TaxTMI 
TaxTMI 
2026 (6) TMI 958
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....ts office at Siraj-ud-Udola Sarani, Suite 508, 6 waterloo Street Kolkata - 700 069 and holder of IEC No. 0207026912 is inter-alia engaged in the import of digital projectors falling under Tariff heading 85286900. The digital projectors so imported by the appellant were not meant for outright sale and the same were installed in various cinema halls in various regions of West Bengal on "Right to Use" basis along with other equipment such as UPS, Computer, Server, Cables, etc. 3. The appellant, during the month of April 2010, imported Ray Photon Nano Projectors from Delta International China Under Bill of Entry No. 604988 dated 06.04.2010 and Optoma DLP Projectors from Optoma Corporation, Taipei, Taiwan under Bill of Entry No. 605307 dated 08.04.2010. 4. While assessing the aforesaid Bills of Entry, the Ld. Appraiser adopted an arbitrary basis for valuation and assumed the MRP of the imported projectors to be three times their FOB value. The Appraiser further presumed the insurance component at 1.125% of the FOB value and, in respect of Bill of Entry No. 604988, assumed freight at 20% of the FOB value. The values so adopted are significantly higher than the actual costs incurred....
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....n behalf of the appellant has made various submissions in support of his contentions, which can inter alia be summarized as follows: - A. The authorities have erroneously considered RSP/MRP Value instead of Transaction Value for the purpose of computing Countervailing Duty. (i) The appellant states that the customs authorities have erroneously without authority of law assessed and computed CVD on RSP/MRP basis instead of Transaction Value. In this regard, it has been submitted that the Projectors so imported by the appellant were not intended for Retail sale but were intended to be leased / let out to various cinema halls on "Right to Use" basis. The appellant was in possession of such "Right to Use" Agreements entered with various cinema hall owners entered prior to the imports which would clearly go on to show that the projectors imported by the appellant were not mean for sale. (ii) The Proviso to Section 3(2) of the Customs Tariff Act, 1975 prescribes two mandatory conditions for levy of CVD on RSP basis, namely that the goods must be required to declare RSP on the package under the Legal Metrology Act, 2011 and must be notified under Section 4A(1) of the Central Excis....
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.... imported by the appellant should have been determined by taking recourse to the value of identical goods imported during the same period and the same could not have been arbitrarily assumed to be thrice the FOB value of the imported goods (i) Without prejudice to the submissions made hereinabove, the appellant submits that even if the RSP value is to be considered for the purpose of determining CVD on the imported goods, the same must be applied consistently and uniformly for identical goods imported during the same period. (ii) That the appellant has been importing the said projectors for the past two years, during which more than ten Bills of Entry have been assessed by the Department, and in all such cases except the present one, the authorities have consistently accepted the RSP/MRP declared by the appellant. The RSPs taken by the Department in the past is as under: • Ray Photon Nano Projectors Bill of Entry No. 586773 dated 09.12.2009 and Bill of Entry No. 590758 dated 06.01.2010, wherein the Department accepted the declared RSP/MRP of Rs. 3,62,500/- for assessment purposes. However, in the present case, the Department has arbitrarily adopted the R....
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.... the FOB value of the imported, in terms of Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. (ii) Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 permits adoption of freight at 20% of the FOB value only where the actual cost of freight is not ascertainable. In the present case, the appellant had duly furnished the invoices along with the airwaybill copy reflecting the actual freight incurred to the tune of Rs. 2,23,790, which was readily determinable and forms part of the record. Therefore, the action of the authorities in disregarding the said documentary evidence and erroneously adopting freight at 20% of the FOB value goods (i.e. Rs. 10,55,700/-) is contrary to the statutory provisions and unsustainable in law, and the actual freight cost incurred by the appellant ought to be accepted for the purpose of valuation. In that event, the amendment u/s 149 ibid in respect of the freight component ought to have been allowed as copies of such invoices was in possession of the appellant at the time of import. (iii) Reliance in above regard is placed on the judgment of the Hon'ble Supreme Court in W....
