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TMI Blog2024 (7) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2 On the basis of such intelligence, the officers of DRI searched the office premises of the appellants and seized certain import documents and files etc., under panchanama dated 03.05.2018. On scrutiny of the seized documents/files, they observed that the appellants had imported 47 consignments of perfumes and deodorants of Rasasi brand of Dubai during the period October' 2013 to November' 2015; that out of those 47 imports, in respect of 44 imports, the appellants had filed the Bills of Entry (B/Es), declaring their products in rupee terms per dozen, instead of declaring the MRP per piece; and that with regard to the remaining 3 B/Es, the appellants had declared the MRP per piece of the product. During the course of investigation, the department had recorded the statements of Shri Abdul Hafiz Reshamwala, Partner of the appellants firm; Shri Rajendra Kumar Tripathy of M/s Chitalia Logistics Pvt. Ltd. and Shri Vidyadhar M. Thatte, country Head of M/s Rasasi Perfumers Pvt. Ltd. under Section 108 of the Customs Act, 1962. 1.3 Based on the seized records and the statements recorded from various persons, the DRI had concluded that Shri Hafiz Reshamwala, partner of the appellant's fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sals made in the SCN, the DRI investigation had provided the following grounds: (i) That a conspiracy was hatched by Shri Abdul Hafiz Reshamwala, Partner of M/s. Goodwill International with their overseas supplier M/s. Al Rasasi International for undervaluing the perfumes and deodorants supplied to them. (ii) On the basis of the understanding between Shri Abdul Hafiz Reshamwala Partner of M/s. Goodwill International with their overseas supplier, M/s. Al Rasasi International issued invoices showing a lesser value than the actual price for the perfumes and deodorants supplied by them to M/s. Goodwill International. (iii) The Invoice issued by M/s. Al Rasasi International bearing No. 388/13/CM dated 08.12.2013 filed along with B.E. No.4269739 dated 06.01.2014 and invoice No.428/14/CM dated 16.12.2014 filed along with B.E. No. 8027305 dated 19.01.2015 showed the actual value of the perfumes and deodorants supplied by them to the appellants M/s. Goodwill International and the MRP for the said products said to have been declared by the supplier in the said two bills of entry was the proper MRP at which M/s. Rasasi Perfumers Pvt. Ltd. had sold in their retail store. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be considered as the 'transaction value' in terms of Section 14 ibid for payment of the Customs duty, which had been properly discharged by the appellants and also accepted by the proper officer at the time of assessment of the B/Es. 2.2 Learned Advocate has strenuously argued that reference made on the B/Es Nos. 4269739 dated 06.01.2014 and 8027305 dated 18.01.2015 in the impugned order to conclude that the value declared therein has to be considered as the proper value for the purpose of duty assessment is not in conformity with the statutory provisions. He submitted that the goods imported by the appellants through Nhava Sheva Port (44 nos. of consignments) were not in retail packaging, but were imported in packages, containing one dozen pieces each, meant for sale to various wholesalers. Further, it has also been stated that the quantities imported by the appellants were enormous and were absolutely incomparable with the minuscule quantities imported in the above referred B/Es. In this connection, learned Advocate submitted that total units imported by the appellants for their own wholesale business in India during the disputed period was in the range of 48,99,681 uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted. Thus, he stated that the provisions of Drugs and Cosmetics Act, 1940 and the rules framed thereunder should be applicable to the goods imported by the appellants, and not the Legal Metrology (Packaged Commodities) Rules, 2011. 3. Shri Adeeb Pathan, learned Authorised Representative (AR) appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that the department's action in re-determination of the RSP is justified, where ever it is noticed that there is under valuation of the goods. Learned AR also submitted that affixation of MRP/RSP is a statutory requirement to be complied by the importer dealing in packaged commodities in terms of Legal Metrology (Packaged Commodities) Rules, 2011; since, the appellants had not complied with the requirements contained therein, confirmation of the adjudged demands in the impugned order is in conformity with the statutory provisions. 4. Heard Shri Zubin Sheth, learned Advocate for the appellants and Shri. Adeeb Pathan, learned AR for Revenue and examined the case records, including the written submissions filed by both sides. 