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2016 (9) TMI 319 - AAR - CustomsClaim of exemption from SAD under Section 3(5) of the Customs Tariff Act, 1962 import of pre-packaged goods and sale thereafter - The thrust of submissions made by Revenue is that the conditions contained in Notification No. 21/2012-Cus dated 17.03.2012 are not satisfied in respect of the goods proposed to be imported by the applicant, therefore, goods cannot be exempted from additional duty of Customs (SAD) levied under Section 3 (5) of the Customs Tariff Act. Held that - to get benefit of exemption applicant need to satisfy two conditions of Notification No. 21/2012-Cus. namely declaration of the State of destination where goods are intended to be taken immediately after importation and declaration of His VAT registration No. or Sales Tax registration No. or Central Sales tax registration No., as the case may be in said State the applicant satisfies both the conditions mentioned above. As the pre-packaged commodities in this case are covered by Chapter II of said Rules i.e. provisions applicable to packages intended for retail sale, the same should also satisfy all conditions regarding declarations to be made on every package, as per Rule 6 including sub-rule (e) regarding declaring the RSP of the package. As pre packaged goods to be imported would have declaration of RSP on them, this condition is also met. Applicant is eligible to claim the benefit of exemption from payment of SAD under Notification No. 21/2012-Cus on import of pre-packaged goods.
Issues:
1. Eligibility for exemption from payment of SAD under Notification No. 21/2012-Cus. Analysis: Eligibility for Exemption from SAD: The case involved the question of whether the applicant, a private limited company registered in India, was eligible to avail the benefit of exemption from payment of Special Additional Duty (SAD) provided under Notification No. 21/2012-Cus. The applicant intended to import refrigeration and food service products for sale in India through various channels. The Revenue contended that the conditions of the notification were not satisfied by the goods proposed to be imported. Conditions for Exemption: Notification No. 21/2012-Cus exempts pre-packaged goods intended for retail sale from SAD if certain conditions are met, including the declaration of retail sale price (RSP) on the package. The applicant stated that it already possessed the VAT registration number and would declare the state of destination at the time of importation, fulfilling the procedural conditions. Substantive conditions required the goods to be pre-packaged, intended for retail sale, and to declare the RSP as mandated by the Legal Metrology Act or relevant rules. Pre-Packaged Goods and Intended for Retail Sale: The applicant planned to import pre-packaged goods for sale through various channels, including sales to individual dealers, industrial consumers, and others. The Legal Metrology Act defined pre-packaged commodities as those with predetermined quantities, a fact not disputed. The Legal Metrology (Packaged Commodities) Rules exempted packages intended for industrial or institutional consumers from certain provisions, with specific definitions for these terms. Amendments to these definitions clarified that goods bought directly from manufacturers or importers for industrial or institutional use were not intended for retail sale. Declaration of RSP: The applicant argued that due to the uncertainty of the end consumer at the time of importation, the goods might be sold to retail consumers, necessitating the affixation of MRP on the packages. Citing a relevant case law, the applicant contended that even supplies to institutional buyers required MRP declarations. The Tribunal and the Supreme Court had upheld this view, emphasizing the need for RSP declarations on all packages intended for retail sale. Conclusion: Considering the fulfillment of all conditions under Notification No. 21/2012-Cus, the ruling concluded that the applicant was eligible to claim the exemption from payment of SAD on the import of pre-packaged goods. The judgment offered a detailed analysis of the legal provisions, definitions, and precedents to support the ruling in favor of the applicant.
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