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2018 (4) TMI 923 - AT - CustomsValuation - levy of CVD on the basis of RSP/MRP - leasing of projector - The case of the department is that the leasing of projector is amount to sale in terms of Standards of Weights and Measures Act, 1976 - whether the imported Digital Video Projectors and Decoders given on lease to the Theater Owners for using in display of the movie is liable for CVD on the basis of valuation under Section 4A of the Central Excise Act, 1944? - Held that - the appellant imported Digital Video Set, which can be used only for displaying the movie in the theater. The same is not sold in the retail market. The arrangement of providing the Digital Video Projectors to the Theater owners under Lease Agreement and the lease rental is charged under the agreement. An identical fact is involved in the case of Bharti Telemedia Ltd. 2015 (9) TMI 1196 - CESTAT MUMBAI , where it was held that Set Top Boxes imported as Customer Premises Equipment (CPE) and supplied to customer s premises does not involve the sale and the proprietary in the goods remained with the supplier. In that fact it was held that there is no sale involve, hence the CVD cannot be charged on the basis of RSP/MRP in terms of Section 4A of the Central Excise Act, 1944. CVD cannot be charged - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Liability for Countervailing Duty (CVD) on imported Digital Video Projectors and Decoders given on lease. 2. Determination of valuation basis under Section 4A of the Central Excise Act, 1944. 3. Interpretation of 'Sale' under the Standards of Weights and Measures Act, 1976 and Legal Metrology Act, 2009. 4. Application of precedent from Bharti Telemedia Ltd. case. Issue-Wise Detailed Analysis: 1. Liability for Countervailing Duty (CVD) on imported Digital Video Projectors and Decoders given on lease: The core issue in this case is whether the imported Digital Video Projectors and Decoders, which are given on lease to theater owners, are liable for CVD based on the valuation under Section 4A of the Central Excise Act, 1944. The appellant, M/s UFO Movies India Ltd., imported these items and leased them to theater owners, collecting lease rent. The department contended that leasing the projectors amounts to a sale as per the Standards of Weights and Measures Act, 1976, requiring the declaration of the Retail Sale Price (RSP) on the package and charging CVD based on RSP. 2. Determination of valuation basis under Section 4A of the Central Excise Act, 1944: The appellant argued that the case is similar to Bharti Telemedia Ltd. Vs. Commissioner of Customs (Import), Nhava Sheva, where it was held that Set Top Boxes supplied to customers' premises did not involve a sale, and hence CVD could not be charged based on RSP/MRP. The appellant maintained that since the Digital Video Projectors were provided on a lease basis and ownership remained with the appellant, the transaction did not involve a sale. 3. Interpretation of 'Sale' under the Standards of Weights and Measures Act, 1976 and Legal Metrology Act, 2009: The respondent argued that the definition of 'sale' under the Standards of Weights and Measures Act, 1976, includes transfer of goods on the hire purchase system or any other system, implying that the appellant was legally obligated to declare the RSP and discharge the CVD liability. However, the Tribunal noted that the facts of the present case were similar to those in the Bharti Telemedia Ltd. case, where it was determined that there was no sale involved since the ownership of the goods remained with the supplier. 4. Application of precedent from Bharti Telemedia Ltd. case: The Tribunal relied heavily on the precedent set by the Bharti Telemedia Ltd. case. It was established that for CVD to be levied based on RSP, two conditions must be met: (1) the requirement to declare RSP under the Legal Metrology Act, and (2) the imported goods must be specified in the notification issued under Section 4A(1) of the Central Excise Act. In the present case, the Tribunal found no transfer of property or sale involved in the lease of Digital Video Projectors, similar to the Bharti Telemedia Ltd. case. The Tribunal emphasized that the definition of 'sale' under the Legal Metrology Act should prevail, and since there was no sale, the RSP-based assessment was not warranted. Conclusion: The Tribunal concluded that the facts of the present case were identical to the Bharti Telemedia Ltd. case. Following the judicial discipline, the Tribunal set aside the impugned order and allowed the appeal, ruling that the imported Digital Video Projectors and Decoders given on lease were not liable for CVD on an RSP/MRP basis in terms of Section 4A of the Central Excise Act, 1944. Pronounced in Court on 21.03.2018.
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