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TMI Blog2018 (7) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... or consignment of electron goods imported by them on 22.10.2005. The containers in question were opened, goods verified and found to be as per the declared description and quantity. The dispute in the present appeals relate to CVD duty paid by the appellants. 3. Section 3 (1) of the Customs Tariff Act, 1975 provides for levy of additional duty (CVD) equal to central excise duty. Proviso to Sub-section (2) to Section 3 of the Customs Tariff Act, 1975 lays down that in case of an article imported into India, in relation to which it is required/ under the provisions of the Standards of weights and Measures Act, 1976 or the rules made there under or any other law for the time being in force to declare on packages there of the retail sale price of such articles and in which article/class or description of article is notified under Section 4A of the Central Excise Act, 1944, the value of the imported article (for calculating Additional duties of Customs -CVD) shall be deemed to be retail sale price declared on the imported article less such amount of abatement, if any, from such retail price as the Central Govt allows in respect of such like article under Section 4A (2) of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containers including the declaration or alteration of retail sale price on it renders the process as amountingto manufacture. In as much as in terms of the provisions of Section 2 (f) (iii) of the Central Excise Act, the goods specified in the 3 rd Schedule of the Central Excise Act, labelling, relabelling including the alteration of RSP has been specified as an activity amounting to manufacture under central excise law and therefore shall attract the levy of central excise duty under Section 3 of the Act. In as much as their goods fall under Chapter heading 8521 which are notified in the 3 rd Schedule, the activity of altering of RSP shall amount to manufacture, in which case there cannot be any allegation of alteration of RSP on the imported goods and the consequent mis-declaration of RSP under the Customs Act, so as to make them liable to differential duty of CVD. Accordingly, they have contested that there could only be a demand of central excise duty in as much as the activity undertaken by them constituted a deemed manufacture under Section 2 (f) (iii) of the Act. As the duty raised against them is duty of customs, which is not payable by them, they prayed for vacating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of customs duty. 6.5 They have contested the allegation of change of RSP, which is primarily and solely based upon the statements recorded under Section 108 of the Act, without there being any corroborating circumstances that the same was actually changed. Relying upon various decisions, they submitted that the statements made to customs authorities needs careful scrutiny as to whether it was voluntarily made and the Court must also consider the possibility of coercion or inducement. The appellant contended that the statements were not retracted by deponents only due to fear and eminent backlash by the investigators and the lurking fear of the unknown is evident from the fact that they were forced to cough up ₹ 10,00,000/- towards duty liability, even before the finalization of the goods. The confessions, if at all are required to be compared with the rest of evidence on record as held by the Hon'ble Supreme Court in the case of Sarwan Singh Vs. State of Punjab - AIR 457 - SC-637. Similarly reliance was made upon the Hon ble Supreme Court decision in the case of Mohavir Viswas Vs. State of Bengal 1995 (2) SC 25 as also upon the decision in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to which it is required under the provisions of the Standards of weights and Measures Act, 1965 or Rules made thereunder or under any law for the time being in force, to declare on the packages thereon the retail sale price of such goods, to which the provisions of Sub-section 2 shall apply. Sub-section 2 of Section 4A refers to specified goods under Sub-section (i) and provides that the same would be chargeable to duty of excise on the value which shall be deemed to be the retail sale price DECLARED on such goods less such amount of abatement. As such, it becomes clear that MRP, for the purpose of being adopted as assessable value, is required to be actually declared on the goods. The Revenue s entire case is based upon the price list so recovered by them from the importer read with the statements. There is no evidence of the fact that the appellants have actually affixed the imported goods with stickers bearing high MRP. As regards evidentiary value of the statement of Shri Rakesh Dugar and other representatives of distributors of retail shops, it is to be kept in mind that the same are only to the effect that the goods were sold in open market at higher MRP. There is virt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (4) in Section 4A, but had not prescribed the rules how the redetermination has to be done till 1-3-2008. It can be seen from the definition of the word prescribed as enshrined in Section 2(g) of the Act (as reproduced hereinabove) that it is very clearly stated that it can be done only by the rules made under this Act. Closer perusal of Notification No. 13/2008-C.E. (N.T.), dated 1-3-2008 indicated that the said notification was issued in exercise of powers conferred by Section 37 read with sub-section (4) of Section 4A of the Central Excise Act, 1944 (1 of 1944), the Central Government hereby makes the following rules. It can be seen from the above preamble to the Notification No. 13/2008-C.E. (N.T.), Central Government made the rules as applicable for sub-section (4) of Section 4A w.e.f. 1-3-2008. In the cases in hand, for the period prior to 1-3-2008, the entire exercise of the Revenue in redetermining the RSP even if RSP is not in accordance with the law, is faulty and not in accordance with the law, as prescribed manner of redetermination of RSP was brought into statute only from 1-3-2008. We find that once the Central Government has not framed the rules for redeterm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of ABB Ltd. Vs. CC, Bangalore - 2014 (311) ELT 113 (Tri.- Bang.). It stands held that Notification No. 13/2008-CE (NT) issued on 01.03.2008 providing for Central Excise (Determination of Retail Sale price of Excisable Goods) Rules, 2008, providing manner of ascertaining the retail price when the same is not declared, cannot be made applicable retrospectively and the demand for CVD was set aside on the ground that during the relevant period there was no manner prescribed for ascertaining RSP. As such by following the above decisions, on this count, also we find no reasons to uphold the demand. 