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TMI Blog2023 (7) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... AT / ST / CST. This means that the importer is normally liable to pay SAD at the time of import; when such goods imported are subsequently sold locally on payment of applicable VAT / ST / CST, the whole of the SAD that was levied on such imported goods could be claimed as refund by the importer. This is the scheme incorporated in Notification No. 102/2007-Cus. dated 14.09.2007, which was intended to provide a level playing field to importers/traders who clear goods against payment of SAD vis- -vis manufacturers, who did not pay SAD while manufacturing the goods domestically and thereby to remove the burden of double taxation on such importers. The above Notification underwent subsequent amendments. Extended period of limitation - HELD THAT:- By virtue of the above counterbalancing act, there is no loss to the exchequer and therefore, the issue is clearly revenue neutral. This will definitely have a bearing on the allegations as to suppression of facts, etc., for invoking the extended period of limitation - Hence, it is not only on the issue of revenue neutrality, but also on the point of invocation of extended period of limitation, apart from merits, that the Revenue has to fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remarket the products, for which even the respondent-assessee did not have authorization. 1.4 It appears that the DRI recorded statements from various persons of the respondent-company and it appears that there was also a search in the business premises of the respondent, wherein apparently, laptops of key persons and e-mails were recovered. 1.5 As an offshoot of the above investigation, search and statements recorded, it further appeared to the Revenue that the goods imported by the respondent were not considered to be a pre-packaged commodity in terms of the provisions of the Legal Metrology Act ('LMA' for short), 2009, the goods could not be considered to be meant for retail sale and hence, it was doubted by the Revenue that the respondent did not satisfy the essential conditions of Notification No. 21/2012-Cus. ibid.; the Bills-of-Entry were filed by claiming the above goods to be intended for retail sale, under self-assessment, though it was obligatory for them to declare all particulars. 1.6 It was further assumed by the Revenue that, by the above, the respondent had conveniently suppressed that the goods were not intended for retail sale, thereby misleadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had also submitted declarations in the prescribed forms, as prescribed under the Notification, thereby complying with the provisions of the LMA and the Rules made thereunder. They had complied with the conditions stipulated in the SAD exemption Notification ibid. They had demonstrated that the goods imported were pre-packaged goods. The pre-packaged goods imported were intended for retail sale and they declared on the package the Retail Sale Price (RSP), as required under the LMA, 2009 and the Rules made thereunder or any other law for the time being in force. In any case, the entire issue relating to the availment of SAD benefit is revenue neutral for the reason that the products were sold upon payment of applicable VAT in all the cases wherever they had availed SAD exemption. The details of VAT payments were also submitted for reference. Without prejudice to the above, the proposed demand was clearly time-barred and on a mere allegation of suppression and misleading the Department. They had truthfully declared the correct and complete material parameters of the imported goods and in many instances, such goods were physically examined by the proper officer of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on any subsequent sale (retail or otherwise), only when the 4% SAD was paid at the time of import of the said goods. (vii) The option of not paying the SAD at the time of import was applicable only to goods intended for retail sale under the Notification No. 21/2012-Cus. dated 17.03.2013 (Sl. No. 2). (viii) When the goods are not meant for retail sale, they are not eligible for claiming the SAD exemption. (ix) Since the respondent had not paid the SAD on the goods at the time of import, it was never eligible for claiming the refund and hence, there was no question about the revenue neutrality of the matter as presented by the respondent. (x) By referring to the issue of revenue neutrality, the respondent admits that they were liable to pay the 4% SAD on the imported goods which were not intended for retail sale. 7.2 He would thus request for setting aside the impugned Order-in-Original. 8. Per contra, the contentions of the Ld. Advocate made during the course of hearing are summarized as below: - (a) The goods were imported in pre-packaged condition as per Section 2(l) of the LMA, 2009 and the imported goods were intended for retail sale in the domestic market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. No. Chapter, heading, sub-heading or tariff item of the First Schedule Description of goods Standard rate (1) (2) (3) (4) 1 .. .. .. 2 Any Chapter All pre-packaged goods intended for retail sale 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 Nil . 12. From the above, it appears to us that in order to avail the benefit of the above Notification, essentially the importer is required to satisfy the following conditions: - (i) The goods sought to be imported must be pre-packaged goods . The term pre-packaged commodity is defined under the LMA, 2009. Section 2(l) of the LMA defines pre-packaged commodity to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) Each of the packages imported contained only one unit quantity of the specified model of specific configuration and the quantity has been declared accordingly in the MRP label. b) In respect of most Bills-of-Entry, the goods were in fact examined by the proper officer of Customs, who certified that the goods were in pre-packaged condition. Accordingly, we find that the respondent has satisfied the first condition of the Notification. c) The importer sold the goods locally as such in the pre-packaged condition to their channel partners / distributors / re-sellers. d) All the retail sales were effected by them as well as by their channel partners by way of appropriate local sale invoices and on payment of applicable VAT/CST/ST. Accordingly, the second condition of the Notification also stands satisfied by the respondent. e) They did not claim any refund of 4% SAD in terms of Notification No. 107/2007 in the cases where the exemption was claimed under Notification No. 29/2012-Cus. f) Wherever they imported goods and supplied the same locally on account of warranty replacement , they had discharged 4% SAD liability without claiming any exemption / refund since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not find any disputes to the above factual position taken out either in the grounds-of-appeal before us or even in the impugned Order-in-Original, except as per paragraph 13 of this order, and therefore, we have to hold that the importer has satisfied the conditions of Notification No. 21/2012-Cus. ibid. 17.1 We have noticed in the earlier paragraphs of this order that the levy of SAD is to counterbalance the State levies in the form of VAT / ST / CST. This means that the importer is normally liable to pay SAD at the time of import; when such goods imported are subsequently sold locally on payment of applicable VAT / ST / CST, the whole of the SAD that was levied on such imported goods could be claimed as refund by the importer. This is the scheme incorporated in Notification No. 102/2007-Cus. dated 14.09.2007, which was intended to provide a level playing field to importers/traders who clear goods against payment of SAD vis- -vis manufacturers, who did not pay SAD while manufacturing the goods domestically and thereby to remove the burden of double taxation on such importers. The above Notification underwent subsequent amendments. 17.2 Hence, by virtue of the above counte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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