2008 (7) TMI 770 - AT - Central Excise

Summary

Issues:
Appeals against orders demanding differential duty based on higher selling price of imported electronic goods and imposition of penalties.

Analysis:
The appeals were filed against orders demanding differential duty and imposing penalties after investigations revealed that the appellants sold imported electronic goods at prices higher than declared to Customs. The Revenue claimed that Counterveiling Duty should be based on Maximum Retail Price (MRP) of the goods, leading to the demand for differential duty and imposition of penalties. The main contention raised by the appellants' advocates was that the Standards of Weights & Measures Act (SWM) should not apply to electronic goods, citing a decision by the Madras High Court, which was also followed by other High Courts. They argued that since the SWM Act does not apply to electronic goods like radios, televisions, and amplifiers, there should be no basis for charging Counterveiling Duty based on MRP.

The Departmental Representative argued that Counterveiling Duty should be based on MRP, referring to a Supreme Court decision regarding the applicability of the SWM Act to commodities like refrigerators. The Tribunal carefully considered the issue and found that the Revenue's action was based on charging duty according to retail prices under Section 4A of the Central Excise Act. However, the Madras High Court, along with the Andhra Pradesh and Kerala High Courts, had clearly stated that the SWM Act and Rules do not apply to electronic goods due to their unique characteristics and functions. The Tribunal referenced specific excerpts from the Madras High Court decision, emphasizing that electronic gadgets do not fall under the SWM Act regulations. Therefore, the Tribunal concluded that the demand for duty and penalties was not sustainable based on the High Court decisions, leading to the allowance of all appeals with consequential relief.

In summary, the Tribunal allowed the appeals against the orders demanding differential duty and imposing penalties on the basis of selling imported electronic goods at prices higher than declared. The decision was influenced by the interpretation that the SWM Act does not apply to electronic goods, as established by the Madras High Court and followed by other High Courts, leading to the finding that the duty demand was not justified, thereby nullifying the penalties as well.