2009 (6) TMI 225 - AT - Central Excise

MRP bases valuation - We find that there is no dispute that the goods are not pre-packed commodities. They are in loose packing. This factual position is not disputed by the Revenue. However, the Revenue seeks application of MRP-based assessment on the ground that the goods after import would be packed in retail packing prior to clearance. This submission is not tenable for the reasons that the goods as presented at the time of import were packed in loose condition and were not pre-packed commodities at the time of import. We, therefore, agree with the Commissioner (Appeals) that the MRP-based assessment does not arise.

Summary

Issues:
1. Application of MRP-based assessment on imported goods not in retail packing.

Analysis:
The case involved a dispute regarding the application of MRP-based assessment on imported goods that were not in retail packing. The respondents had imported 47 different items declared as spare parts for electric scooters from China, which were found to be in loose packing in cartons, not in retail packing. The Assistant Commissioner of Customs had ordered the determination of the RSP of the goods at 200% of the imported value and directed the importers to amend the bill of entry to indicate all items separately for assessment. On appeal, the Commissioner (Appeals) held that Section 4A of the Central Excise Act was not applicable as the goods were not pre-packed commodities intended for retail sale. The Commissioner relied on a DGFT circular clarifying that labelling requirements apply only to pre-packed commodities for retail sale, not goods in loose packing. The Commissioner rejected the MRP-based assessment, leading to the Revenue's appeal.

The Appellate Tribunal noted that there was no dispute that the imported goods were not pre-packed commodities but in loose packing. The Revenue argued for MRP-based assessment, contending that the goods would be packed in retail packing before clearance. However, the Tribunal found this argument untenable, emphasizing that the goods were in loose condition at the time of import and not pre-packed commodities. Therefore, the Tribunal agreed with the Commissioner (Appeals) that MRP-based assessment was not applicable in this case. As a result, the impugned order was upheld, and the Revenue's appeal was rejected. The Tribunal dismissed the Revenue's prayer for a stay of the impugned order and proceeded to hear and decide the appeal due to the narrow compass of the issue in dispute.

In conclusion, the Tribunal's decision clarified that MRP-based assessment does not apply to imported goods not in retail packing, even if they may be packed in retail packing later. The judgment relied on the factual position of the goods being in loose packing at the time of import and not meeting the criteria of pre-packed commodities intended for retail sale. The decision upheld the Commissioner (Appeals)'s ruling and rejected the Revenue's appeal, providing clarity on the application of MRP-based assessment in such cases.