TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 210
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.... statements of several persons including directors, employees, ex-employees, etc. were recorded during the investigation in this regard. The said investigation culminated into two show cause notices, viz. Show Cause Notice No. 39/2019 dated 13.09.2019 in respect of goods which were seized during the search and Show Cause Notice No. 04/2020 dated 03.02.2020 in respect of goods which had been imported in past and already sold in the domestic market. The allegation in the SCNs are to the effect that the appellant has short paid the CVD, since the MRP [RSP] found during the search operations was higher than the RSP declared at the time of imports. Vide Order-in-Original No. KOL/CUS/A&A/Pr.COMMISSIONER/ADJN/12/2024 dated 14.03.2024, the Adjudicating authority has confirmed the demand of Rs. Rs.2,92,54,340 u/s 28(4) / of the Customs Act 1962 along with interest and penalty. He confiscated the goods giving an option to redeem the same on payment of Redemption Fine of Rs.3,50,00,000 u/s 125 of the Act. He also imposed penalty of Rs.3,00,000 u/s 112(a)(ii) and Rs.4,00,000 u/s 114AA on the Director. Being aggrieved, the appellants have filed the present appeal before the Tribunal. 2. The ....
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....the meaning of 2(f)(iii) of the Central Excise Act. Hence, once an activity is deemed "manufacture" under Central Excise law, the resultant duty liability, if any, can only be under the Central Excise Act, 1944 and not under the Customs Law. Accordingly, the jurisdiction to demand duty on the activity of re-labelling, if at all, lies exclusively with the Central Excise authorities. Customs officers, being appointed under the Customs Act, 1962, cannot assume the powers of Central Excise officers to raise a demand on an activity which the statute itself classifies as "manufacture" under the Excise law. Therefore, the impugned demand of differential CVD by the Customs authorities is beyond their jurisdiction, unsustainable in law, and liable to be quashed. Reliance in this regard is placed on the following judgements: i. M/s Mitashi Edutainment (P) Ltd. Vs. Commr. ofCus. (Import), Mumbai-II, CC, JNCH, Nhavasheva [2018 (12) TMI 390 - CESTAT MUMBAI] (Para 14 to 16 - Pg.92/C) ii. L'oreal India Pvt. Ltd. Vs. Commr. of C.Ex., Raigad/ Thane [2014 (308) E.L.T. 746 (Tri. - Mumbai)] (Paras 8.3 and 8.5 - Pg. 96/C) iii. Titan Industries Ltd. Vs. Commissioner of Central....
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....rer details are mentioned. The Appellant submits that any dealer or trader can list goods on such ecommerce platform and the Department has failed to establish that the goods supplied to such e-commerce platforms were by the Appellant. Moreover, the screenshots pertain solely to 2019, whereas the sales in question occurred much earlier. Given the natural variations in pricing over time and the absence of any objective benchmark, these screenshots cannot serve as a reliable basis to determine the MRPs applicable at the relevant period. 2.6 The Department has further relied on the statements of employees, ex-employees, Customs House Agents (CHA) and printers to build their case. However, the Appellant submits that a bare perusal of such statements shows that they are riddled with uncertainty, couched in vague terms, and in several instances, the deponents themselves have admitted to lack of knowledge. Their repetitive and formulaic nature also casts serious doubt on their reliability. In the absence of corroborative evidence, such statements cannot form the sole basis of demand. Hence, the entire demand being raised solely on assumption and presumption without any corroborative ev....
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....aside on this ground alone. 2.10 The impugned order alleging misdeclaration is primarily based on the printouts of emails and what s app chats. The Appellant submits that such print puts has no evidentiary value on its own and can be admitted as evidence only when it strictly fulfils the conditions specified in Section 138C of the Act. 2.11 Section 138C of the Act states that the statement contained in a computer printout shall be deemed to be a document for the purposes of the Act and the rules made thereunder and shall be admissible as evidence of the contents of its original, if the conditions mentioned in sub-section (2) and other provisions of the Section are satisfied in relation to the statement and the computer in question. The very admissibility of such a document, i.e., electronic record, depends on the satisfaction of the four conditions under Section 138C (2). Further, Section 138C (4) of the Act mandates that any computer printout sought to be relied upon as evidence must be accompanied by a certificate issued by a person occupying a responsible official position in relation to the operation of the relevant computer system. This certificate must attest to the aut....
