TaxTMI 
TaxTMI 
TaxTMI 
2023 (12) TMI 1469
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....imported 'Hydraulic Rock Breakers' through Jawaharlal Nehru Customs House (JNCH) and for this purpose have filed Bill of Entry (B/E) No. 4960970 dated 20.03.2014, classifying it under Customs Tariff Item 8431 4930 and self-assessed the customs duty payable thereon by availing preferential trade agreement concession under Notification No.152/2009-Customs dated 31.12.2009for imports from Korea and by paying the additional duty of customs (CVD) on the basis of Retail Sale Price (RSP/MRP). The said B/E was assessed by the proper officer of customs on second check basis; upon examination of the cargo by the customs officers, it was found that the appellants had declared the RSP and paid the applicable duty thereon, however there was no labels pasted, affixed or printed on the package, providing the mandatory declarations to be made under the provisions of Legal Metrology Act, 2009 and Legal Metrology (Packaged Commodities) Rules, 2011. Accordingly, the Department had initiated investigation proceedings and upon completion of the same have issued Show Cause Notice (SCN) dated 14.10.2015, demanding differential additional duty of customs in respect of the subject B/E, as well as such duty....
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....gal basis, and therefore on this ground alone, the adjudged demands are liable to be set aside. Learned Advocate also stated that interest under Section 28AA ibid and penalty under the Section 112 ibid are also not sustainable, as these are not applicable to additional duty of customs leviable under Section 3 of the Customs Tariff Act, 1975, in the absence of specific legal provisions enabling for application of such Section to CVD. 3.3 In support of their stand, the appellants had relied upon the following judicial pronouncements: (i) ABB Ltd., Vs. Commissioner of Customs, Bangalore - 2011 (272) E.L.T. 706 (Tri. - Bang.) (ii) Commissioner of Customs, New Delhi Vs. V.J. Traders - 2019 (366) E.L.T. 909 (Tri. - Del.) and upheld by the Hon'ble Supreme Court in 2019 (366) E.L.T. A188 (S.C.) (iii) Jayanthi Food Processing (P) Ltd. Vs. Commissioner of C, Ex., Rajasthan 2007 (215) E.L.T. 327 (S.C.) (iv) Mahindra & Mahindra Ltd. (Automotive Sector) Vs. Union of India - 2022-VIL-690-BOM-CU 4. On the other hand, learned Authorised Representative for Revenue reiterated the findings of the Principal Commissioner in the impugned order, and submitted tha....
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....centage of the value of the imported article; xxx xxx xxx xxx (2) For the purpose of calculating under sub-sections (1) and (3), the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962 (52 of 1962), be the aggregate of- (i) the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (ii) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include- (a) the duty referred to in sub-sections (1), (3), (5), (7) and (9); xxx xxx xxx 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 o....
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....be deemed to be the retail sale price declared on such goods less such amount of abatement, if any, from such retail sale price as the Central Government may allow by notification in the Official Gazette. (3) The Central Government may, for the purpose of allowing any abatement under sub-section (2), take into account the amount of duty of excise, sales tax and other taxes, if any, payable on such goods. (4) Where any goods specified under sub-section (1) are excisable goods and the manufacturer- (a) removes such goods from the place of manufacture, without declaring the retail sale price of such goods on the packages or declares a retail sale price which is not the retail sale price as required to be declared under the provisions of the Act, rules or other law as referred to in subsection (1); or (b) tampers with, obliterates or alters the retail sale price declared on the package of such goods after their removal from the place of manufacture, then, such goods shall be liable to confiscation and the retail sale price of such goods shall be ascertained in the prescribed manner and such price shall be deemed to be the retail sale price f....
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....t Legal Metrology (Packaged Commodities) Rules, 2011.] Rule 2A. Applicability of the Chapter- The provisions of this chapter shall not apply to,- (a) packages of commodities containing quantity of more than 25 kg or 25 litre excluding cement and fertilizer sold in bags up to 50 kg; and (b) packaged commodities meant for industrial consumers or institutional consumers. Explanation :- For the purpose of this rule,- 'a) Institutional consumer.- Means those consumers who buy packaged commodities directly from the manufacturers/packers for service industry like transportation [including airways, railways],hotel or any other similar service industry. b) Industrial Consumer - Means those consumers who buy packaged commodities directly from the manufacturers/packers for using the product in their industry for production, etc.'." Notification No.49/2008-C.E. (N.T.) dated 24.12.2008 MRP based valuation: "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, in supersession of the notification of the Government of ....
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....value, as determined under Section 14 of the Customs Act, 1962. In terms of the proviso to Section 3(2) ibid, the value of the imported goods shall be determined on the basis of RSP/MRP declared on the package thereof, if such imported goods fulfill both the following two legal requirements. These are, firstly (i) there shall be a requirement under the Legal Metrology Act, 2009 or the rules made thereunder, for declaration of RSP/MRP on the packages thereof; and secondly (ii) the excise duty on like article produced or manufactured in India, to that of the imported goods, are subjected to RSP/ MRP based levy under Section 4A of the Central Excise Act, 1944. 8.2 On careful perusal of the facts on record, and the entry appearing in Sl. No. 109 of Notification No.49/2008-C.E. (N.T.) dated 24.12.2008 as amended by Notification No.19/2010-C.E. (N.T.), dated 29.04.2010, it transpires that the imported goods falling under 'any chapter' of the First Schedule to the Central Excise Tariff, and covered by the description viz., "Parts, components and assemblies" of goods falling under tariff item 8426 41 00, headings 8427, 8429 and sub-heading 8430 10, are liable to be pay CVD/Central Excis....
