2022 (7) TMI 664 - AT - Customs

Valuation - payment of CVD on MRP basis - Demand of differential duty of customs for the extended period of limitation, along with imposition of penalty - allegation is that the appellant should have paid the customs duty based on the MRP, whereas the appellant have paid the customs duty on the transaction value - there was no MRP affixed on the goods imported and sold by the appellants - intent to evade tax, present or not - HELD THAT - The only allegation in the show cause notice for invocation or extended period of limitation is that, the appellant have filed two Bills of Entry dated 06/10/2009 and 05/01/2010 wherein they have suo moto declared the RSP of the goods for the purpose of calculation of CVD at the time of import. It was further observed that prior to this, the appellant had not declared the RSP with intent to evade the Customs duty. Thus, the appellant have intentionally hidden the fact to evade the requisite duty on the CVD component. It is mentioned in the Show-Cause Notice that investigation was started by the department only after declaration of MRP/RSP suo moto by the appellant in the Bill of Entry filed in October, 2009 and subsequent Bills of Entry. The statement of the proprietor was recorded under Section 108 on 08/12/2009 wherein, he inter alia stated that although they are importing from the year 2004 they have never declared RSP or MRP at the time of import. It was only after they came to know about Notification No. 49/2008-CE as amended by Notification No. 18/2009-CE, they have understood the requirement to declare MRP/RSP and accordingly they have started declaring - no case has been made of by the revenue that the appellant, in spite of having knowledge of such compliance towards MRP, have deliberately not declared. The extended period of limitation is not invocable in the facts and circumstances. Thus, the demand shall be limited to the normal period of limitation, which is six months starting from the date of the Show-Cause Notice. The penalty imposed under Section 114A is also set aside. Appeal allowed.

Summary

Issues Involved:
- Differential duty of customs based on MRP vs. transaction value
- Extended period of limitation for duty demand and penalty imposition

Issue 1: Differential duty of customs based on MRP vs. transaction value

The appellant, a regular importer of CNG/LPG kits, imported goods based on transaction value but later started declaring value based on MRP/RSP after being informed of relevant notifications. The Revenue initiated an inquiry, alleging that customs duty should have been paid based on MRP/RSP. The appellant's proprietor and CHA provided statements explaining their import and sales processes. The CHA stated that CVD should have been calculated on MRP for CNG/LPG kits. The Revenue estimated MRP based on invoices and demanded differential duty for multiple bills of entry. The issue was adjudicated, and duty demand along with penalties were confirmed. The Tribunal previously remanded the matter for re-examination of the extended period of limitation. The Adjudicating Authority upheld the demand, observing the appellant's obligation to declare RSP and imposition of penalty under Section 114A. The Commissioner (Appeals) upheld the decision, leading to the present appeal.

Issue 2: Extended period of limitation for duty demand and penalty imposition

The Adjudicating Authority justified the extended period of limitation, citing the appellant's failure to declare RSP as mis-declaration and intentional evasion of duty. The Authority noted the appellant's prior declaration of MRP in some bills of entry before the investigation. The Commissioner (Appeals) dismissed the appeal, agreeing with the Authority's findings. However, the Tribunal found that the extended period of limitation was not applicable as the appellant started declaring RSP after learning of the requirement through notifications. The Tribunal held that the appellant did not deliberately evade duty and set aside the penalty imposed under Section 114A. The appeal was allowed, providing consequential relief.

This comprehensive analysis of the judgment delves into the issues of differential duty based on MRP vs. transaction value and the extended period of limitation for duty demand and penalty imposition, highlighting the legal arguments, findings, and conclusions reached by the Tribunal.