2013 (11) TMI 547 - AT - Customs

Exemption from levy of CVD on MRP basis - MRP on the lipsticks imported not affixed - Revenue denied exemption the basis that products imported by the appellant namely, 27648 pcs blue aviance slimline lipstics SPF 5 with weight of 2.2.gm/pc are sold not on weight basis but on number basis - Rule 34 of the Standards of Weights and Measures (Packaged Commodity) Rules 1977 - Held that - although the goods are sold in numbers, they are not required to pay duty on MRP as having the weight less than 10 gms per pc. - Following decision of M/s PIDLITE INDUSTRIES LTD VERSUS COMMISSIONER OF CUSTOMS (IMPORT), NHAVA SHEVA 2013 (11) TMI 91 - CESTAT MUMBAI - Decided in favour of assessee.

Summary

Issues:
1. Duty confirmation for not affixing MRP on imported lipsticks.
2. Interpretation of transaction value for CVD on imported goods.
3. Applicability of Standards of Weights and Measures Act, 1976 on imported goods sold by numbers.

Analysis:
1. The appellants challenged an order confirming duty for not affixing Maximum Retail Price (MRP) on lipsticks imported by them. The dispute arose as the authorities required MRP affixation based on the Bill of Entry. The appellants argued that for calculating the CVD on imported goods, the transaction value under Sec. 4A of the Central Excise Act, 1944 should be considered, especially for lipsticks not covered under the Standards of Weights and Measures Act, 1976. However, the lower authorities upheld the duty payment based on MRP, leading to the appeal.

2. The appellants relied on a previous tribunal ruling involving a similar issue with Fevistick/Gluestick importation, where it was held that duty should be paid based on the transaction value of the goods under Section 4, irrespective of the MRP requirement under the Weights and Measures Act. The tribunal found merit in this argument, emphasizing that the weight of the goods, in this case, lipsticks weighing 2.2 gms per piece, falls below the 10 gms threshold per piece, exempting them from MRP obligation.

3. The Revenue, represented by the ld. Addl. Commissioner, contended that since the goods were sold in numbers, the weight was irrelevant, and Rule 34 of the Standards of Weights and Measures (Packaged Commodity) Rules 1977 mandated MRP affixation for goods sold in numbers. However, the tribunal, after hearing both sides and considering the precedent set by the earlier ruling in the case of M/s. Pidilite Industries Ltd., concluded that the duty calculation should be based on transaction value, not MRP, for goods weighing less than 10 gms per piece. Consequently, the tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellants.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, relevant legal provisions, and the tribunal's decision based on precedent and statutory interpretation.