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2021 (10) TMI 341 - AT - CustomsBenefit of concessional rate of SAD - Declaration of RSP - proof of payment of actual VAT on sale after import - High Sea Sales - Notification No. 29/2010-Cus. dated 27.02.2010 - time limitation - import of Ordinary Portland Cement falling under CTH 2523 2910 - HELD THAT - The investigation revealed that the RSP of the cement per 50 kg during the disputed period was above ₹ 190/- and therefore, importer is not eligible to avail the concessional rate of CVD in terms of clause 1A(i) of Notification No. 04/2006-C.E. The letter of the Superintendent of Customs dated 06.09.2011 showed that the importer was not doing any manufacturing activity in the premises although the importer contended that he is engaged in the manufacture of hollow blocks/bricks. Since there is no manufacturing activity, it cannot be said that the cement was captively consumed. For this reason, the importer is not eligible to avail concessional rate of Duty under clause 1C of the Notification No. 04/2006-C.E. as an industrial consumer. The consignments were seized and confiscated under the belief that it was not intended for retail sale and that the appellant-importer did not intend to discharge VAT on the imported goods. Such apprehension of the Department appears to be highly illogical and too premature. At the time of filing the Bills-of-Entry, the Department cannot assume events that are likely to happen later. If the conditions of the Notification are satisfied, the importer has to be given the benefit of the concession / exemption. The only condition stipulated in the Notification No. 29/2010-Cus. is that the RSP has to be declared on the pre-packaged goods, as required under the Standards of Weights and Measures Act/Rules - When the goods were in pre-packaged form and RSP affixed upon them, the condition required in the Notification stands satisfied at that stage of import. The Department cannot assume that the goods are imported with the intention for self-consumption only and proceed to deny the exemption. The main ground for denying the exemption provided under various clauses of the Notification No. 04/2006-C.E. dated 01.03.2006, as amended, is that though the RSP is affixed as ₹ 190 per 50 kg bag on the imported goods, the appellants have sold the cement at a higher price. In paragraph 13 of the impugned order, it is stated that the expenses incurred by the importer in the nature of transportation, liner charges, handling charges, etc., when included in the assessable value, the cement will have to be sold at a higher rate than ₹ 190/-. When RSP is declared on a pre-packaged commodity, the said price is the transaction value, unless there is evidence to show that it is not so. There must be some evidence to show that foreign supplier has received a higher amount. In the present case, the RSP declared is rejected stating that it is sold at a higher rate. In the absence of invoices to show that it was sold by the appellant at higher rate, the Department has proceeded to enhance the value on the basis of invoices of M/s. India Cements Ltd. The invoices of M/s. India Cement Ltd., their ER-I returns, etc., are seen produced by Department - The sale price of M/s. India Cements Ltd. for the cement cleared from the factory cannot be superimposed on the goods imported from another country. In the present case, there is no sale invoice before us. Actually, there is no evidence to conclude that the appellant herein has sold the entire cement imported. Time limitation - HELD THAT - The demand cannot sustain on the ground of limitation. The demand of SAD and CVD on enhanced value cannot sustain. The same are set aside. Consequently, the order of confiscation, levy of redemption fine and penalty cannot sustain and hence, the impugned order is set aside - Appeal allowed.
Issues Involved:
1. Eligibility for Special Additional Duty (SAD) exemption under Notification No. 29/2010-Cus. 2. Eligibility for concessional rate of Countervailing Duty (CVD) under Notification No. 04/2006-C.E. 3. Allegations of mis-declaration of Retail Sale Price (RSP) and evasion of duty. 4. Seizure and confiscation of imported goods. 5. Invocation of extended period of limitation for raising the demand. 6. Imposition of penalties under Sections 112(a) and 114A of the Customs Act, 1962. Detailed Analysis: 1. Eligibility for SAD Exemption: The appellant claimed SAD exemption under Notification No. 29/2010-Cus. The Department denied this exemption on the grounds that the imported cement was intended for self-use without payment of VAT. The Tribunal noted that the Notification does not require actual payment of VAT at the time of import. It was held that the Department's assumption that the goods were not intended for retail sale was illogical and premature. The only condition in the Notification was the declaration of RSP on pre-packaged goods, which the appellant had complied with. 2. Eligibility for Concessional Rate of CVD: The appellant claimed concessional rates of CVD under various clauses of Notification No. 04/2006-C.E. The Department denied these claims, alleging that the RSP declared was lower than the actual sale price. The Tribunal found no evidence to prove that the appellant sold the cement at a higher price than the declared RSP of ?190 per 50 kg bag. The Department's reliance on the sale price of another manufacturer (M/s. India Cements Ltd.) to enhance the value was deemed incorrect. The Tribunal emphasized that RSP includes all charges and should be accepted unless there is evidence to the contrary. 3. Allegations of Mis-Declaration and Evasion of Duty: The Department alleged that the appellant mis-declared the RSP to evade duty. The Tribunal found no evidence to support this claim. The appellant's declaration of RSP was in compliance with the Standards of Weights and Measures Act/Rules. The Department's assumption that the appellant sold the cement at a higher price was based on surmises without any concrete evidence. 4. Seizure and Confiscation of Imported Goods: The imported cement was seized and confiscated on the grounds that it was not intended for retail sale and that the appellant did not intend to pay VAT. The Tribunal held that the seizure was premature and based on incorrect assumptions. The goods were in pre-packaged form with RSP declared, satisfying the conditions of the Notification at the time of import. 5. Invocation of Extended Period of Limitation: The Show Cause Notice was issued invoking the extended period of limitation under Section 28(4) of the Customs Act, 1962. The Tribunal found no evidence of suppression or mis-statement of facts by the appellant to justify the invocation of the extended period. The earlier imports were cleared by the Officers after verification, and there was no self-assessment prior to 08.04.2011. 6. Imposition of Penalties: The Original Authority imposed penalties under Sections 112(a) and 114A of the Customs Act, 1962. The Tribunal set aside these penalties, as the demand for SAD and CVD was found to be unsustainable. The confiscation, levy of redemption fine, and penalties were also set aside. Conclusion: The Tribunal allowed the appeal, setting aside the demands for SAD and CVD on enhanced value, the order of confiscation, and the imposition of penalties. The appellant was granted consequential reliefs as per law. The Tribunal emphasized the need for concrete evidence to support allegations of mis-declaration and evasion of duty, and criticized the Department's reliance on assumptions and surmises.
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