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.... of the Customs Act. 2.15 However, in the instant case, the Ld. Adjudicating Authority has sought to circumvent the settled assessment by demanding CVD under Section 28 of the said Act. The Appellant submits that such an attempt is clearly impermissible in law and amounts to an indirect challenge to the finality of the original import assessments, which cannot be sustained in the eyes of law. Hence, the impugned Order is liable to be set aside. Reliance in this regard is placed on the following judgements: i. ITC Limited Vs. Commissioner of Central Excise, Kolkata -IV [2019 (9) TMI 802 - Supreme Court (LB)] ii. ShriRajibSaha Vs. Commr. Of Cus. (Preventive), Shillong [2023 (8) TMI 1162 -CESTAT KOLKATA] (Paras 9 to 12 - Pg.218B) 2.16 The Entire proceedings are barred by limitation in as much as extended period of limitation alleging suppression cannot be invoked in subsequent show cause notice when on the self-same set of facts and materials, a show cause notice has been issued earlier and the facts of the case were within the knowledge of the Department. 2.17 The Appellant submits that the facts of the case were already within the knowledge of the Departme....
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....ry provisions and case laws cited before us. 6. The appellant company has taken the stand that in the absence of machinery provision under Customs Law, CVD cannot be demanded in isolation when the imports have been finally assessed. 7. Admittedly, the imported goods in question are subjected to valuation under Section 4 A of the CEA 1944, which requires the Excise Duty to be paid based on the RSP declared less the abatement granted vide the specific notification. The goods are also placed under Third Schedule of the Central Excise Act 1944, because of which packing, repacking, labelling and relabelling would amount to manufacture in terms of Section 2(f) of the CEA 1944. 8. As to whether the CVD under Section 3 (2) of Customs Tariff Act can be demanded, when the CVD is payable in terms of Section 4 A arose in the case of Mitashi Edutainment Pvt Ltd Vs CC (Imports) - 2018 (12) TMI 390 - CESTAT Mumbai. The Bench [Comprising of the Two Members and One Member given the task of taking up the Difference of Opinion] held as under : 11. I have given careful consideration to the facts on record, submissions made by both side, both oral and Written and I have also carefully....
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....e retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price or the purposes of this section.] [Provided further that in the case of an article imported into India,where the Central Government has fixed a tariff value or the like article produced or manufactured in India under sub-section 2 of section 3 of the Central Excise Act, 1944 (1 of 1944), the value of the imported article shall be deemed to be such tariff value.] Explanation. - Where on any imported article more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price for the purposes of this section. 12. It may be observed from the above, that the requirement of payment of CVD on the basis of MRP would arise, if the two conditions are satisfied, viz, (i) There shall be a requirement under Standards of Weights and Measures Act / Rules (later renamed as Legal Metrology Act) to declare RSP (Retail Sale Price) on such goods; and (ii) Such goods must be included under Third schedule to the Central Excise Act and attract duty of excise under Section 4 A of the CE Act. It may be noted ....
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....supra that in such cases wherever subsequent manufacturing activities (deemed manufacturing activities) are carried out, there is even no need to pay CVD on the basis of MRP. 9. The Mumbai Bench of the Tribunal in the case of DS Chandok & Sons Vs CC (Export Promotion] - 2021 (9) TMI 417 - CESTAT Mumbai, has held as under: 6. The assessment of duties of central excise on the basis of 'retail selling price' was intended to dovetail enforcement of the levy with the statutory oversight contemplated by the Standards of Weights and Measures Act, 1976 and Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (and the substituting Legal Metrology Act, 2009 and Legal Metrology (Packaged Commodities) Rules, 2011) and its adoption, for parity, in assessment of 'additional duties of customs' was ineluctable. The declaration of value on the packaging was considered to be sacrosanct enough for the two purposes at the initial stage. Though Central Excise Act, 1944 did empower re-valuation with effect from 1st March 2008 in the specifically enumerated circumstances, there has been no corresponding empowerment under either Customs Act, 1962 or Customs Tariff Act, 1975. Th....
