TaxTMI 
TaxTMI 
2024 (4) TMI 1378
X X X X Extracts X X X X
X X X X Extracts X X X X
....er chapter heading 21.06 of the Central Excise Tariff and are levied to Additional Duty of Customs (CVD) on the basis of the retail sale price, in terms of Section 3 (2) of the Customs Tariff Act, 1975 read with relevant notification issued from time to time and Section 4A of the Central Excise Act, 1944. The appellants had imported the above goods through JNCH Seaport and in case of emergency have also imported through Sahar airport. During the period of import in 2008, on the basis of an intelligence that the appellants are declaring incorrect description so as to mis-classify the imported goods under lower rate of duty and mis-declaring the Maximum Retail Price (MRP)/Retail Sale Price (RSP), the Central Intelligence Unit (CIU), JNCH have conducted an enquiry into the imports by the appellants vide Bill of Entry (B/E) No.703275 dated 08.02.2008 along with their earlier imports. On completion of investigation, against mis-declaration of Retail Sale Price (RSP) and mis-classification of the imported goods, the department had initiated show cause proceedings by issue of Show Cause Notice (SCN) dated 06.06.2008 proposing for reclassification of impugned goods and consequent demand fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rs.10,00,000/- (Rupees Ten Lakhs only) on M/s Neulife Nutrition Systems u/s 112(a) of the Customs Act, 1962." 2.3 The applicant had preferred an appeal before this Tribunal and in the first round of litigation, the Tribunal had passed the Order No. A/85430-85431/2018-WZB dated 27.02.2008 wherein the Tribunal had decided the case by allowing the appellants' appeal and in dismissing the appeal filed by the Revenue. The relevant paragraph of the said order of the Tribunal, in the first round of litigation, is extracted and given below, as under: "4. We have heard both sides at considerable length and we find that the issues in dispute can be disposed of by a common order and on the basis of precedent and law. There is, therefore, no requirement to delve into the many submissions made by Learned Counsel and by Learned Authorized Representative. 5. We take up the issue of classification of the 'flavours of whey protein concentrate', 'casein' and 'glutamine powder' and 'creatine' that Revenue desire to bring under heading nos. 2106 10 10 and 2106 90 99. As pointed out by Learned Counsel, the Tribunal, in Amrit Foods v. Commissioner of Central Excise, Meerut-I [200....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he appellants claim is that the stabilizers are added for keeping the products stabilize during its storage and transport and its shelf life. The product stabilizers are emulsifier and maintains consistency of the products. They are not adding additional quality to the products. We find that this is squarely decided in case of Nestle India Limited v. CCE, New Delhi (supra) by this Tribunal. In the said decision, it is made clear that the milk product will go to the Heading 19.01 only if it contains other ingredients not permitted by Headings 04.01 to 04.04. We find that in the present case no other ingredients except permissible stabilizers have been added. Addition of stabilizers is essential to maintain the consistency and shelf life of the products. HSN Explanatory Note also qualifies the addition of stabilizers without changing its classification from Chapters 4 to 19. The ratio of the decisions relied upon by the Revenue has no relevance to the present dispute. We, therefore, classify the products SSM and MSM under sub-heading 0404.90 of the Central Excise Tariff. The other two products i.e. coffee creamer and cream packed are also classified under sub-heading 0404.90. There i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and that any revision thereafter would necessarily require the affixing of fresh labels which would amount to manufacture, therefore, subject to duties of central excise as leviable under Central Excise Act, 1944 with its own machinery provisions for the recovery of any duty that would arise in consequence. 9. On these two grounds, the redetermination of value for assessment of additional duties of customs by the adjudicating authority fails to find the backing of law. 10. Accordingly, we find that the appeal of Revenue must be dismissed and that of the importer-appellant be allowed." 2.4 We further find that against aforesaid Tribunal's Order dated 27.02.2008, the department had filed a Civil Appeal No. 866 of 2019 before the Hon'ble Supreme Court and vide its Order dated 28.07.2021, the Hon'ble Apex Court had set aside the finding and conclusion of the Tribunal on the issue of valuation and remanded back the case for fresh consideration on merits and in accordance with the law on this limited issue. Further, the Hon'ble Supreme Court had upheld the views of the Commissioner in respect of classification of the product specified as 'whey protein' as discussed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....All contentions available to the parties in that regard are left open. 8. The appeal is partly allowed in the above terms. 9. No order as to costs. ......................... J. (A.M. Khanwilkar ) ......................... J. (Sanjiv Khanna) NEW DELHI JULY 28, 2021. 2.5 On the basis of the remand directions of the Hon'ble Supreme Court vide above judgement dated 28.07.2021, this case has been come up for fresh consideration before the Tribunal. Thus, this appeal is now coming before the Tribunal in the second round of litigation on the limited issue of dispute with respect to valuation of the imported goods. 