2016 (12) TMI 826 - AT - Customs

Demand of CVD on the goods imported by the appellant - applicability of Notification 49/2008-CX, as the goods were in pre-packaged condition in 250 gms., intended for retail sale - Held that - identical issue has been decided in the case of Starlite Components Ltd. vs. CCE, Nashik 2013 (4) TMI 624 - CESTAT, MUMBAI , where it was held that the appellants are importing the impugned goods not for retail sale but for repacking, labelling and branding and selling the same in bulk to M/s. Bajaj Electricals Ltd. Therefore, they are not required to declare MRP in terms of Rule 3 of the said Legal Metrology (Packaged Commodities) Rules, 2011 as they are industrial consumers - impugned order unsustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Demand of CVD on imported goods based on pack size and applicability of Notification No.49/2008-CX.

Analysis:
The appeal challenged an order upholding duty demand, interest, penalty, and goods confiscation. The issue revolved around the demand of CVD on goods imported by the appellant. The appellant imported K Ultra Fine Putty, classified under Chapter Heading No.3214, and paid customs duty and CVD based on the declared value. The Revenue contended that since the goods were in 250 gms. pack size, CVD should be based on the RSP per Notification No.49/2008-CX. The appellant argued they repacked the goods into 500 gms. packs in their factory, thus discharging central excise duty based on MRP. Both lower authorities held Notification 49/2008-CX applicable due to the goods being in pre-packaged 250 gms. size for retail sale.

Upon review, the Tribunal found no evidence contradicting the appellant's claim of repacking and central excise duty discharge based on MRP. Referring to a precedent (Starlite Components Ltd. vs. CCE, Nashik), the Tribunal highlighted that MRP declaration for CVD levy is required only for goods intended for retail sale in retail packages under Legal Metrology Rules. As the appellant repackaged goods for industrial consumers, MRP declaration was unnecessary. The Tribunal ruled in favor of the appellant, setting aside the duty demand, confiscation, and penal consequences under Customs Act. The judgment emphasized that the appellant's activities constituted manufacturing under the Central Excise Act, exempting them from additional duty based on MRP.

In conclusion, the Tribunal deemed the impugned order unsustainable and set it aside, allowing the appeal with any consequential relief. The judgment clarified the legal position on CVD levy concerning goods repackaged for industrial use, emphasizing the exemption from MRP declaration for such transactions.