AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 136
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....fter-sales/ replacement market and thereby Customs Duty was being evaded by avoiding payment of CVD on the basis of Retail Sale Price (RSP)/ Maximum Retail Price (MRP), as required under Central Excise Notification 11/2006 (N.T) dated 29.05.2006 (upto 29.02.2008) and Central Excise Notification - 14/2008 (N.T) dated 01.03.2008. The check period involved in this dispute is from January 2007 to August 2008. The said company came to be split into two entities - M/s Kamaz Vectra Ltd, that took over the manufacturing business of TVML, and M/s Vectra Advanced Engg. Pvt. Ltd, Bangalore (VAEPL - who has stepped into the shoes of the appellant as per the Agreement), that took over the assets, inventories and liabilities etc of TVML under a Business Transfer Agreement dated 05.08.2008. Accordingly on completion of investigations, a Show Cause Notice (SCN) was issued to the appellant for rejection of the valuation of the goods done under section 3 of the Customs Tariff Act, 1975 read with Section 4 of the Central Excise Act, 1944. It was proposed to redetermine the same under section 3(2) of the Customs Tariff Act read with Sectio 4A of the Central Excise Act, 1944 which attracted the provisi....
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....viously sold trucks. TVML established a 'Dealership Agreement' with M/s Pushpak Associate, which reflected the standard terms found in similar agreements between TVML and its dealers. This agreement ran from 01.04.2008 until 31.03.2010. On 05.08.2008, all TVML's assets and liabilities were transferred to the Appellant (formerly "Vectra Advance Engineering Pvt. Ltd." or "VAEPL") under a Business Transfer Agreement. According to Clause 4.2, the Appellant took on all obligations, including annual maintenance for trucks sold before this transfer. TVML's factory closed after the transfer, confirming that its Tatra truck manufacturing operations ceased; this is noted in Paragraph 3 of the Show Cause Notice dated 28.12.2011. Following the terms of the illustrative agreement with M/s Pushpak Associates, the Appellant continued selling truck parts and components to dealers during the period covered by the agreement. He submitted that: A) The proviso of Section 3(2) does not prescribe any mechanism for computation of RSP/MRP when RSP has not been affixed to imported goods, the Department has no authority to collect tax by adopting its own computation mechanism. B) The impor....
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....submission that there is no machinery provision for ascertaining the RSP. He submitted that there are umpteen instances in almost all enactments where machinery provisions in the form of Rules/Regulations have not been prescribed. In the Customs Act itself. In the case of the like at hand, the RSP could be ascertained in the manner described under Section 4A of the Central Excise Act, as per the definition of 'retail selling price' in the said Section as well as the Notifications issued thereunder. He made submissions in favour of upholding the extended time limit and penalties etc. and prayed that the appeal may be rejected. 4. We have heard the parties and carefully perused the appeal and connected papers. We find that the following issues have been raised by the appellant: A) The imported goods were not liable for MRP based CVD as they were not meant for retail sale but meant for institutional consumers in the mining industry. B) As far as levy of CVD under Section 3 of the Customs Tariff Act is concerned, no machinery provision exists for determination of RSP in cases it was not declared. C) The Department has wrongly calculated the CVD on the MRP.....
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....nt examination, it is noticed by us though not referred to by either party at the Bar, that the Hon'ble Supreme Court by a landmark judgment in JAYANTI FOOD PROCESSING P LTD Vs COMMISSIONER OF CENTRAL EXCISE, RAJASTHAN [(2007) INSC 854 / 2007-TIOL150-SC-CX], had examined the legal issue and held as under: "We would, therefore, first explain the interpretation and scope of Section 4A more particularly sub-sections (1) and (2) thereof. Section 4A was added by Section 82 of the Finance Act, 1997 (Act 26 of 1997) which amendment was with effect from 14-5-1997. Section 4A, as it originally stood, and relevant for our purposes, is as under: "Section 4A. Valuation of excisable goods with reference to retail sale price - (1) The Central Government may, by notification in the Official Gazette, specify any goods, 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 goods, to which the provisions of sub-section (2) shall apply. (2) Where the goods specifie....
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....on of the goods under various circumstances, e.g., in the matter of wholesale trade or in the matter of sales being at the different prices for different places of removal or in case where the assessee sold the goods only to related persons, etc. Section 4A of the Act, as would be clear from the language of sub-section (1), linked the valuation of the goods to the provisions of SWM Act or the Rules made thereunder by firstly providing that it would be for the Central Government to specify any goods in respect of which the declaration of price on the package was required under the provisions of SWM Act, Rules made thereunder or any law for the time being in force. In short sub-section (1) was linked with the packages of the goods in respect of which the retail sale price was required to be printed under SWM Act and the Rules made thereunder or any other law. Subsection (2) then provides that such specified goods where they are excisable goods would be valued not on any other basis but on the basis of the retail sale price declared on such packages. The Section also provides that the assessee would be entitled to the deduction from such valuation the amount of abatement provided by t....
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....y other law to declare the MRP on the packet. The Hon'ble Court clarified that it is not the nature of sale which is the relevant factor for application of Section 4A but the applicability would depend upon the five factors enumerated above. That the thrust of Section 4A is on the packages and not on the commodity and it is only where the goods are sold in the packages that the section would be attracted. Hence the view canvassed by revenue that once the goods are specified under the notification, that itself will be a deciding factor, for such goods to be valued and assessed under Section 4A of the Act, cannot be sustained. In fact, an identical view was submitted by an appellant in JAYANTI FOOD PROCESSING (supra), but did not find favour with the Hon'ble Court. 6. Having found so we are at a dilemma in proceeding further in the matter. We find that the period of the impugned demand is from January 2007 to August 2008. Section 4A of the Central Excise Act at the relevant time refers to the Standards of Weights and Measures Act, 1976 (60 of 1976) and the Rules made there under. However, para 6 of the SCN and OIO refers to specific provisions from the Legal Metrology Act of 2009 ....
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.... 9 SCC 234], held that the mere mention of a wrong provision of law when the power exercised is available even though under a different provision, is by itself not sufficient to invalidate the exercise of that power. However, this is a case of invoking the provisions of a new law that was non-existent during the occurrence of relevant facts, central to the disagreement between the parties and is part of the core of the SCN. 9. Further the Apex Court in Glaxo Smith Kline PLC and others Vs Controller of Patents and Designs and Others [(2008) 17 SCC 416] held that pre-existing right prior to coming into force of the new law continues to be governed by the old law. Also relevant is the Legal Maxim "nova constitutio futuris formam imponere debet non praeteritis", which means. 'a new law ought to regulate what is to follow, not the past'. It contains a principle of presumption of prospectivity of a statute. Statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested. The Hon'ble Supreme Court in T. Kaliamurthi Vs Five Gori Thaikkal Wakf [(2008) 9 SCC 306], held, it is well settled that no statute shall be construed to have a retrospective o....