3. Learned Advocate for the appellant submitted that the department had demanded the differential duty in respect of imports under B/E No.703275 dated 08.02.2008 and all past imports during the period 2005 to 2008 in which it was alleged that the RSP/MRP affixed on the goods was higher than the one declared in the various B/Es on the basis of market enquiry conducted at the premises of various dealers/retailers and pricelist alleged to have been found in the dealers' premises. However, learned Advocate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the legal provisions and on the basis of the facts of the case, as per the directions of the Hon'ble Supreme Court vide its judgement dated 26.07.2021 in remitting this case for reconsideration by this Tribunal, and with specific reference to the paragraph 5 of the above judgement. Thus we would like to examine the legal provisions governing the Additional duty of Customs with particular reference to Section 3 of the Customs Tariff Act, 1975; Section 4A of the Central Excise Act, 1944 and Section 14 of the Customs Act, 1962 and other relevant legal provisions as detailed below. The period of dispute in the present case is between 2005 to 2008. The relevant legal provisions of the Act, Rules and notification concerning levy of Additional duty of Customs are extracted and provided as follows: "The Customs Tariff Act, 1975 Levy of additional duty equal to excise duty, sales tax, local taxes and other charges. 3. (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g duty referred to in section 9; and (d) the anti-dumping duty referred to in section 9A : Provided that in case of an article imported into India,- (a) in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 [later substituted as Legal Metrology Act, 2009 (1 of 2010) w.e.f.08.04.2011] 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 the goods specified by notification in the Official Gazette under sub-section (1) of section 4A of the Central Excise Act, 1944 (1 of 1944). 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. (3) If the Central Government is satisfied that it is necessary in the public inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e additional duty on any imported article, the value of the imported article shall, notwithstanding anything contained in sub-section (2), or 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 - ^1[(a) the duty referred to in sub-sections (5), (7) and (9);] (b) the safeguard duty referred to in sections 8B and 8C; (c) the countervailing duty referred to in section 9; and (d) the anti-dumping duty referred to in section 9A." "The Customs Act, 1962 Valuation of goods. ^114. (1) For the purposes of the Customs Tariff Act, 1975 (51 of 1975), or any other law for the time being in force, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te of exchange- (i) determined by the Board, or (ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency; (b) "foreign currency" and "Indian currency" have the meanings respectively assigned to them in clause (m) and clause (q) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999). "Central Excise Act, 1944 Valuation of excisable goods with reference to retail sale price. 4A. (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 [later substituted as Legal Metrology Act, 2009 (1 of 2010) w.e.f. 08.04.2011] 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 specified under sub-section (1) are excisable goods and are chargeable to duty of excise with reference to value, then, notwithstanding an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such altered retail sale price shall be deemed to be the retail sale price; (c) where different retail sale prices are declared on different packages for the sale of any excisable goods in packaged form in different areas, each such retail sale price shall be the retail sale price for the purposes of valuation of the excisable goods intended to be sold in the area to which the retail sale price relates." "Notification No.13/2008-Central Excise (N.T) New Delhi, the 1st March, 2008 11 Phalguna, 1929 (Saka) GSR......(E)-In exercise of the powers conferred by section 37 read with sub-section (4) of section 4A of the Central Excise Act,1944 (1 of 1944), the Central Government hereby makes the following rules, namely:- 1.(1) These rules may be called the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In these rules, unless the context otherwise requires,- (a) 'Act' means the Central Excise Act, 1944 (1 of 1944); (b) 'retail sale price' means the retail sale price as defined in section 4....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore and after the date of removal of such goods: Provided that where the manufacturer alters or tampers the declared retail sale price resulting into more than one retail sale price available on such goods, then, the highest of such retail sale price shall be taken as the retail sale price of all such goods. 6. If the retail sale price of any excisable goods cannot be ascertained under these rules, the retail sale price shall be ascertained in accordance with the principles and the provisions of section 4A of the Act and the rules aforesaid." "Notification No. 2/2006-C.E. (N.T.), dated 1-3-2006 In exercise of the powers conferred by sub-section (1) and subsection (2) of section 4A of the Central Excise Act, 1944 (1 of 1944) and in supercession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 13/2002-Central Excise (N.T.), dated the 1st March, 2002, published in the Gazette of India Extraordinary, vide number G.S.R 152(E), dated the 1st March, 2002, except as respects things done or omitted to be done before such supercession, the Central Government hereby specifies the goods mentioned in Column (3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der Section 3 ibid, that the additional duty of customs shall be equal to the excise duty for the time being leviable on like article produced or manufactured in India. 