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....id and thus not fulfilling the first legal requirement for levy of CVD on MRP/RSP basis. In view of the aforesaid legal position, we have no hesitation to conclude that the imported Hydraulic Rock Breaker in the present case does not fall under the scope of coverage of Legal Metrology (Packaged Commodities) Rules, 2011. Inasmuch as, the essential legal requirements of declaration of RSP/MRP on the packages thereof under the Legal Metrology Act, 2009 or the rules made thereunder, having not been fulfilled in the present case, the demand of additional duty of customs (CVD) in the impugned order, on the basis of MRP/RSP based to levy is not legally sustainable. 9. We also find that the appellants have stated that the imported Hydraulic Rock Braker is meant for sale to industrial and institutional consumers. They supply these goods to the owners of excavator machines who gives such machines on lease basis for construction industry or for excavation service industry; these are not meant for sale or supply to individual consumer. Thus, they contended that the imported goods will qualify for supply to institutional or industrial consumer. Therefore, they stated that the imported goods ....
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..... In the case of readymade garments sold to consumer in Pre-packaged form, declarations required under the Rules may be made. Further, the size of the garments needs to be mentioned in metres or centimetres, as the case may be, and any additional detail such as S, M, L, XL, XXL etc. may be treated as additional declaration. 4. This issues with the approval of the Competent Authority. The above circular issued by Line Ministry dealing with the Legal Metrology (Packaged Commodities) Rules have clearly spelt out mandatory declaration on the packages thereof, including RSP/MRP is applicable only to the goods sold to the consumer in pre-packed form and this will not apply for those goods sold in loose form. Thus, it follows that when the competent authority in the line Ministry dealing with the parent statue administered by them, have clarified the correct legal position, the same is required to be followed by the other governmental authorities, including Customs field formations, for the purpose of uniformity in implementation of the law. Therefore, we are of the opinion, that a different view cannot be taken which is contrary to the clarification, in the circular issued by....
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....the mandate of affixing 'maximum retail price'. 5. Learned Counsel for the respondent, while admitting that the demand of additional duties of customs were being effected under Section 4A of Central Excise Act, 1944, submits that the practice was given up from 9th July, 2009 after informing the Customs authorities. We also find from the decision of ABB Ltd. v. Commissioner of Customs, Bangalore [2011 (272) E.L.T. 706 (Tri.-Bang.)] that the fundamental issue is the correctness of application of the Rules framed under Section 4/4A of Central Excise Act, 1944 to an assessment of additional duties of customs under the Customs Tariff Act, 1975. It is seen from the provisions therein that, for the purpose of additional duties of customs, the default mechanism is 'SECTION 3. xxx (2) For the purpose of calculating under sub-sections (1) and (3), the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962 (52 of 1962), be the aggregate of- (i) the value of the imported article determined under sub-....
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....se of Jayanthi Food Processing (P) Ltd., (supra) have held that if the appellant is successful in showing that there is no requirement under the Standards of Weights and Measures Act or the Rules made thereunder for declaration of MRP on the package, then there is no question of application of Section 4A(1)&(2) of the Act for MRP/RSP based levy. The relevant paragraphs of the said judgement is extracted and given below: "12. We have already referred to the facts appearing in the orders of the authorities below which suggest that at one point of time the assessee used to display the MRP on the four litres pack voluntarily. Shri Subba Rao very heavily relied on this fact. We do not think that merely because the assessee displayed the MRP on the four litres pack, that would negate the case of the appellant altogether. We have already shown in the earlier part of the judgment the conditions required for application of Section 4A. The plain language of Section 4A(1) unambiguously declares that for its application there has to be the "requirement" under the SWM Act or the Rules made thereunder or any other law to declare the MRP on the package. If there is no such requirement un....
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....umer. In our view this can be squarely covered in the term "servicing any industry". The word "service" is a noun of the verb "to serve". This Court in Coal Mines Provident Fund Commissioner v. Ramesh Chander Jha [AIR 1990 SC 648] in a different context, observed as under : The word "service" in Section 2(17)(h) must necessarily mean something more than being merely subject to the orders of Government or control of the Government. To serve means 'to perform functions; do what is required for'." [Emphasis supplied] A hotel is a hospitality industry and undoubtedly supplies food and eatables to the consumers. Therefore, to supply the ice-cream to such a hotel would be doing what is required for the hotel. In that sense the supply by way of sale of ice-cream which is ultimately sold to the 'ultimate consumers' would, no doubt, be covered in the term "servicing the hotel industry". Even otherwise the word "service" as per Concise Oxford English Dictionary means : (i) perform routine maintenance or repair work on (a vehicle or machine); (ii) provide a service or services for; It is an act of helpful activity - help, aid or to do some....