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....of CVD. This proviso to subsection (2) of Section 3 does not use the words that 'the entire provision of Section 4A would be applicable'. 21. Though Section 4A was introduced w.e.f. 14.5.1977, there was no provision for ascertaining (or redetermining) the price (RSP) in situation of violation of the provisions. Subsection (4) to Section 4A for ascertaining or redetermining the RSP came to be introduced only w.e.f. 14.5.2003. Subsection (4) then merely said that the RSP of the goods shall be ascertained in prescribed manner. The Rules 2008 putting forth the prescribed manner or the method of ascertaining was introduced by Notification 13/2008 (NT) dt. 1.3.2008 only. 23. It can be seen that even though a methodology to ascertain the RSP is laid down, the same will apply only in situations of (a) and (b) of subsection (4) of Section 4A. On examining the facts, the appellant has adopted a new RSP for the combined goods of laptop computer + carry bag + booklet + Instruction guide. The department has redetermined the RSP of the imported laptop computer alleging misdeclaration of MRP . As there is no methodology or machinery for redetermining the MRP of goods imported fo....
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....nt had cleared the goods by filing an into bond bill of entry and the activity of labelling, affixing MRP, etc. was done under Customs bond and after discharging the customs duty liability, the goods were cleared into domestic tariff area. Therefore, for the period on or after 26-2-2010, since the goods remained in Customs Control, no manufacture has taken place in India and hence, excise duty demand for the period after 26-2-2010 is clearly unsustainable in law. Prior to 26-2-2010, the appellant was clearing the goods into private godowns at Bhiwandi, Dronagiri, etc. and the activities of affixing labels/declaring MRPs, etc. were undertaken at these godowns and the Customs had granted permission to the appellant for the activities to be undertaken outside the Customs area on execution of bond and bank guarantee. For the period prior to 26-2-2010, since there was no procedure prescribed by the Customs authorities, they had cleared the goods on execution of bond and bank guarantee for undertaking the activities of re-packing and re-labelling, etc. and the customs duty (CVD) liabilities were discharged on the basis of the revised MRPs. Alternatively, it is pleaded that if excise duty....
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....the MRP was affixed by way of labelling. The Tribunal held as under : The Commissioner, in the impugned order, demanded duty of over Rs. 58.00 lakhs from the appellants in respect of watches for the period 1-3-2003 to 1012-2003 and imposed on them equal amount of penalty. These watches were imported and cleared on payment of duties of customs (including CVD) on MRP basis and, subsequently, they were repacked and sold to customers after affixing MRP sticker. The above demand of duty of excise is based on the finding that the activity of repacking followed by affixture of MRP sticker amounted to 'manufacture'. In the impugned order, however, learned Commissioner allowed the assessee to avail CENVAT credit of CVD amounting to Rs. 58,23,251/-. Learned counsel submits that the CENVAT credit is more than enough to satisfy the demand of duty and that, in such a revenue-neutral situation, any duty of excise should not have been demanded on MRP basis particularly where the imported watches were cleared on payment of duty on the same basis. In this connection, learned counsel relies on the Tribunal's decision in P.T.C. Industries Ltd. v. CCE, Jaipur-I - 2003 (159) E.L.T. 1046 (Tri.-....
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.... decisions help us to conclude as under : (i) There is no direct mechanism available under Section 3 (2) of CTA to demand the CVD when the same is not based on ad valorem basis. When the CVD is levied based on the RSP less abatement, recourse to Rules of Valuation framed under the authority of Section 14 of Customs Act 1962 is precluded and the sanctity of the declared Retail Sale Price is protected from being re-determined. (ii) Once the goods fall under Third Schedule of CEA 1944 liable for Excise Duty payment under Section 4A, when the labelling / re-labelling is done towards the RSP, the Excise Duty is required to be demanded and not the CVD, i.e, the Additional Duty of Customs, even in the case of import of such goods. (iii) The case laws of L'Oreal and Titan discussed above, show that even Revenue has taken the stand that when the imported goods are affixed with MRP label, the same would amount to manufacture in terms of Section 2 (f) of the CEA 1944. 14. Therefore, we hold that the demand of Customs Duty in the form of differential duty of CVD is without jurisdiction and hence legally not sustainable. 15. Now coming to the factual details, it....
