2023 (8) TMI 266 - AT - Customs

Method of Valuation for payment of Counter Vailing Duty (CVD) - Section 4 or 4A of CEA? - MRP/RSP was affixed on each package - Educational Institution can be considered as a service industry or not - HELD THAT - The imports having been made in 2012, the new Legal Metrology Act and Packaged Commodities Rules 2011 would apply - From the Rules, it is clear that only when the package is intended for retail sale the provisions of the Chapter for affixing MRP and other details would apply. Further, the definition of institutional consumer has also undergone change. Instead of the words service industry the words used in the new definition of institutional consumer is service institution . The department has not doubted that the import is for sale to the RGKUT. This being so, the sale is not to an ultimate consumer and is only to institutional consumer. The view taken by the Commissioner (Appeals) that the assessment has to be made under normal transaction value under Section 4 is indeed legal and proper. There are no grounds to interfere with the impugned order. The impugned order is sustained - appeal dismissed.

Summary

Issues involved:
The assessment of imported goods under Section 4 or Section 4 A of the Central Excise Act 1944 for payment of Counter Vailing Duty (CVD).

Issue 1 - Assessment under Retail Sale Price (RSP) vs. Transaction Value:
The appeal was filed by the department against the order passed by the Commissioner (Appeals) setting aside the original authority's assessment based on RSP and ordering re-assessment under transaction value for goods imported for supply to an educational institution, resulting in excess duty payment. The appellant argued that goods sold to the University were in pre-packaged form with MRP affixed, thus should be assessed under Section 4 A based on MRP. However, the respondent contended that since the goods were not intended for retail sale but for supply to an educational institution, assessment should be under Section 4 based on transaction value.

Issue 2 - Legal Interpretation of Assessment Criteria:
The department relied on the factors laid down by the Hon'ble Apex Court in the case of Jayanthi Food Processing Ltd. to support the assessment under Section 4 A, emphasizing that the goods were excisable, sold in a package with MRP, and specified by the Central Government. The respondent argued that the new Legal Metrology Act and Packaged Commodities Rules 2011 exempt packages meant for institutional consumers from retail sale provisions, citing relevant definitions and legal precedents supporting assessment based on transaction value under Section 4.

Decision:
The Tribunal upheld the order of the Commissioner (Appeals), ruling that the assessment under transaction value for goods intended for supply to an educational institution was legal and proper. The Tribunal found that the goods were not sold to an ultimate consumer but to an institutional consumer, aligning with the provisions of the Legal Metrology Act and relevant legal interpretations. The appeal was dismissed, affirming the assessment under Section 4 based on transaction value for duty payment.