2013 (9) TMI 425 - AT - Customs

Clearance of goods without MRP - Import of chocolates, candies, toffees, fruit flavoured jellies and other confectionery items - prior to clearance from the customs the goods should be affixed with the MRP Held that - The stock of the goods which was seized was found to be without MRP stickers - all the dealers to whom the goods were sold had admitted that the goods were being purchased without MRP - The evidence also indicated that the correct MRP was not declared to the customs and the goods were sold at much higher MRP. Waiver of pre deposit in the interest of revenue some amount of pre deposit was ordered to be submitted upon such submission rest of the duty to be stayed till the disposal. - stay granted partly.

Issues:
1. Importer evading additional customs duty by declaring lower MRP to customs.
2. Confiscation of goods imported without affixing MRP labels.
3. Imposition of penalty under Section 112 of the Customs Act, 1962.
4. Requirement of pre-deposit for hearing appeals and stay applications.

Issue 1: Importer evading additional customs duty by declaring lower MRP to customs:
The case involved the importation of various confectionery items by the appellant, where it was alleged that the importer was evading additional customs duty by declaring a lower Maximum Retail Price (MRP) to customs than the actual selling price. The Commissioner of Customs confirmed a duty demand of Rs.4,31,60,709 against the importer, along with interest and penalties. The appellant argued that there was no evidence of goods being cleared without affixing MRP, and that the duty demand was unjustified. However, the Tribunal found evidence that the goods were indeed imported without MRP stickers, and the actual MRP was higher than declared. The Tribunal directed the importer to make an additional pre-deposit of Rs.50 Lakhs for the appeal.

Issue 2: Confiscation of goods imported without affixing MRP labels:
The Commissioner ordered the confiscation of seized goods valued at Rs.72,66,093, as they were found without MRP stickers, indicating a violation of Exim Policy requirements. The appellant contended that the goods were in small packages exempt from MRP rules. The Tribunal noted that while some items might be exempt, the net duty liability was significant. It directed the importer to make an additional pre-deposit to safeguard revenue interests.

Issue 3: Imposition of penalty under Section 112 of the Customs Act, 1962:
Penalties were imposed on the importer and other involved parties under Section 112 of the Customs Act, 1962. The appellant argued against the penalties, stating lack of evidence and knowledge about the actual selling prices post-import. The Tribunal found evidence supporting the penalties and directed the importer to make additional pre-deposits. However, for one party, the requirement of pre-deposit was waived pending further evaluation of evidence during the appeal.

Issue 4: Requirement of pre-deposit for hearing appeals and stay applications:
Both sides presented arguments regarding the necessity of pre-deposits for hearing appeals and stay applications. The Tribunal considered the evidence, finding that additional pre-deposits were required to safeguard revenue interests. It directed the importer to make additional pre-deposits while waiving the requirement for one party pending further evaluation during the appeal process. Compliance deadlines were set for the pre-deposits, and recovery of amounts was stayed until appeal disposal.

This judgment highlights the importance of complying with MRP regulations during importation, the consequences of evading customs duties, and the process of imposing penalties under the Customs Act. The Tribunal's decision emphasizes the need for evidence-based evaluation and pre-deposits to ensure revenue protection during appeal processes.

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