2014 (2) TMI 407 - AT - Customs

Levy of CVD on MRP basis - Import of Molded Case Circuit Breakers and Plugs and Sockets - Confiscation of goods - Demand of differential duty - Imposition of penalty u/s 114A and 112 - Held that - Admittedly the imported plugs and sockets were imported in bulk packing - department could not show that the factors, as per decision of Apex Court in Jayanti Food Processing (P) Ltd 2007 (8) TMI 3 - Supreme Court , are applicable to imported plugs and sockets. Therefore the learned Commissioner s order regarding the assessment for the purpose of CVD in case of plugs and sockets is not sustainable and hence set aside - MCCBs imported by the Appellants are not commodities in packaged form and the packing is meant only for the purpose of ease of transportation. From the capacity rating of the MCCBs also it is revealed the MCCBs are not intended for retail sale. The persons on whose statements the department relied upon in the cross-examination/re-examination they stated that the MCCBs were not sold by them in retail - Decided in favour of assessee.

Issues Involved:
1. Liability of additional duty of Customs (CVD) under MRP-based valuation for imported plugs, sockets, and MCCBs.
2. Assessment of goods under Section 4A of the Central Excise Act.
3. Validity of penalties imposed under Sections 114A and 112 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Liability of Additional Duty of Customs (CVD) under MRP-based Valuation for Imported Plugs, Sockets, and MCCBs:
The appellant imported plugs, sockets, and MCCBs in bulk packing, which were not intended for retail sale. The department argued that these goods should be assessed based on MRP under Section 4A of the Central Excise Act. However, the appellant contended that the goods were for industrial use and not retail, thus not liable for MRP-based valuation. The Tribunal found that the imported plugs and sockets were indeed in bulk packing and not intended for retail sale, and the department could not rebut this. Therefore, the Tribunal set aside the Commissioner's order regarding the assessment for CVD on plugs and sockets.

2. Assessment of Goods under Section 4A of the Central Excise Act:
The Tribunal referred to the factors outlined by the Hon'ble Apex Court in Jayanti Food Processing (P) Ltd. Vs. Commissioner of Central Excise, Rajasthan, which must be met for goods to be assessed under Section 4A:
- The goods should be excisable.
- They should be sold in a package.
- There should be a requirement to declare the retail price on the package under any law.
- The Central Government must have specified such goods by notification.
- The valuation should be based on the declared retail sale price on the packages less abatement.

The Tribunal concluded that these factors were not applicable to the imported plugs and sockets, thus, the goods should not be assessed under Section 4A for CVD purposes.

3. Validity of Penalties Imposed under Sections 114A and 112 of the Customs Act, 1962:
The appellant argued that the MCCBs were not sold in retail and were intended for industrial use, supported by declarations on the packages and statements from dealers. The Tribunal noted that the MCCBs were not in packaged form for retail sale and were used for industrial purposes. The department could not provide evidence to prove retail sale of MCCBs. The Tribunal also agreed with the appellant that the declaration made in the warehouse before market sale complied with the law, supporting the claim for exemption under erstwhile Rule 34 of the PC Rules. Consequently, the penalties imposed under Sections 114A and 112 were found to be unsustainable.

Conclusion:
The Tribunal dismissed the impugned orders, allowing the appeals. The decision emphasized that the imported goods were not liable for MRP-based valuation under Section 4A, and the penalties imposed were not justified. The Tribunal's findings were based on the lack of evidence for retail sale and compliance with legal requirements for industrial use declarations.

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