5. The issues involved in the present appeal for consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which a value cannot be determined in respect of the goods being valued; (c) no part of the proceeds of any subsequent resale, disposal or use of the goods by the buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be made in accordance with the provisions of rule 10 of these rules; and (d) the buyer and seller are not related, or where the buyer and seller are related, that transaction value is acceptable for customs purposes under the provisions of sub-rule (3) below. (3)(a) Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price. (b) In a sale between related persons, the transaction value shall be accepted, whenever the importer demonstrates that the declared value of the goods being valued, closely approximates to one of the following values ascertained at or about the same time. (i) the transaction value of identical goods, or of similar goods, in sales to unrelated buyers in India; (ii) the deductive value for identical goods or similar goods; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to any imported goods, he may ask the importer of such goods to furnish further information including documents or other evidence and if, after receiving such further information, or in the absence of a response of such importer, the proper officer still has reasonable doubt about the truth or accuracy of the value so declared, it shall be deemed that the transaction value of such imported goods cannot be determined under the provisions of sub-rule (1) of rule 3. (2) At the request of an importer, the proper officer, shall intimate the importer in writing the grounds for doubting the truth or accuracy of the value declared in relation to goods imported by such importer and provide a reasonable opportunity of being heard, before taking a final decision under sub-rule (1). Explanation.-(1) For the removal of doubts, it is hereby declared that:- (i) This rule by itself does not provide a method for determination of value, it provides a mechanism and procedure for rejection of declared value in cases where there is reasonable doubt that the declared value does not represent the transaction value; where the declared value is rejected, the value shall be determined by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be made on such wholesale packages by or under any other law for the time being in force." Drugs and Cosmetics Rules, 1945. "129H. Labeling and Packing of Cosmetics.- No cosmetic shall be imported unless it is packed and labeled in conformity with the rules in Parts XV. Further the label of imported cosmetics shall bear registration certificate number of the product and the name and address of the registration certificate holder for marketing the said product in India. PARTXV LABELLING, PACKING AND STANDARDS OF COSMETICS 148. Manner of labelling.-Subject to other provisions of the rules, a cosmetic shall carry-(1) on both the inner and outer labels: (a) the name of the cosmetics, (b) the name of the manufacturer and complete address of the premises of the manufacturer where the cosmetic has been manufactured..." 7.1 As per the mandate provided under Section 14 ibid, the 'transaction value' is required to be considered on the price i.e., actually paid or payable by the buyer in India to the seller located abroad and that such price should be the sole consideration, meaning thereby that, over and above such agreed upon price, nothing more is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t analyzed the provisions contained in Section 14 ibid read with Rule 3(1) ibid in their proper prospective with regard to determination of the transaction value on the goods imported by the appellants into the territorial waters of India. In context with determination of transaction value, the law is well settled by the Hon'ble Supreme Court, in the case of Eicher Tractors Ltd. v. Commissioner of Customs, Mumbai - 2000 (122) E.L.T. 321 (S.C.) that if the transaction value cannot be determined under Rule 4(1) and does not fall under any of the exceptions in Rule 4(2), then there is no question of determining the value under subsequent rules. Though, the said judgement was delivered in context with the erstwhile Customs Valuation Rules, 1988, but the ratio laid down therein squarely applies to the case in hand inasmuch as in the Customs Valuation Rules, 2007 (presently in vogue), Rule 4(1) and Rule 4(2) in the erstwhile Rules, 1988 were re-numbered as Rule 3(1) and Rule 3(2) respectively. In the said judgement, the Hon'ble Court further held as under: "22. In the case before us, it is not alleged that the appellant has mis-declared the price actually paid. Nor was there a mis-desc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Such findings of the adjudicating authority, in our considered view, are not in conformity with the statutory provisions inasmuch as the RSP at which M/s. Rasasi Perfumers Pvt. Ltd., intended to sell the goods from their retail outlets cannot possibly be the actual RSP, at which the appellants intended to sell the goods (wholesale packages) from their premises. 