2026 (4) TMI 542

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....ellants are, inter alia, engaged in import of cellular phones under 'Celkon' brand, which are distributed to various dealers for sale to ultimate customers. M/s Big C is one of the dealers of the appellant with whom they have agreement. The department, on the basis of certain market survey and intelligence, felt that the appellants were resorting to evasion of Customs duty by declaring RSP less than Rs.2,000/- at the time of import and thereafter, altering the MRP printed on the label affixed to individual unit of cellular phones subsequent to the clearance from the customs, which carried MRP higher than Rs.2,000/-. Therefore, based on the investigation, the department felt that the appellant had intentionally declared MRP below Rs.2,000/- in respect of six models to pay lesser CVD. 3. On adjudication, the appellants mainly contested that they were not concerned with the alteration of the MRP and there is no evidence to substantiate the relationship between them and M/s Big C. M/s Big C also took the plea that Rule 5 of Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules (hereinafter referred to as the Central Excise Rules), 2008, is not applicable to th....

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.... Report of Celkon is neither relied upon document nor was the relationship with reference to annual report disclosed in the SCN and they were not put to notice on the relationsip in terms of 5th Annual report of Celkon. Further, the corporate veil can be lifted only in the case of flow back or one single family owning all the companies, which is not available in the present case as there is neither any flow back nor appellant and M/s Big C are owned by a family. They have relied on the judgment of Coordinate Bench in the case of Motorol Speciality Oils Ltd Vs CCCE, Vadodara [2009 (243) ELT 449 (Tri-Ahmd)] and Metero Satellite Ltd & Telsatar Electronics Vs Collector [1985 (22) ELT 271]. 5. On the reliance placed by the department on market survey, learned Advocate has submitted that the department has not produced any tangible evidence that any market survey was conducted on 28.01.2014 as the said market survey report is not shown as relied upon document in the SCN except for the photographs of the label on outer package of the cellular phones, which were relied in the SCN. He has relied on the judgments, as under, in support that the appellant was not associated with the process....

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....f Shri K. Krishnapavan, who had admitted that RSP was enhanced on some models during festival season only for limited stock. 11. Before we proceed to examine the factual aspect and the legal points involved, we find that cellular phones were brought under the ambit of section 4A of Central Excise Act w.e.f. 24.03.2011 and therefore, the CVD on imported cellular phones was also required to be paid on the declared RSP after allowing abatement of 35%. Initially, CVD was 1%, which got increased to 6% on cellular phones of RSP above Rs.2,000/- w.e.f. 01.03.2013. We find that the department has conducted certain survey, wherein, they found certain packets of cellular phones of certain models in the office premises of M/s Big C where the boxes of certain models of Celkon brand viz., ARR35, C66+, C208, C42, AR45, C720 and C820 were found to be indicating month of import as well as MRP. They also seized certain phones, which had not yet been cleared from the customs area where the declared MRP was less than Rs.2,000/- but the department alleged that MRP found in respect of similar models during market survey was more than Rs.2,000/-. It is observed that in respect of models C7045 and C50....

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.... if any, has taken place in the premises of their distributor, who are a separate legal entity. We also find that this is not a case where corporate veil can be pierced to establish that both the appellant and M/s Big C being one and the same company merely because there is some cross shareholding. There is no evidence to suggest that there is any flow back or that appellant was engaged in day to day operations or activities of M/s Big C. 13. We have also perused some of the judgments cited by the appellant in their defence. In the case of Larsen & Toubro Ltd, RN Mukhija & Prakash B Shet Vs CCE, Mumbai-I (supra), wherein the issue was competence of customs authority to take recourse to section 28 of the Customs Act, 1962 in respect of goods cleared domestically and in terms of authority under section 4A of Central Excise Act, 1944, the Coordinate Bench observed that there are several decisions of the Tribunal on the competence of customs authorities to take recourse to section 28 of the Customs Act in the absence of machinery provision for revision of declared sale price at the stage of assessment. They relied on the earlier judgment of Larger Bench in the case of Ocean Ceramic ....

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....Addl Duty of Customs, which is erroneous. (c) The persons recording the statements, relied upon heavily by the Revenue, have not been subjected to Section 138B procedure. Therefore, their statements lose the evidentiary value. (d) The goods have been cleared under self-assessed Bill of Entry during the period 2015 to 2017. The assessments were required to be challenged by the Revenue by way of Appeals, as has been held by the Hon'ble Supreme Court in the case of ITC, which has not been done in this case. (e) In view of (a) to (d) above, the Appeals are allowed on merits. (f) The imported goods have been cleared after the self-assessment, without any Bond, in the normal course. Therefore, in the absence of any Bond and in the absence of the goods available physically, the Confiscation order is legally not sustainable. (g) No proper documentary evidence has been brought in towards willful suppression with an intent to evade against the appellants. Hence, the confirmed demand for the extended period is set aside." 15. Therefore, we find that the evidence on record is not sufficient enough to establish that it is the importer/appellant wh....