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....n 149 of the Customs Act, 1962 is permissible on the basis of documentary evidence contemporaneous with the import, i.e., documents which were in existence at the time of clearance of the goods. Accordingly, where the documents were in possession of the importer at the time of import and their genuineness is not disputed by the Customs authorities, amendment cannot be denied. (ii) Reliance in this regard is placed on the following Judgments of various High Courts and Tribunal: • Hewlett Packard Enterprise India (P.) Ltd. Vs. Jt. Commr. of Cus., Chennai [ 2021 (375) E.L.T. 488 (Mad.)] • Hindustan Unilever Vs. Union of India [ 2021 (377) ELT 4 (Mad.)] • M/s. Harris and Menuk Chemicals Pvt. Ltd Vs. The Asst. Commissioner of Customs [WP No. 37599 OF 2025] • Dimension Data India Pvt. Ltd. Vs. Commissioner of Customs [ 2021 (376) E.L.T. 192 (Bom.)] • Mohit Overseas Vs. The CC & Anr. [2016 (335) E.L.T. 18 (Del.)] • M/s. Sainest Tubes Pvt Ltd Vs. C.C. - Ahmedabad [2020 (3) TMI 493 - CESTAT AHMEDABAD] • Commr. of Cus., C. Ex. & S.T., Noida Vs. Samsung India Electronics Pvt. Ltd. [ 2018 (360) E.L.T.....
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....y or restrict the statutory entitlement for amendment, as Section 149 does not impose any such condition or limitation. Any interpretation to the contrary would defeat the legislative intent and render the provision redundant. (iii) Therefore, it is submitted that the remedies of appeal under Section 128 of the Act and amendment under Section 149 of the Act are independent and operate in distinctly. Accordingly, the rejection of the appellant's request for amendment on grounds unrelated to Section 149 is legally unsustainable. It is therefore prayed that the amendment of the Bills of Entry be allowed in accordance with law. 9. On the other hand, the Ld. Authorized Representatives of the Revenue appearing before us have supported the impugned order. 10. Heard the parties and considered their submissions. 11. After hearing the parties, we find that the following issues emerge: - (a) Whether the authorities below have erroneously considered the RSP / MRP value for determination of the assessable value to demand Countervailing Duty (CVD) from the appellant, or not. (b) Whether adopting freight value at 20% of the FOB value of the goods is justified or not.....
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....t portion of this Tribunal's decision in Bharti Telemedia Ltd. (supra) is reproduced below: - 6. We have carefully considered the submissions made by both sides. 7. The issue is to be examined with reference to the legal provisions. The countervailing duty i.e. CVD, as it is commonly referred to, is levied under Section 3(2) of the Customs Tariff Act, 1975. The dispute centers around the proviso to Section 3(2) which states that : Provided that in case of an article imported into India (a) in relation to which it is required, under the provisions of the Legal Metrology Act, 2009 (1 of 2010) 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 articles; 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 - (i) 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), the value of the imp....
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....group of individuals or any other consumer; (m) "retail sale price" means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer and the price shall be printed on the package in the manner given below : "Maximum or Max. retail price Rs...../- Rs.... inclusive of all taxes or in the form MRP Rs. /- Rs...... incl., of all taxes after taking into account the fraction of less than fifty paise to be rounded off to the preceding rupees and fraction of above 50 paise and up to 95 paise to the rounded off to fifty paise;" The retail sale price is defined above as the maximum price at which retail package may be sold. And retail package means packages which are intended for retail sale to the ultimate consumer. In other words the retail price will be required to be declared on the package only if it is intended for retail sale. The ld. Counsels have contended that there is no sale at all. They have referred to the definition of "sale" under the Legal Metrology Act, and emphasized that unless there is transfer of property it cannot be said that sale has taken place. It is seen from the definition that there should be a transf....
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.... basis of evidence it can be established that there is transfer of property in the transactions between the appellant and the ultimate subscriber of DTH Service. The appellants have put forth various pieces of evidence in this regard. They have referred to the agreements with their service provider, distributor as well as with the ultimate consumers. None of the agreements speak of transfer of property of STBs. They have also referred to the declaration on the subscriber application form (SAF) filled by the subscriber which clearly indicates that the title to the goods, namely STBs, remains with the appellants. The ld. AR argued that while signing the SAF, the subscriber doesn't put a remark against any of the options i.e. the options of sale or hire-purchase or rental. According to him such a contract involving the transactions becomes void in terms of the Indian Contract Act as the consumer is not aware of what he has agreed to in the SAF. We are not inclined to go into the details of the Contract Act for the reason that there is enough evidence to indicate that there is no sale involved in the transaction. We find that the STBs are shown as capital assets in the books of account....
