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2023 (6) TMI 551 - AT - CustomsMethod of Valuation for payment of CVD - transaction value or MRP based value - Import of adhesives including Power Bond A1 (adhesive) - Applicability of retail sale price based valuation to the imported adhesives which were classified under CTH 3506 1000 - calculation adopted for the purpose of charging CVD - N/N. 49/2008-C.E.(N.T.) dated 24.12.2008 - whether under Section 4 or Section 4A of the Central Excise Act read with Section 3 of the Customs Tariff Act, 1975? HELD THAT - On a perusal of Sl. No. 43 of the Notification No. 49/2008-C.E.(N.T.), it is seen that the same states Chapter Heading at four-digit level namely, 3506 Col (2) and the description reads Prepared glues and other prepared adhesives, not elsewhere specified or included . A careful reading of the Notification issued under sub-sections (1) and (2) of Section 4A of the Central Excise Act, 1944 makes it clear that it specifies the goods mentioned in Column (3) of the Table therein and falling under Chapter or heading or sub-heading or tariff item of the First Schedule to the Central Excise Tariff Act, 1985 mentioned in the corresponding entry in column (2) of the said Table, as the goods to which the provisions of sub-section (2) of said section 4A shall apply, and allows as abatement the percentage of retail sale price mentioned in the corresponding entry in column (4) of the said Table. The item that is imported is classifiable under CTH 3506 1000, which covers Products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1kg - MRP based valuation is adopted for the purpose of collection of Excise Duty or CVD in respect of imported goods on goods specified under Section 4A of the Central Excise Act, 1944, in relation to goods which are subject to the provisions of the Legal Metrology Act (erstwhile Standards of Weights and Measures Act), where declaring the retail sale price on the package is mandatory. The provisions of the Legal Metrology Act/Standards of Weights and Measures Act or the rules made thereunder are applicable to all the goods, unless exempted, which are put up for retail sale in units / containers / packages. There is no doubt that the items under dispute in the instant appeal are adhesives including Power Bond A1 (adhesive) , put up for retail sale and were having a net weight not exceeding 1 kg. A constructive reading of Chapter Heading 3506 along with the Notification No. 49/2008-C.E.(N.T.) dated 24.12.2008 makes it clear that it covers all prepared glues and other prepared adhesives, not elsewhere specified or included, including products that are suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1kg. To our mind, as the imported goods are classified under CTH 3506 1000, which is not disputed and which covers products put up for retail sale whose net weight does not exceed 1 kg., should be treated as included for the purpose of the impugned Notification No. 49/2008-C.E.(N.T.) dated 24.12.2008 for subjecting the goods to retail sale price based levy - Taking a stand that the prepared glues and other prepared adhesives, not elsewhere specified or included, are included in the said Notification, as given therein, and would not include the same products put up for retail sale whose net weight is not exceeding 1 kg., is not legally correct. There are no reason to differ with the decision of the lower appellate authority on the issue of including the imported adhesives for the purpose of collection of CVD on the basis of retail sale price in terms of Notification No. 49/2008-C.E.(N.T.) dated 24.12.2008 issued under Section 4A of the Central Excise Act, 1944 - the order passed by the lower appellate authority does not call for any interference and the appeal stands dismissed.
Issues Involved:
1. Classification of imported goods under CTH 3506 1000. 2. Applicability of Notification No. 49/2008-C.E.(N.T.) dated 24.12.2008 for the levy of Countervailing Duty (CVD) based on retail sale price. Summary: Issue 1: Classification of Imported Goods Under CTH 3506 1000 M/s. Anabond Limited, Tiruporur, Kancheepuram District, the appellant, imported various items including adhesives classified under CTH 3506 1000. The lower appellate authority confirmed the classification and description of the imported goods but the dispute arose regarding the calculation for charging CVD. Issue 2: Applicability of Notification No. 49/2008-C.E.(N.T.) for Levy of CVD Based on Retail Sale PriceThe appellant contended that the imported adhesive should not attract CVD based on the retail sale price as per Notification No. 49/2008-C.E.(N.T.). The notification specifies "Prepared glues and other prepared adhesives, not elsewhere specified or included" under Chapter Heading 3506 at Sl. No. 43 with an abatement of 35%. The appellant argued that the notification covers only goods described in clause (a) of Chapter Heading 3506 and not those under clause (b) which includes products put up for retail sale not exceeding a net weight of 1kg. The Revenue, represented by Shri R. Rajaraman, Assistant Commissioner, maintained that all goods under Chapter Heading 3506, including adhesives put up for retail sale not exceeding 1kg, are subject to MRP-based levy as per the notification. Upon review, the Tribunal noted that the relevant Chapter Heading 3506 includes both "Prepared glues and other prepared adhesives, not elsewhere specified or included" and "Products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1kg." The Tribunal concluded that the imported adhesives fall under CTH 3506 1000 and are subject to the provisions of Notification No. 49/2008-C.E.(N.T.), thereby attracting CVD based on the retail sale price. The Tribunal dismissed the appeal, upholding the lower appellate authority's decision that the imported adhesives are liable to CVD based on the retail sale price as per the notification. (Order pronounced in the open court on 12.06.2023)
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