2012 (6) TMI 561 - AT - Customs

CVD demand on the imported goods based on MRP as the goods were imported in 20 kg packing having no MRP declared on the imported package - assessee contested that the goods will not qualify retail packages as defined under PC Rules and since the ultimate consumers of the imported goods are industrial consumers, the imported product is therefore exempt from affixing MRP on the imported packages as per rule 2A of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 - Held that - As per the definition of Manufacturer defined under Rule 2(h) of the PC Rules manufacturer includes any person who or which puts, or causes to be put, any mark on ay packaged commodity, not produced, made or manufactured by him and the mark claims the commodity in the package to be commodity produced, made or manufactured by such persons. The appellants after import of the goods affixed the brand name of Henkel CAC Pvt. Ltd. on the imported package which gives the indication that the product in question may be manufactured by the appellant - as claim of the assessee that the goods in question are being sold by them to the industrial consumers and this fact is verifiable from the records that the burden lies on the appellant to establish before the lower authorities that the provisions of Chapter II of the PC Rules are not applicable to the packaged commodity imported by them - a reasonable opportunity of producing evidence before the original authority to prove claim that they are covered under exemption from MRP based assessment under Rule 2A of PC Rules shold be given - decided in favour of assessee by way of remand.

Summary

Issues:
1. Assessment of imported goods based on MRP
2. Applicability of Standards of Weights and Measures (Packaged Commodities) Rules, 1977
3. Exemption under Rule 2A of the PC Rules for industrial consumers

Issue 1: Assessment of imported goods based on MRP

The appeal involved a dispute regarding the assessment of imported goods by M/s. Henkel CAC Pvt. Ltd. based on the Maximum Retail Price (MRP). The Customs department contended that CVD should be paid on the imported goods as MRP was not declared on the 20 kg packaging. The appellant challenged this assessment before the Commissioner of Customs (Appeals), who upheld the decision. The main contention was whether the goods imported in 20 kg packages should be assessed based on MRP.

Issue 2: Applicability of Standards of Weights and Measures (Packaged Commodities) Rules, 1977

The appellant argued that the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 are applicable only to packages intended for retail sale. They claimed that since the imported Hot Melt Adhesive was sold to industrial consumers and commission agents, it should be exempt from affixing MRP on the packages. The dispute centered around whether the PC Rules applied to the imported packages meant for industrial consumers.

Issue 3: Exemption under Rule 2A of the PC Rules for industrial consumers

The key issue revolved around the interpretation of Rule 2A of the PC Rules, which exempts packaged commodities meant for industrial consumers or institutional consumers from certain provisions. The department argued that the appellant did not qualify as a manufacturer or packer under the rule, thus not entitled to exemption. However, the appellant claimed that they should be considered a manufacturer as they put their brand name on the imported packages, indicating possible manufacturing. The Tribunal decided to remand the matter back to the original authority for the appellant to provide evidence supporting their claim of selling goods to industrial consumers and being eligible for exemption under Rule 2A.

This judgment highlights the importance of proper classification and assessment of imported goods based on MRP, the applicability of PC Rules to packages intended for industrial consumers, and the criteria for exemption under Rule 2A for such consumers. The decision emphasizes the need for evidence and verification to determine eligibility for exemptions under relevant rules and regulations.