2016 (1) TMI 553 - AT - Customs

Misdeclaration of Retail Sale Price (R.S.P) in order to avoid payment of actual Customs duty / CVD - valuation of import of cellular phones - Since the goods are packaged commodity, in terms of Section 3 (2) of Customs Tariff Act read with Section 4A of Central Excise Act, on importation of the said goods these are liable to be affixed with M.R.P and assessed accordingly for determining the CVD, after allowing abatement as per the notification issued under Section 4A of Central Excise Act. Held that - It is peculiar case where there is no valuation dispute on the price paid or payable on the imported goods for determining transaction value under Section 14 but the revenue has only disputed RSP declared on the imported goods. When the Customs authorities disputed the RSP declared by the appellants, the adjudicating authority assumed the role of Central Excise authority and any redetermination of RSP has to be strictly in accordance with Section 4A of Central Excise Act read with RSP Rules 2008 and SWM Act. The entire proceedings of redetermining the R.S.P. on the imported goods carried out by the Customs is purely based on the contemporaneous RSP noticed as per the NIDB data and stray market enquiry of other cell phones importers. - adjudicating authority in his findings at para-33 held that he is not concerned on what price the importer have ultimately sold their goods in retail but concerned only with correct R.S.P and alleged that appellants have not declared the correct R.S.P. Once the adjudicating authority disputes the R.S.P, the burden is on the Revenue to establish at what price such goods were sold by the appellants to the ultimate consumer. We find voluminous records were submitted by the appellant before the adjudicating authority in support of retail sale price of their goods. We direct the adjudicating authority to verify the details of R.S.P of the imported goods cleared by the appellants and see whether the appellants have sold the goods as per the declared RSP or whether they have altered the RSP or sold it at higher price than what was declared on RSP of such goods and also to verify whether any flow back received for the retail supplier and determine the R.S.P strictly in accordance with Section 4A read with Rule 4 of RSP Rules 2008 read with SWM Act. We hold that no contemporaneous RSP is applicable under Section 4A. The present remand is only for limited purpose as indicated above. If the adjudicating authority is not able to establish any of the conditions specified in Section 4A/RSP Rules then the declared RSP shall be accepted. Matter remanded back - Decided partly in favor of assessee.

Issues Involved:
1. Misdeclaration of Retail Sale Price (R.S.P)
2. Confiscation of goods
3. Imposition of penalties
4. Demand for differential duties
5. Release of detained goods

Detailed Analysis:

1. Misdeclaration of Retail Sale Price (R.S.P):
The primary issue in this case revolves around the alleged misdeclaration of the Retail Sale Price (R.S.P) by the appellants, M/s. Bluemax Impex (India) Pvt. Ltd., on imported cellular phones. The adjudicating authority rejected the declared R.S.P based on the contemporaneous R.S.P of similar models from the National Import Database (NIDB) data, leading to a higher R.S.P determination under Rule 4 of the RSP Rules read with Section 3(2) of the Customs Tariff Act. The appellants argued that their declared R.S.P was consistent with previous imports and sales, and the department failed to provide concrete evidence of higher retail prices. The tribunal emphasized that any redetermination of R.S.P must strictly adhere to Section 4A of the Central Excise Act and the RSP Rules, which were not followed in this case. The tribunal concluded that the declared R.S.P should be accepted unless proven otherwise by the department.

2. Confiscation of Goods:
The adjudicating authority ordered the confiscation of 1,76,930 mobile phones valued at Rs. 17,22,17,186/- under eight live Bills of Entry and goods valued at Rs. 13,24,73,608/- under six past Bills of Entry. The tribunal noted that the confiscation was based on the alleged misdeclaration of R.S.P and excess or undeclared quantities. The tribunal directed the adjudicating authority to re-examine the confiscation orders after redetermining the R.S.P as per the statutory provisions.

3. Imposition of Penalties:
Penalties were imposed on the appellant company under Section 114A of the Customs Act and on the Managing Director under Section 112(a). The tribunal highlighted that penalties under Section 114A are contingent upon the redetermination of R.S.P. The tribunal remanded the matter for a fresh determination of R.S.P, which would also impact the imposition of penalties.

4. Demand for Differential Duties:
The adjudicating authority confirmed the differential duty of Rs. 39,49,795/- on imports covered under eight Bills of Entry and Rs. 31,19,432/- on past clearances. The tribunal stated that the differential duty demand is directly related to the redetermination of R.S.P. Therefore, the tribunal remanded the matter for a re-evaluation of the differential duty based on the correct R.S.P determination.

5. Release of Detained Goods:
The appellants sought the release of two containers still in Customs custody, arguing that they had already deposited significant amounts towards duty liabilities. The tribunal directed the adjudicating authority to release the goods upon the appellants' deposit of an additional Rs. 10,00,000/-, given that the appellants had already deposited substantial amounts, including Rs. 32,20,377/- and Rs. 22 lakhs encashed from their bank guarantee.

Conclusion:
The tribunal allowed the appeals by way of remand, directing the adjudicating authority to redetermine the R.S.P strictly in accordance with Section 4A of the Central Excise Act, the RSP Rules, and the Standards of Weights and Measures (SWM) Act. The adjudicating authority was instructed to complete the de novo proceedings within three months, considering all relevant documents provided by the appellants. The tribunal emphasized that the declared R.S.P should be accepted unless the department provides concrete evidence of tampering or higher retail prices.

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