2018 (6) TMI 940 - AT - Customs

Validity of assssement of Bill of Entry - valuation for the purpose of CVD - industrial consumers/institutional consumers or not? - Appellant has challenged the assessment on the ground that the goods can be assessed on RSP only when they are specified in notification issued under Section 4A (1); and (2) declaration of retail sale price on packages under the Standards of Weight & Measures Act, 1976 or under other law for the time being in force is mandatory which is only in case of retail sale - Held that - Considering the nature and use of goods it cannot be said that the same are intended for retail sale. Therefore the goods has to be assessed on transaction value. The goods in question are sold by the Appellant to the hospital is sale to the institutional customer only - under the rules the importer is person responsible to comply with the Packaged Commodity Rules, 1977. Hence the importer has been treated at par with the manufacturer of goods. In such case for the purpose of levy of CVD the importer shall be responsible as manufacturer and eligible for exemption from complying with the provisions of RSP. The goods imported by the Appellant are liable for duty under Section 4 of CEA, 1944 - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Assessment based on transaction value vs. MRP valuation method
2. Applicability of exemption under SWM (PC) Rule 2A
3. Interpretation of institutional consumers under Rule 2A
4. Eligibility for exemption under Packaged Commodity Rules, 1977

Issue 1: Assessment based on transaction value vs. MRP valuation method
The case involved a dispute regarding the assessment of imported goods by the Appellant based on transaction value versus the assessing officer's basis of MRP valuation method. The assessing officer calculated the assessable value based on the MRP of the goods, which the Appellant contested. The Commissioner (Appeals) upheld the assessment, leading to the Appellant filing an appeal challenging the valuation method.

Issue 2: Applicability of exemption under SWM (PC) Rule 2A
The Tribunal analyzed the exemption under Rule 2A of the Standards of Weight & Measures Act, 1976. The Rule exempts packaged commodities meant for industrial or institutional consumers from certain provisions. The Tribunal determined that the goods imported by the Appellant, intended for hospitals and blood banks, fell under the category of institutional consumers, thereby impacting the applicability of the exemption.

Issue 3: Interpretation of institutional consumers under Rule 2A
The Tribunal delved into the definition of institutional consumers under Rule 2A, which includes consumers who buy packaged commodities directly from manufacturers or packers for service industries like transportation, hotels, or similar services. The Tribunal clarified that sales to hospitals and blood banks qualified as sales to institutional customers, affecting the interpretation of the exemption under the Rule.

Issue 4: Eligibility for exemption under Packaged Commodity Rules, 1977
The Tribunal considered the eligibility of the importer for exemption under the Packaged Commodity Rules, 1977. It determined that the importer, responsible for complying with the rules, should be treated on par with the manufacturer. As a result, the importer was deemed eligible for exemption from complying with the provisions of the RSP, leading to a decision to set aside the impugned order and allow the appeal with consequential reliefs.

In conclusion, the Tribunal's judgment addressed the assessment methodology, exemption under Rule 2A, interpretation of institutional consumers, and the importer's eligibility for exemption under the Packaged Commodity Rules, 1977. The decision provided clarity on these issues, ultimately favoring the Appellant and setting aside the initial assessment.