PRICE DIFFERENCE FOR GOODS IMPORTED THROUGH DIFFERENT PORTS

[Mr. M. GOVINDARAJAN]

In SHRI RUMEN DEY VERSUS COMMISSIONER OF CUSTOMS (PREV.) SHILLONG - 2023 (7) TMI 70 - CESTAT KOLKATA, the appellant is a power of attorney holder of Asha Enterprise, which is engaged in export and import business in Tripura.  The appellant imported cement in 50 kg. PP woven bags from Bangladesh from the period 17.03.2012 to 31.10.2014 through Muhurighat LCS.  The said product was subject to levy of additional duty of customs on MRP price.  The appellant asked the exporter of Bangladesh to print the MRP on the cement bags. 

The Department issued two show cause notices to the appellant on 05.11.2014.  The show cause notices allege that the appellant has evaded additional duty of customs to the tune of Rs.12113/- and Rs.76,767/- respectively by means of undervaluation.  It was further alleged that another cement manufacturer in Bangladesh was having a higher MRP of Rs.320/-, higher of Rs.50/- than that of the appellant.  The Adjudicating Authority confirmed the demand and imposed equal amount of duty as penalty.  The goods were not confiscated since the same were not available.

The appellant, being aggrieved by the order, filed an appeal against the order of Adjudicating Authority before the Commissioner (Appeals), Guwahati.  The appellant contended that the impugned Bill of Entry duly self assessed were not challenged by the Department.  Therefore the said value has become final.  The Commissioner (Appeals) upheld the order of Adjudicating Authority and dismissed the appeal filed by the appellant on 05.12.2016.

The appellant submitted the following before the Tribunal-

• The different lots of the impugned goods were imported by different importers through different land ports though the goods were manufactured by the same manufacturer in Bangladesh.
• Since the place of importation was different the MRP printed on the goods imported through other ports can be different. 
• The difference price on MRP is natural due to the above said reason.
• Only one MPR was printed on one lot which was independent of the other.
• MRP is decided on the various factors besides landing cost and duty element.
• In the present appeal case the goods were imported through different ports and that is the reason for the difference in MRP.
• There is no evidence to show that the goods imported through different ports under different MRP were sold at the same price.
• The authority has erred in observing different prices printed on different consignments as one and the same. 
• In absence of evidence the allegation of undervaluation for the levy of CVD is unfounded and not tenable in law.
• The Bills of Entry were self assessed.  The same have not been challenged by the Department.
• Therefore it became final.
• Unless the original assessment by the assessing officer is challenged the department cannot demand differential duty subsequently by issuing demand notice.
• In view of the above grounds the impugned order is not sustainable.

The Tribunal heard the submissions of the appellant and also the Department which reiterated the findings in the impugned order.

The issue in the present appeal is surrounded by the undervaluation of cement imported from Bangladesh.  According to the department the alleged MRP of the cement imported by the appellant was much less as compared to the MRP declared from the same manufacturer through the other ports though the same was manufactured by the same manufacturer.  The Tribunal considered the arguments of the appellant that the MRP printed on the goods imported through other ports can be difference as the place of importation was different and therefore the difference in MRP is common.  The Tribunal observed that MRP on same item is decided in consideration of a number of factors besides landing cost and duty element.  The Tribunal also observed that in the present case the goods were imported through different ports.  This may be the reason for the difference in price which is a valid one.  The Department failed to give evidence that the goods so imported through different MRP were being sold at the same price.  Therefore the Tribunal was of the opinion that there was no suppression of the value by the appellant.  Therefore the demand issued by the Department is not sustainable. 

The Tribunal also analyzed the judgment in ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV - 2019 (9) TMI 802 - SUPREME COURT.  In this case the Supreme Court held that the claim for refund cannot be entertained unless the order of assessment or self assessment is modified in accordance with the law by taking recourse to the appropriate proceedings and it would not be within the ken of Section 27 to set aside the order of self assessment or assessment and reassess the duty for making refund.  If any person is aggrieved by any order which would include self assessment he has to get the order modified under Section 128 of the Act or under the relevant provisions of the Act.

The Tribunal observed that the above said case law is squarely applicable to the present case. The Tribunal found that the impugned order passed by the Authority demanding differential duty without challenging the original assessment of the Bills of Entry is not sustainable.

The Tribunal allowed the appeal by setting aside the impugned order.

Discussions to this article

[RAJESH AUDITHYAN]

Dear sir

Many thanks for such insightful article. Post import clearance, the Customs Dept sends pre consultative letters asking importers to pay difference in BCD,IGST ADD etc WITHOUT amending/challenging self assessed BoEs. In such cases will this CESTAT 19th June 23 dated order will be useful as a defence for importers ?? Kindly share your valuable views please

[DR.MARIAPPAN GOVINDARAJAN]

In my view it is applicable.

[RAJESH AUDITHYAN]

Dear sir

Noted thanks