2017 (6) TMI 1009 - AT - Customs

Valuation - additional duty of customs - N/N. 49/08-CE (NT) dated 24.12.2008 - The value for additional duty is to be arrived at based on retail sale price of the goods after allowing abatements or otherwise? - Held that - the examination of legal provisions especially the provisions of Section 4 A and the scope of RSP as defined in the said Section as well as the application of the provisions of the Standards of Weighs and Measures (PC) Rules, 1977 have not been done in detail. More specifically for application of the facts of the present case. While the rejection of RSP declared by the appellant is prima-facie supported by the evidences as recorded by the ld. Authority to arrive at the correct RSP, the reasoning has to be recorded - matter requires re-consideration - appeal allowed by way of remand.

Summary

Issues:
Dispute over valuation for additional duty in imported Digital Set Top Boxes and viewing card (STB) based on Notification 49/08-CE (NT) dated 24.12.2008.

Analysis:
The judgment addresses the dispute regarding the value adopted for the imported goods for the purpose of payment of additional duty in terms of Notification 49/08-CE (NT) dated 24.12.2008. The imported goods were subject to additional duty of customs under Section 4 A of Central Excise Act, 1944. The appellants had initially declared the printed retail sale price of &8377; 1,000/- on the boxes, but Customs determined the value for additional duty based on the landed cost of the goods at &8377; 1,832/- after allowing abatement of 20% as per the notification, resulting in an assessable value of &8377; 1,465/-. Subsequently, during a refund claim scrutiny, the Revenue raised objections to the valuation, initiating proceedings against the appellant to demand differential duty based on a higher retail sale price of &8377; 2,100/-. The original authority held the appellant liable for a substantial differential duty amount and imposed a penalty under Section 112 (a) (b) of Customs Act, 1962.

The appellant argued that the valuation for additional duty should be based on the retail sale price (RSP) to the ultimate consumer, not bulk sales to entities like M/s. Dish T.V. They cited a Tribunal decision emphasizing that the RSP minus abatement should be the assessable value under Section 4A, irrespective of transaction prices or discounts. The appellant contended that the actual price to the ultimate consumer was &8377; 961/- only, contrary to the higher price used for valuation by the authorities.

The Revenue, on the other hand, highlighted that the goods were sold to M/s. Dish T.V. at a significantly higher price of &8377; 21,000/- per piece, indicating a substantial profit margin for the appellant. They argued that the printed MRP of &8377; 1,000 was not reflective of the actual transaction values, as evidenced by the subsequent sales chain leading to the retail consumer purchasing at &8377; 961/- per piece. The Revenue contended that the business relationships within the group companies influenced the pricing dynamics and should not lead to undervaluation for duty purposes.

The Tribunal, after examining the facts and legal provisions, found that the valuation issue required detailed analysis in line with Section 4 A and relevant regulations. The Tribunal noted the wide price variations in the sales chain and the unique nature of the transactions involving group companies. They concluded that the printed RSP was questionable, and the correct assessable value needed to be determined afresh by the original authority. The Tribunal allowed the appeal, remanding the matter back to the original authority for a fresh consideration, emphasizing the need for a thorough examination and providing the appellant with an opportunity to present their case adequately.