10. Even if the Revenue's allegations that the goods in question were affixed with stickers of higher MRP are accepted, we note that such allegations by the Revenue would lead to inevitable conclusion that the goods, after clearance from the customs, underwent manufacturing process. The provisions of Rule 2 (f) of the Central Excise Act, as it stood at the relevant time, read as under:- 23.7 In this connection, kind reference is drawn to Section 2 (f) of the Central Excise Act (CEA), which reads as under:- (f) 'manufacture' includes any process:- (i) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-labelling the goods with higher MRP/ is not a manufacturing process, commonly known in the trade and it is only the deeming manufacturing process, which stands conferred by the legislation in terms of Section 2 (f) (iii) of the CEA, 4A. The same should not be adopted for holding that no differential CVD is liable to be confirmed against the assessee. 12. We find no merits in the above argument of the Ld. AR. Presuming a situation where the goods are imported and subsequently manufactured by undertaking a manufacturing process, the final product emerging out of the said activity would admittedly be a different product than the one from where the manufacturing process was started. If the final product, may be involving a simple procedure of manufacture, is different than the one imported by the assessee, the MRP affixed on such manufactured and excisable products cannot be adopted for confirmation of differential CVD, if the CVD has already been paid on the declared MRP at the time of import of goods. In such a situation, there would be no dispute. Merely because in the present case, detailed and elaborated manufacturing process has not been undertaken by the importer, but keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the case. The above activities clearly amount to manufacture as per the definition given under Section 2(f)(iii) of the Central Excise Act. Therefore, the appellants are liable to discharge excise duty on the said products, notwithstanding the fact they might have paid additional duty of customs (CVD) at the time of their importation. As is seen from above, the activity of changing of MRP stickers has been held by the Tribunal as amounting to manufacture, as per the definition given under Section 2 (f) (iii) of the Central Excise Act and the appellants therein have been held liable to pay excise duty. Reference can also be made to the Tribunal decision in the case of Acme Ceramics (supra), wherein while dealing with the issue of alteration of RSP, the Tribunal observed that the person who has altered the RSP on the goods is the person who can be held as manufacturer on alteration of RSP; as the definition of manufacture in Section 2 (f) of the Act specifically talks about the process of declaration or alteration of RSP on the product which are covered under the provisions of Section 4A of the Act would be considered as manufactured product. The identical issue is involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WADHWA) Member (Judicial) Per: Raju 17. I have gone through the case records. I am unable to agree with my learned Sister for the reasons elaborated below. 17.1 The facts are simple. The appellants had printed an MRP much less than the actual MRP prevalent at the time of import. The issue which needs determination is if, in these circumstances when the MRP is wrongly declared to the custom, the CVD can be demanded based on the actual MRP prevalent at that time. 17.2 The MRP based valuation for the purpose of CVD is applied by virtue of Proviso to subsection 3(2) of the Customs Tariff Act 1975. The law in this regard reads as under Provided that in case of an article imported into India, - (a) in relation to which it is required, under the provisions of the [Legal Metrology Act, 2009 (1 of 2010)] or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such article; and (b) where the like article produced or manufactured in India, or in case where such like article is not so produced or manufactured, then, the class or description of articles to which the imported article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n prices of the goods at the time of actual sale, as such the MRP mentioned on the items for sale is always at higher side so that the retailers can indicate reduction in the retail prices at the time of actual sale; that apart from this, the big stores such as M/s D-Mart, M/s Vijay Sales, M/s India Times etc offer free goods along with the said items; that as the price list issued by them was basically prepared to achieve market by following the requirements of the retailers, they did not declare the prices appearing there on for custom purpose but followed the above detailed procedure for assessment. 17.3 It is apparent that the RSP was -mis-declared to Customs for the purpose of evading duty. The data in the para 12 of the impugned order indicates that the RSP declared was even below the whole sale price at which such goods were sold. The following data appearing in the impugned order at para 12 is relied for the purpose 12. The invoices raised by M/s Mitashi Edutainment Pvt. Ltd. from April, 2005 to October, 2005 were scrutinized and the extract there of was submitted by them vide leter dated 16.3.2006. The scrutiny indicated that the following sale by them were at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red RSP of ₹ 19901- in B/E no 556028/04.04.05 B/E No. 839156 dt 07.04.05. vii) DVD Player DIVX 999 -- 1 pc to M/s Modern Enterprises @ ₹ 3547/-. -- 14 pcs to M/s Ashar Mkt. @ ₹ 3547/- -- 10 pcs to M/s Mario World @ ₹ 3458/- -- 35 pcs to M/s Navin Mkt. @ ₹ 3125 As against declared RSP of ₹ 20901- in B/E no 566736 ₹ 1890/- in B/E No. 995598 dated 10.10.2005. It is apparent from the above evidence that the RSP has not changed after import but the same was misdeclared at the time of import. The fact was admitted in the statement by Sh R D Dugan 17.4 The defence of the appellants is that the RSP was inflated after import to attract the customers by offering discounts over RSP. This is incorrect statement in view of the evidence that in cases listed in para 12 of the impugned order the2 RSP declared by them at the time of import was below even the whole sale price to dealers. The appellants are seeking to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as observed in Ram Preeti Yadav's case (supra). 17. In Lazarus Estate Ltd. v. Beasley (1956) 1 QB 702, Lord Denning observed at pages 712 713, No judgment of a Court, no order of a Minister can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. In the same judgment Lord Parker LJ observed that fraud vitiates all transactions known to the law of however high a degree of solemnity, (page 722).' In the instant case, knowing fully well and with intention to defraud, the RSP of the imported goods at the time of import was misdeclared and extremely low RSP, even lower that the whole sale price, was declared to avoid payment of CVD at the correct Assessable Value, From the facts of the case it is apparent that it is a case of fraudulent Mis declaration of RSP and not a case of mere change of RSP after clearance. 18 In these circumstances the provisions of the Customs Act can be invoked to demand CVD short paid. This action is independent of the possibility of invoking the provisions of the Central Excise to demand duty of as deemed manufacture. Consequently the demand of duty and interest is confirmed 19 The impugned order calculate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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