2014 (12) TMI 896 - AT - Customs

Import of goods - Non affixation of RSP - under-declaration of RSP - Revenue is seeking stay since if the order is implemented, the respondent will be eligible to get the TVs released - Held that - Non-affixing of RSP on some of the TVs would not render the goods liable to confiscation since according to Foreign Trade Development Rules, such RSP can be affixed before clearance. This issue was not contested when this was pointed out by us - declaration of RSP is not mandatory and there cannot be contravention of provisions relating to valuation and liable to confiscation under Section 111(m) for misdeclaration of RSP. The law requires value to be declared for the determination of Basic Customs Duty (BCD) and for calculation of Additional Customs Duty (CVD) the value has to be arrived at based on the value declared for BCD. That being the position having accepted the value declared for the purpose of BCD, value for the purpose of RSP separately could not have been determined. This is a highly complicated legal issue and in the absence of any contrary decision and since we find the decision to be logical at this stage, we are not in a position to grant stay on this ground. Since affixing of RSP before the goods reached the landmark of India is not mandatory, confiscation under Section 111(d) also prima facie is not sustainable. Rule 28A of the Rules provided for filing an appeal and seeking stay against pre-deposit of duty demanded and penalty. The rule does not cover appeals filed by the Revenue at all. Since the stay application is not covered by the relevant rules at all, on this ground also the stay application has to be rejected - Stay on release of goods denied. - Decided against the revenue.

Issues:
1. Appeal against impugned order regarding under-declaration of Retail Sale Price (RSP) on imported Samsung TVs.
2. Competence to revise RSP and compliance with Standards of Weights & Measures Rules.
3. Application of Section 111(d) and (m) of the Customs Act.
4. Interpretation of valuation rules for Basic Customs Duty (BCD) and Additional Customs Duty (CVD).
5. Consideration of stay application under Rule 28A of Customs, Central Excise and Service Tax Appellate Tribunal Procedure Rules.

Issue 1:
The appeal was against an order regarding under-declaration of RSP on imported Samsung TVs. The Commissioner's order was detailed, discussing legal grounds. The Commissioner emphasized the importance of RSP compliance for consumer protection and valuation under the Central Excise Act. The Tribunal acknowledged the logical reasoning behind the Commissioner's decision, stating that non-affixing of RSP before clearance did not warrant confiscation. The Tribunal found no fault in the Commissioner's conclusion that RSP declaration is not mandatory and cannot lead to confiscation under Section 111(m) for misdeclaration.

Issue 2:
The Tribunal analyzed the requirement for compliance with Standards of Weights & Measures Rules before Customs clearance. It noted that affixing RSP stickers before clearance was essential, and confiscation was not justified if RSP was affixed later. The Tribunal highlighted that invoking Sections 111(d) and (m) was not valid in this case and explained the legal intricacies surrounding valuation for BCD and CVD. It concluded that the decision to revise RSP was improper and liable to be set aside.

Issue 3:
Regarding the application of Section 111(d) and (m) of the Customs Act, the Tribunal found that confiscation under Section 111(d) was not sustainable due to the absence of a prohibition on imported goods. It further explained that Section 111(m) is applicable for misdeclaration of value in the bill of entry, which was not established in this case. The Tribunal emphasized the acceptance of declared value for BCD calculation and deemed the resort to Section 111(m) unwarranted.

Issue 4:
The Tribunal delved into the interpretation of valuation rules for BCD and CVD. It highlighted the complexities involved in determining value for RSP separately from BCD and concluded that the decision to revise RSP based on Central Excise rules was improper and ultra vires. The Tribunal emphasized that imported goods cannot be treated as excisable goods, and the resort to Central Excise rules for valuation was incorrect.

Issue 5:
The Tribunal addressed the stay application under Rule 28A of Customs, Central Excise and Service Tax Appellate Tribunal Procedure Rules. It explained that the rule pertained to appeals against pre-deposit of duty demanded and penalty, not appeals filed by the Revenue. As the stay application did not fall under the relevant rules, it was rejected. The Tribunal provided a detailed analysis of the rule's requirements and its inapplicability to the Revenue's appeal.

This comprehensive analysis of the judgment covers the issues raised in the appeal against the impugned order related to under-declaration of RSP on imported Samsung TVs, the competence to revise RSP, application of relevant sections of the Customs Act, interpretation of valuation rules, and consideration of the stay application under the applicable rules.

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