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.... denied. We find that the issue in terms of Section 9D of the CEA 1944 [paramateria with Section 138B of the Customs Act 162] was before the Principal Bench, New Delhi in the case of Surya Wires Pvt Ltd Vs Principal Commissioner CGST Raipur - 2025 (4) TMI 441, wherein the Bench has held as under : 12. A perusal of the impugned order shows that it is based primarily on the statements of Harsh Agrawal, Director of the appellant, Narendra Kumar Rathod, security guard of the appellant, SatyanandSoi, security-in-charge of the appellant and Ishwar Prasad Verma, loading-in-charge of the appellant. These statements were recorded by the Officer under section 14 of the Central Excise Act. 13. The first and foremost issue that arises for consideration is whether such statements could have been considered as relevant and relied upon without following the procedure contemplated in section 9D of the Central Excise Act relating to relevancy of statements under certain circumstances. 14. The statement of witnesses are recorded under section 14 of the Central Excise Act and section 9D of the Central Excise Act deals with relevancy of these statements under certain circums....
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.... the facts which they contain. 22. It would now be appropriate to examine certain decisions interpretating section 9D of the Central Excise Act and section 138B of the Customs Act. 23. In Ambika International vs. Union of India24 decided on 17.06.2016, the Punjab and Haryana High Court examined the provisions of section 9D of the Central Excise Act. The show cause notices that had been issued primarily relied upon statements made under section 14 of the Central Excise Act. It was sought to be contended by the Writ Petitioners that the demand had been confirmed in flagrant violation of the mandatory provisions of section 9D of the Central Excise Act. The High Court held that ifnone of the circumstances contemplated by clause (a) of section 9D(1) exist, then clause (b) of section 9D(1) comes into operation and this provides for two steps to be followed. The first is that the person who made the statement has to be examined as a witness before the adjudicating authority. In the second stage, the adjudicating authority has to form an opinion, having regard to the circumstances of the case, whether the statement should be admitted in evidence in the interests of justic....
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....ontemplated under section 138B(1)(b) has to be followed before the statements recorded under section 108 of the Customs Act can be considered as relevant. 28. It, therefore, transpires from the aforesaid decisions that both section 9D(1)(b) of the Central Excise Act and section 138B(1)(b) of the Customs Act contemplate that when the provisions of clause (a) of these two sections are not applicable, then the statements made under section 14 of the Central Excise Act or under section 108 of the Customs Act during the course of an inquiry under the Acts shall be relevant for the purpose of proving the truth of the facts contained in them only when such persons are examined as witnesses before the adjudicating authority and the adjudicating authority forms an opinion that the statements should be admitted in evidence. It is thereafter that an opportunity has to be provided for cross-examination of such persons. The provisions of section 9D of the Central Excise Act and section 138B(1)(b) of the Customs Act have been held to be mandatory and failure to comply with the procedure would mean that no reliance can be placed on the statements recorded either under section 14D of the ....
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....reme Court in the case of ITC Ltd, has held as under: 47. When we consider the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, we are of the opinion that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under Section 128 or under other relevant provisions of the Act. 11. We observe that the ratio of the above said decision is squarely applicable in this case. We find that the impugned order passed demanding differential duty without challenging the original assessment of the Bills of entry is not sustainable. Hence, the demand is not sustainable on this count also. 21. Viewed from another angle, as per the cited case laws discussed above, changing / relabelling of the goods with revised RSP would amount to manufacture in terms of Section 2 (....
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....l release of any seized goods. Therefore, the ratio of the cited Bombay High Court decision is squarely applicable. We set aside the Confiscation order and the Redemption Fine imposed in the impugned order. 24. The appellant has also argued on the time-bar aspect, on the ground that the earlier SCN for 2019 was issued on 13th September 2019, by invoking the extended period provisions. The present SCN has been issued on 3.2.2020, for the period 2015 to 2017 by invoking the extended period provisions. They have relied on Nizam Sugar Factory Vs Collector of Central Excise A P [2006 (197) ELT 465. We find that the Revenue has undertaken investigation subsequent to issue of the first SCN. Therefore, on its own the second SCN does not get affected by the cited Nizam Sugar decision. We find that the entire demand is made under the wrong interpretation by demanding the Additional Duty of Customs Duty [CVD], whereas, the Duty if any, should have been demanded as Excise Duty as can be observed from the cited case laws. Further there is no factual evidence coming out as to actually it was the appellant only who had changed the labels and had changed the RSP. Since there is a gap of 3 to 5 ....