. 160/- per tonne and also availing the benefit of exemption from SAD in terms of Notification No. 29/2010-Cus. On all the packaged goods it was marked that they were intended for retail sale and the RSP was also declared. That this was in compliance with the Standar....
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....ain. He asserted that there are no grounds for invoking extended period. 13.11 He submitted that on a similar set of facts, the Tribunal in the case of M/s. Antony Metals v. C.C., Tuticorin in Customs Appeal No. 42210 of 2014 and ors. [Final Order Nos. 40323 to 40332 of 2019 dated 19.02.2019 - CESTAT, Chennai] had set aside the demand, redemption fine and penalties imposed. 14.1 Learned Authorized Representative Shri S. Balakumar, appearing on behalf of the Department, supported the findings in the impugned order. He submitted that the appellants have claimed exemption of SAD as per Notification No. 29/2010-Cus. dated 27.02.2010. That this exemption is only available for "pre-packaged goods intended for retail sale in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) 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." It is clear from the above Notification that it is not sufficient to only declare the RSP on the pre-packaged goods, but it should also be sold in the retail market by discharging VAT; in the ....
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....and not in bulk and therefore, is not eligible for concessional rate of duty under clause 1C of Notification No. 04/2006-C.E., as amended. 14.3.1 It is submitted by the Learned Authorized Representative for the Department that the appellant has declared the RSP of the goods as Rs. 190/- per 50 kg bag; the meaning of RSP is explained in the Notification, which says that Retail Sale Price means the maximum price at which the excisable goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight transport charges, commission payable to the dealers and all charges towards advertisement, delivery, packing, forwarding and the like, as the case may be and the price so printed is the sole consideration for the sale. That Shri J.S. Sundar Singh, Proprietor of the appellant, has deposed on 23.08.2011 that the Retail Sale Price of cement in the past 2-3 years in the local market was Rs. 230/- to Rs. 235/- and that at the time of the investigation it was Rs. 250/-; It is proved and established by the Department that the RSP of cement at that time was higher than Rs. 190/- per 50 kg bag. That it is clear from this that the RSP at which the a....
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....ed order does not call for any interference. 15. Heard both sides. 16. As per Section 3 of the Customs Tariff Act, 1975, Additional Duty equal to Excise Duty (CVD) and Special Additional Duty (SAD) are levied. Any article which is imported into India shall be liable to duty equal to the Excise Duty leviable on a like article if produced or manufactured in India, being CVD. Similarly, as per sub-section (5) to Section 3 of the Customs Tariff Act, Additional Duty of Customs (SAD) is levied to counter-balance the sales tax, value added tax, etc., when the goods are imported into India. The appellants have claimed concessional rate of duty (CVD/SAD) vide the above stated Notifications. 17. The genesis of the litigation which resulted in the issuance of the Show Cause Notice dated 25.09.2013 is when the appellant filed the five Bills-of-Entry dated 20.08.2011 for the import of cement claiming exemption of SAD vide Sl. No. 1 of Notification No. 29/2010-Cus. dated 27.02.2010. The said Notification has already been reproduced above. The allegation of the Department for denying the exemption of SAD is that the appellant, although has declared the RSP on the packages, has imported t....
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....h the RSP is affixed as Rs. 190 per 50 kg bag on the imported goods, the appellants have sold the cement at a higher price. In paragraph 13 of the impugned order, it is stated that the expenses incurred by the importer in the nature of transportation, liner charges, handling charges, etc., when included in the assessable value, the cement will have to be sold at a higher rate than Rs. 190/-. 21. The Adjudicating Authority has misinterpreted the meaning of Retail Sale Price (RSP), as given in the Notification. When RSP is declared on a package, the said amount includes all the charges. So also, a number of standard packages with RSP can be cleared as wholesale package. Such retail price declared on goods takes in all other charges. The Department cannot do a guesswork of various charges and assume that the cement has been sold at a price higher than Rs. 190/-. There is no evidence in the nature of reliable statement of any buyer or invoices to establish that appellants sold the cement at higher price. 22. It is stated in paragraph 13 of the impugned order that the Proprietor of the appellant deposed that the Retail Sale Price of cement in the local market is Rs. 230/- to Rs. 2....
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....hivya Hollow Blocks, Marthandam. He also deposed that he had no invoices for such sale. 25. After intervention of the import vide the five Bills-of-Entry dated 20.08.2011, the Show Cause Notice dated 25.09.2013 attempts to take in all the earlier imports of cement made by the appellant for the earlier period from 03.07.2009 onwards, thus invoking the extended period. It is pertinent to note that majority of the earlier imports were prior to 08.04.2011, when there was no self-assessment. Unless there is evidence to prove that the appellant has sold the cement at the higher rate, the Department cannot allege suppression of facts to invoke the extended period of limitation. 26.1 When RSP is declared on a pre-packaged commodity, the said price is the transaction value, unless there is evidence to show that it is not so. There must be some evidence to show that foreign supplier has received a higher amount. In the present case, the RSP declared is rejected stating that it is sold at a higher rate. In the absence of invoices to show that it was sold by the appellant at higher rate, the Department has proceeded to enhance the value on the basis of invoices of M/s. India Cements Ltd.....
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....ments of importers and some sale invoices. However, no evidence to connect the sale invoices with the impugned imports have been unearthed by the Department. In these circumstances, we hold that the proceedings in all these cases will certainly be hit by limitation. Further, we find that the very same issue has already been addressed by the Tribunal in the case of M/s. Diamond Cement Vs. Commissioner of Central Excise, Bhopal - 2017 (352) E.L.T. 177 (Tri. - Del.) on the matter of eligibility to concessional rate under serial number 1C of Notification No. 04/2007-CE. The relevant portion of the judgement is reproduced as under : "2. The brief facts of the case are that the assessee-appellants are manufacturer of the cement. They are selling the cement to the agencies on MRP basis, but in some cases selling directly to the consumers which includes the Government agencies, builders, institutions and individuals. When the goods are sold directly to the above-mentioned entities, then the assessee-appellants claimed that the MRP based exemption should be provided and they are entitled to avail the concessional rate of duty. 3. In the impugned order, the concessional rat....
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....pellants who had claimed identical CVD concession in terms of serial number 1C of Notification No. 04/2006-CE dated 01.03.2006 as amended, held as under : "6. On the first issue we have perused the sample invoice and import documents. It is clear that Bills of Entry filed along with invoices contain details of goods imported. The exporters details with evidences linking up with high sea sale invoices further linked up with Bill of Entry. Hence, the import from the designated exporter who is declared as manufacturer of cement based on the details in the invoices cannot be disputed. No contrary evidence that purchase is from a trader has also been submitted by the Revenue. 7. Regarding the second issue of actual user condition for the imported cement, we note that the appellants all along claimed fulfilment of such condition. Though same is post-importation, actual use based condition, the assessments were finalized accepting the claim of the appellant for such concessional duty. It would appear that officers had opportunity to satisfy themselves about the actual user condition. In case of possible doubt on such fulfilment, the requirement is to resort to provisiona....