8.1 In the case in hand, the department has only considered the prices indicated in the invoice nos. 388/13/CM dated 08.12.2013 and 428/14/CM dated 16.12.2014 issued by M/s Al Rasasi International, Dubai (corresponding B/Es nos. 4269739 dated 06.01.2014 and 8027305 dated 19.01.2015) and the statements of Shri Abdul Hafiz Reshamwala, partner of appellants' firm and Shri Vidyadhar M. Thatte, Country head of Rasasi Perfumers Pvt. Ltd., to conclude that the prices indicated in the said invoices are the correct transaction value in respect of the goods imported by the appellants in respect of the remaining 45 B/Es. However, the department had failed to appreciate that the prices indicated in those referred invoices were determined by the Rasasi Perfumers Pvt. Ltd. and the same were also meant for them. On the contrary, the 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 660 30432 100092 37 136/15/cbm 07/08/2015 66156 29772 95928 38 155/15/cbm 26/07/2015 85296 15960 101256 39 198/15/cbm 09-10-2015 121836 - 121836 40 203/15/cbm 09-10-2015 121656 - 121656 41 211/15/cbm 28/09/2015 103788 8808 112596 42 900/15/cbm 18/10/2015 122856 - 122856 43 225/15/cbm 20-10-2015 54132 39144 93276 44 247/15/cbm 11-08-2015 112236 2760 114996 45 321/13/cbm 10-03-2013 116400 - Goods Imported For Al Rasasi for their Retail Business Sr No Invoice number Invoice date Deo Qty Perfum Qty Total Unit 1 428/14 cmb 16/12/2014 1650 3661 5311 2 388/13/cbm 12-08-2013 8578 14000 22578 27889 8.2 Rule 12 ibid provides the mechanism and procedure for rejection of the declared value. The said rule does not empower the proper officer to reject the transaction value, without establishing that such value was not genuine. In the case in hand, the information/documents called for from the appellants by the investigation wing sufficiently prove that the price indicated in the invoices issued by the overseas suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by them. Thus, we are of the view that M/s Rasasi could not be able to sell the products in Indian market through their outlet(s), owing to the reason that the retail sale price was grossly inflated by them. 8.5 Apart from the invoice price referred to in the above two B/Es, the department had also relied upon the statements of other persons, in support of the assertion that the value declared in the disputed B/Es cannot be considered as the transaction value. We have gone through the statements recorded by the department from Shri Abdul Hafiz Reshamwala, Partner of the appellants' firm and Shri Vidyadhar M. Thatte, country head of M/s Rasasi Perfumers Pvt. Ltd. The statement of the partner of the appellant's firm was exculpatory and he had mainly clarified that the transaction value and MRP declared in the B/Es dated 06.01.2014and 19.01.2015 were decided by M/s Al Rasasi International and that they were meant for sale in the outlet(s) owned by M/s Rasasi Pvt. Ltd. The said clarification cannot be made as the basis for alleging any undervaluation or mis-declaration on the part of the appellants in the B/Es filed by them, with regard to the imports made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, no recommendation has been provided in the Customs statute for adopting the MRP as the basis for arriving at the transaction value of the imported goods. Even considering the fact that the transaction value can be arrived at on the basis of RSP, the wholesale dealers (appellants herein) are outside the scope and ambit of the Legal Metrology (Packaged Commodity)Rules, 2011. Rule 2(k) in the said rules has defined the phrase 'retail package' to mean the packages which are intended for retail sale to the ultimate consumer for the purpose of consumption of the commodity contained therein. Similarly, the phrase 'wholesale package' has been defined in Rule 2(r) ibid to mean a package containing a number of retail packages, where such first mentioned package is intended for sale, distribution or delivery to an intermediary and is not intended for sale directly to a single consumer. The provision regarding the declaration to be made on every package has been contained in Rule 6 ibid, and the said rule is meant for the retail package(s) and not to the wholesale package(s), for which separate provisions have been made in Rule 24 ibid. In the proviso clause appended to Rule 24 ib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled. The department in the present case, has not specifically alleged that appellants had not complied with the requirements provided under the Act of 1940 and the Rules, 1945. Further, the authorities entrusted with the power for enforcement of the said statutory provisions have also not initiated any proceedings, alleging that the provisions of such statutes have been contravened by the appellants. Therefore, it can be concluded that as an importer and wholesaler of perfumes, the appellants had duly complied with the provisions of Drugs and Cosmetics statute. In view of the fact that the appellants as the importer/wholesaler of perfumes and deodorants are governed under the provisions of Drugs and Cosmetics statute, they are outside the purview of the Legal Metrology Act, 2009 and the rules framed there under. 10. In view of the foregoing discussions and analysis, we are of the considered opinion that in the present set of facts, rejection of transaction value, re-determination of the same, confiscation of the impugned goods, confirmation of the differential duty demand along with interest and imposition of penalties on the appellants shall not stand the judicial scrutiny ..... X X X X Extracts X X X X X X X X Extracts X X X X
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