AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 618
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....tion under section 111(m) of the Customs Act but option was given to the appellant to redeem the same on payment of redemption fine of Rs. 2 Lakhs. The Commissioner (Appeals) also imposed penalty upon the appellant under section 114A of the Customs Act. 2. The appellant is a company engaged in the import and sale of watches in India. The appellant is a part of the Richemont group and was appointed as the authorized distributor of watches in India by Richemont International SA, Switzerland for the brands owned by the Richemont group. 3. In respect to the disputed transaction of watches, the appellant claims that at the time of import, the Retail Sale Price [RSP] was affixed to the imported watches according to the prices declared by the foreign exporter (i.e. Richemont Dubai, FZE), and the appellant discharged the applicable customs duty. Such imports were duly verified, finally assessed, and cleared by customs authorities without any provisional assessment, bond, or user conditions. 4. For its operations in India, the appellant claims that it appointed authorized dealers, who are unrelated parties, to whom such imported watches were sold on a principal-to-principal basis. ....
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....eging that: (a) The price of watches seized from the premises of the Additional Director (imported and supplied by the appellant) was upwardly revised post their import as per the revised RSP circulated by the appellant. However, no differential CVD was paid on such revised RSP by the appellant; and (b) Under section 4A of the Central Excise Act, 1944 [the Central Excise Act] read with the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 [the 2008 Rules], the upward revision of RSP would be the correct RSP for payment of CVD. 11. Accordingly, the show cause notice proposed to: (a) Treat the upwardly revised RSP as the value for assessment of CVD and demand differential duty amount of Rs. 4,47,394/-, in terms of section 28(4) of the Customs Act along with applicable interest under section 28AA of the Customs Act; (b) Confiscate the imported watches under section 111(m) of the Customs Act and imposes penalty under section 112(a) and (b) of the Customs Act; and (c) Impose penalty under sections 114A and 114AA of the Customs Act. 12. The show cause notice was adjudicated by the Joint Commissioner by or....
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.... if any, does not affect goods already imported/old stock; (v) No penalty can be imposed when the demand itself is unsustainable. Even otherwise, no penalty can be imposed on the appellant on account of mistake, if any, committed by the authorized dealers; (vi) In the absence of any wilful act of suppression or intent to evade tax, no penalty can be imposed under section 114A of the Customs Act; and (vii) No interest can be levied when the demand itself is unsustainable. 16. Shri Shiv Shankar, learned authorized representative appearing for the department made the following submissions: (i) The Commissioner (Appeals) correctly upheld the findings of the Joint Commissioner that differential CVD was rightly demanded from the appellant under section 3(2) of the Customs Tariff Act read with section 4A of the Central Excise Act and rule 5 of the 2008 Rules as RSP of the watches were revised upward post-import; (ii) The plea of the appellant that it had no control over the revised RSP is contradicted by it own internal communications, price lists, and circulars, which demonstrate that the revised RSP was determined by the appellant to their....
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....urden of proof is on the Revenue, the department did not bring on record any material evidence to demonstrate that any benefit was earned or accrued by the appellant on account of revision of RSP by the authorized dealers. The appellant has also contended that circulation of a revised price list, on behalf of the overseas supplier, was only for the purpose of information and cannot form the basis for levying additional custom duty and that RSP was correctly declared in the Bill of Entry at the time of import and the department did not bring on record any material evidence to invoke the deeming fiction under section 3(2) of the Customs Tariff Act. 19. The case of the department further is that Amit Sinha in his statement had admitted that if RSP is upward revised, differential CVD is payable and the appellant had previously paid differential CVD on upward revision of RSP of the stock available in its warehouse. 20. The contention of the appellant is that Amit Sinha is not an expert on customs laws. Further, the appellant, in its reply to the show cause notice, clarified that in the past it had only paid differential CVD when RSP of watches was revised by the appellant itself. ....