TaxTMI 
TaxTMI 
2025 (10) TMI 498
X X X X Extracts X X X X
X X X X Extracts X X X X
....e permitted to be redeemed on payment of fine of Rs. 1,06,00,81,080 under section 125 of Customs Act, 1962, is the empowerment vested in officers of customs, under section 17 of Customs Act, 1962, to re-determine value, as set out in section 3(2) of Customs Tariff Act, 1975, for levy of additional duty under section 3(1) of Customs Tariff Act, 1975. The other appellants, Shri Prakash B Shet and Shri RN Mukhija, assail the penalties imposed on them for alleged role in import of goods liable to confiscation. The proceedings pertained to import of 'switchgear parts' effected between April 2003 and March 2008 and impugned in seven show cause notices disposed off by single order [order-in-original no. 29-35/SK/M-1/2013 dated 14th October 2013] of Commissioner of Customs (Adjudication), Mumbai. 2. As several decisions of the Tribunal have decided on the competence of customs authorities to take recourse to section 28 of Customs Act, 1962 in the absence of machinery provision for revision of declared 'retail sale price (RSP)' at stage of assessment and upon legislative design of the levy of 'additional duty of customs' being completed in all respects upon clearance of goods for home co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e records if investigation was able to ascertain that these prices had been marked on the packages as mandated by Standards of Weights & Measures (Packaged Commodity) Rules, 1976 or was merely presumed to be so. Even so, it was also necessary to ascertain the mandate of law to do so on. 7. The requirement for conformity with 'retail sale price (RSP)' valuation for levy of additional duty of customs is the mandate of Standards of Weights & Measures (Packaged Commodity) Rules, 1976 and not mere lack of agency with the dealer/stockist to determine price. It was held by the Hon'ble Supreme Court, in Commissioner of Central Excise & Service Tax, Kanpur v. AR Polymers Pvt Ltd [2023-TIOL-21-SC-CX], that '8. In the present case at hand, the respondent entered into a sale with the paramilitary and military as per the terms of agreement signed. While the goods in the impugned sale were notified under Section 4(A) of the Act by way of an official notification in the gazette, what is most relevant to us is Rule 3(b) of the Legal Metrology (Packaged Commodities) Rules, 2011 which exempts the sale to institutional consumers from its purview. 9. The purchasers in this case ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rchaser institutions, as discussed above are intermediaries, who after the purchase of the said goods, distribute it further to the final consumer. 16. In such a circumstance, where the purchaser institution is deemed to not be a consumer, the sale also cannot be held to be a retail sale as per the Act. Further, since the impugned sale is not a retail sale as per the Act, there exists no mandate of law on the Respondent herein to affix an MRP on the goods sold, and hence the said impugned transaction cannot claim benefit under Section 4(A) of the Act. 17. Again, at the sake of repetition, we find it important to clarify that the mere affixation of MRP does not make goods eligible to find refuge under Section 4(A) of the Act, and what is required along with such affixation is a mandate of law that directs the seller to affix such MRP. ....' 8. The peculiar construct of the proceedings is not that the allegation of short-payment of duties is assailed with claim that, additional duty of customs is not chargeable under section 3(1) of Customs Tariff Act, 1975. It is not the construct of the grounds for recovery that the imported goods did not bear 'retail sale pric....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion, as the case may be; and 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-- (ii) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962 (52 of 1962)..... 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-- (i) the goods specified by notification in the Official Gazette under subsection (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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....per officer' for recovery of duties, not paid or short-paid, under Central Excise Act, 1944, vesting also in 'proper officer' of section 28 of Customs Act, 1962. In context, we note that Central Excise Valuation (Determination of Retail Sale Price of Excisable Goods) Rules, 2008, notified [notification no. 13/2008-CE (NT) dated 1st March 2008] under the authority of enablement incorporated [Finance Act, 2003 (Act 32 of 2003), section 137 with effect from 14th May 2003] in section 4A of Central Excise Act, 1944, and the lack of machinery provision between 14th May 2003 and 1st March 2008, let alone for any prior period, was considered by a Larger Bench of the Tribunal in re Ocean Ceramics Ltd [2024 (1) TMI 1280 - CESTAT AHMEDABAD] to bar recovery thus '90. The reference made by the Division Bench to the Larger Bench of the Tribunal is, accordingly, answered in the following manner: (i)...It is not permissible to ascertain the retail sale price of goods removed from the place of manufacture, without declaring the retail sale price of such goods on the packages or declaring a retail sale price which is not the retail sale price or tampering with, obliterating or alte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....signing the Convention of the Metre by adoption of the metric system for uniformity after re-organization of the states of the Union and which, though intended for standardizing units of mass and measure initially that was also extended to physics, was broadened by substituting enactment [Standards of Weights and Measures Act, 1976] providing for 'packaged commodities' to be regulated through detailing of particulars thereon. The rules framed thereunder as well as the later enacted Legal Metrology Act, 2009, viz., Standards of Weights and Measures (Packaged Commodity) Rules, 1977 and Legal Metrology Rules, 2011, provided for obligations to provide specified details on 'pre-packaged commodities' as measure of consumer welfare to be enforced by or eponymous agency empowered for ensuring compliance by physical inspection till final sale. This assurance of integrity of declaration on packages, among which is 'retail sale price (RSP)' as ceiling, by intervention-driven deterrence breach combined with statutory chargeability to central excise duties upon any subsequent alteration - 'deemed to be manufacture' - persuaded legislative sanction for assessment by resort to 'retail sale price ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... compliance until after clearance and any discrepancy thereafter to be cause for charging duties of central excise as deemed manufacture, there is no scope for revisit of assessment effected at the time of clearance of imported goods. 12. Moreover, in the absence of provisioning for surrogate value akin to Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, the lack of machinery provision for re-assessment before clearance for home consumption handicaps equally any attempt to do so under section 28 of Customs Act, 1962 after clearance. This is the ratio of the decision, in re Ocean Ceramics Ltd, of a Larger Bench of the Tribunal supra. Recourse cannot be had to any of the specific options in Central Excise (Determination of Retail Selling Price of Excisable Goods) Rules, 2008 which, having been framed under Central Excise Act, 1944, is not exercisable by officers of customs, let alone rule 6 therein offered as justification by adjudicating authority 13. Emerging from this backdrop of law, set out in section 3(1) of Customs Tariff Act, 1975 read with section 3(2) therein, is the proposition that declared value, whether of 'retail sale price (RSP)' or 'tra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een evidenced that the impugned goods did pass through channel that conforms to 'retail sale' set out in rule 2(l) of the said Rules. Neither can it be discountenanced that the impugned goods were not supplied to customers of original equipment supplied by them and, hence, within the ambit of exclusion extended to 'industrial consumer' exempted from stipulatory marking under rule 3 of Legal Metrology (Packaged Commodities) Rules, 2011. 16. Consumers of the appellant are either rendering service or are manufacturers. It is not in dispute that the customers of the appellant would be using the impugned goods for incorporation in 'forklift trucks' or 'material handling equipment' which are used either in factory of production or for servicing of customers. They cannot, therefore, not be excluded from the category of institutional customers or industrial customers as set out in rule 3 of Legal Metrology (Packaged Commodities) Rules, 2011. It was for the customs authorities to demonstrate that the buyers for whom the intended goods were procured are not institutional consumers or industrial consumers. The adjudicating authority has not adjudged so but rejected the claim as the impugne....