8.1 In order to determine the amount of such additional duty of customs which is leviable as above being equal to the excise duty, reference has to be made to the First Schedule to the Central Excise Tariff for identification of appropriate ad-valorem rate and the respective notifications, if any, to determine the effective rate of duty. Further, in case where the levy of additional duty of customs is to be determined with respect to the retail sale price that is required to be declared as per the extant law viz., Standards of Weights and Measures Act, 1976 (presently it is Legal Metrology Act, 2009) or the rules made thereunder, then RSP based levy as per Section 4A of the Central Excise Act would apply for determination of the amount of additional duty of customs. These legal provisions are specific to the calculation of additional duty of customs under sub-section (2) to Section 3 of the Customs Tariff Act and have been given as 'Non obstante clause' by specific wordings in the said sub-section which reads as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iled examination of the above legal provisions relevant to the levy of additional duty of customs on retail sale price, it also transpires that the following are the legal position in valuation of the imported goods for the purpose of calculation of additional duty of Customs under the extant legal provisions: (i) in respect of the imported goods there shall be legal requirement in terms of the Standards of Weights and Measures Act, 1976/Legal Metrology Act, 2009 or the rules made thereunder, to declare on the package thereof the retail sale price of such goods (ii) in such a case having the legal requirement as above at (i), then notwithstanding the legal provision under Section 4 of the Central Excise Act, 1944 for determination of excise duty on the basis of transaction value, the value shall be deemed to be the retail sale price declared on such goods less such amount of abatement, as the Central Government may allow by notification in the Official Gazette. (iii) In terms of Section 3 of the Customs Tariff Act, 1975, in article imported in India shall be liable additional duty of customs which is equal to the excise duty for the time being leviable on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etail Sale Price and not on the basis of assessable value plus applicable duties of customs. 8.3 In respect of the RSP to be declared by the importer, the plea given by the appellants that it varies with each shipment on account of various factors, such as the price charged by the supplier not being constant, fluctuations in foreign exchange rate and variations in the local market prices cannot be taken as a ground for declaring an assumed RSP of two and half times the CIF value of imported goods. The legal requirements under Rule 6 of the Legal Metrology (Packaged Commodities) Rules, 2011, is that every package of imported goods for which these Rules apply shall bear thereon or on the label securely affixed thereto, a definite, plain and conspicuous declaration made, inter-alia, indicating (a) the name and address of the manufacturer, or where the manufacturer is not the packer, the name and address of the manufacturer and packer and for any imported package the name and address of the importer (b) the retail sale price of the package. Further, "retail sale price" in terms of the above Rules shall mean the maximum price at which the commodity in packaged form may be sold to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r goods pending for clearance as they have not worked out the same.....................The market inquiry conducted in this case is as per the practice of the department and nothing new like drawal of panchanama or recording of statements of the shopkeepers need be expected by the importer. At the most, the importer could have requested for the copy of the said report as they have done for number of various documents, though the details of the same were made available to the importer during recording of statements based on which he confessed the said change in RSP........... As far as the consignments beyond 6 months period are concerned, it is placed on record that the goods pertaining to such consignments were not available in market for verification of the MRP...................... In view of the above, I am of the firm opinion that the importer has mis-declared RSP in the Bs.E (sometimes even equal to the CIF value) deliberately with an intention to evade the customs duty and on suppression of facts from the department which could be brought on record only after investigation by the CIU. Therefore, the differential duty on account of this mis-declaration is required to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....emand in the impugned order for the differential additional duty of customs in respect of past imports, has no specific basis, as it is on record that entire proposal for differential duties is on the basis of examination of the goods in respect of single B/E No. 703275 dated 08.02.2008 containing 46 items, out of which only 13 items are covered under the scope of RSP based levy. 10. In the impugned order the classification of various goods imported by the appellants have been determined as follows: "109. Since CTH 2106 is residuary heading for protein concentrates, in terms of Rule 3 of the rules for interpretation of the tariff, the imported goods, i.e., whey protein concentrates, are rightly classifiable under CTH 0404, or CTH 3502/3504, depending on the % of whey protein content" "111. .... Glutamine is an amino acid and is formed by replacing the side chain hydroxyl of Glutamic Acid. Salts of Glutamic Acid are classified under CTH 2922, and specifically under CTH 29224290. Since there are absolutely no additives in the item imported, there can be no reason to classify the goods in the residual heading of CTH 2106, in the existence of a specific heading." ....