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....ervice charges. In the absence of any credible evidence, we reject the contention of Revenue that the appellants have devised a way to build the cost of the STBs into the service charges. We find the case at hand quite similar to the transactions of SIM Cards for Cellular Phones. The Hon'ble Supreme Court in the case of Idea Mobile Communication Ltd. (supra) held that "The position in law is therefore clear that the amount received by the cellular telephone company from its subscribers towards SIM Card will form part of the taxable value for levy of service tax, for the SIM Cards are never sold as goods independent from services provided. They are considered part and parcel of the services provided and the dominant position of the transaction is to provide services and not to sell the material i.e. SIM Cards which on its own but without the service would hardly have any value at all. Thus, it is established from the records and facts of this case that the value of SIM cards forms part of the activation charges as no activation is possible without a valid functioning of SIM card and the value of the taxable service is calculated on the gross total amount received by the operator fro....
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....s that because the transaction between the service provider and the customer has a warranty clause, therefore it can be said that the goods have been sold and the property does not remain with the service provider. This argument does not appeal to us because warranty is normally provided in the delivery of services too and not in the delivery of goods alone. And in the present case what is provided is delivery of service. The allegation by Revenue that the cost of STBs is recovered through service charges is belied by the fact that the duty paid in terms of Section 4 of the Central Excise Act would be more than the duty payable under Section 4A considering that, in the latter case, refund of SAD would be admissible. The counsels submitted calculation charts to evidence this point and Revenue does not counter the same. 9.2 The ld. Counsel for Bharti Telemedia also contended that there is no mechanism for determining duty under Section 4A if MRP is not printed on the packages. As we have already decided that there is no sale in the present case, we do not find it necessary to go into this contention. 10. Both sides relied heavily on the Hon'ble Supreme Court judgmen....
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....n Section 2(v), Rule 6(1)(f) will not be attracted and thus such package would not be governed under the provisions of SWM(PC) Rules which would clearly take such package out of the restricted arena of Section 4A(1) of the Act and would put it in the broader arena of Section 4 of the Act." Rule 6(1)(f) which is now Rule 6(1)(e), requires every package to bear the retail sale price. Applying the ratio of the above judgment we see in the present case also, as there is no sale involved, Rule 6(1)(e) is not attracted. Therefore the imported packages would not be governed by the provisions of LMA (PC Rules) and would not be assessable to duty on RSP basis. 10.2 Ld. AR has not appreciated the Hon'ble Supreme Court judgment above in its proper perspective. In the said judgment it was held that : "We are not in a position to accept the arguments of learned Counsel that merely because there is a bulk sale to DoT, MTNL and BSNL, the assessment should be under Section 4 of the Act. We again mention it at the cost of repetition that the nature of sale is not important, what is important is the requirement of printing the MRP on the packages. It was not and indeed cannot be di....
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.... discipline, we follow the decision given in the above case. Accordingly, the impugned order does not sustain. Hence, the same is set aside. The appeal is allowed." 12.2. In view of the discussion hereinabove and by relying on the decision of the Tribunal in the case of UFO Moviez India Ltd. (supra), we hold that the appellant is required to pay duty on the transaction value and not on RSP. In view thereof, the enhancement of assessable value by the ld. adjudicating authority is found to be incorrect and hence, the same is set aside. Issue (b): Whether adopting freight value at 20% of the FOB value of the goods is justified or not. 13. We find that in the present case, the appellant has paid freight charges on actual basis and thus, the enhancement of freight value by adopting the same at 20% of the FOB value of the goods is not correct. In fact, in terms of Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, if no actual value of freight charges are available, only then and only in that condition can the value of freight be adopted at 20% of the FOB value. Since the actual freight values are available, in such circumstances, the enhanc....