Custom, Excise & Service Tax Tribunal
Lifestyle International Pvt. Ltd vs Commissioner Of Customs (I), Mumbai on 1 December, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. C/1256/05-Mum (Arising out of Order-in-Original CAO No. 55/2005/CAC/CC(I)/AKP dated 4.8.2005 passed by Commissioner of Customs (Import), Mumbai-I) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) and Honble Mr. C.J. Mathew, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Lifestyle International Pvt. Ltd. Appellant Vs. Commissioner of Customs (I), Mumbai Respondent Appearance: Shri J.H. Motwani, Advocate, for appellant Shri S.J. Sahu, Assistant Commissioner (AR), for respondent CORAM: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 15.11.2016 Date of Decision: 1.12.2016 ORDER NO Per: M.V. Ravindran
This appeal is directed against order-in-original CAO No. 55/2005/CAC/CC(I)/AKP dated 4.8.2005.
2. The relevant facts that arise for consideration are the appellant imported a consignment of tiles and declared them as glazed ceramic tiles claiming classification under heading 6908.90.90. The goods were assessed and on second check basis, duty was paid. During examination of the goods, it was noticed that the goods were not actually glazed ceramic tiles but were glazed vitrified porcelain tiles of UAE origin, which were indicated in the packages. As glazed vitrified porcelain tiles of UAE origin attracted anti-dumping duty, as imposed under Notification No. 73/2003-Cus., it was concluded that the importer-appellant had misdeclared the goods to evade anti-dumping duty due to which the goods are liable for confiscation under Section 111(m) of the Customs Act, 1962 and also that the importer is liable for penalty under Section 112(a) of the Customs Act, 1962. It was also further noticed that these glazed tiles which were imported have been notified under Section 4A of the Central Excise Act, 1944 for the purposes of assessment on the basis of MRP, hence CVD which has been paid was incorrect and required to be charged on the basis of MRP. The importer waived the show cause notice but appeared for personal hearing and filed their submissions. The adjudicating authority by the impugned order held that there was misdeclaration on the part of the appellant for evading anti-dumping duty and confiscated the goods with an option to redeem the same on payment of redemption fine and also imposed penalty and directed CVD to be paid on the basis of MRP which should be 2.5 times of CIF value of the consignment.
3. Learned counsel submits that there is no misdeclaration on the part of the appellant with any mala fide intention to evade anti-dumping duty as the appellant has declared the goods as glazed tiles for personal use from UAE supplier. Since the goods were porcelain glazed tiles, they had classified the same under heading 6908 of the Customs Tariff Act. He draws our attention to the various headings of the Customs Tariff Act. It is his further submission that porcelain tiles fall in the category of vitrified tiles and since there is no separate heading for glazed vitrified tiles under chapter heading 6908, hence they classified the same under 6908.90.90 as others. He would then take us through the bill of entry in relation to the import goods that the description of the goods clearly indicates that they were glazed ceramic tiles and because the appellant omitted to mention the goods were vitrified does not mean there is misdeclaration on the part of the appellant. As regards the countervailing duty on the imported goods levied on the MRP basis, it is his submission that since the tiles which were importer were for personal use, the question of affixing MRP by the supplier or the appellant himself does not arise as if these goods are not resold. There is no reason for them to affix MRP. For this proposition, he relies upon the judgment of the Tribunal in the case of Legrand (India) Pvt. Ltd. vs. CC, Mumbai 2014 (304) ELT 305 and the judgment of the Honble Supreme Court in the case of Jayanti Foods Processing (P) Ltd. vs. CCE 2007 (215) ELT 327 (SC), also relies upon the CBEC circular No. 625/16/2002-CX dated 28.2.2002, which indicates that MRP for goods meant for personal use is not required to be mentioned. It is his submission that since the goods are not liable for confiscation, question of redemption fine and penalty does not arise.
4. Learned departmental representative, on the other hand, draws our attention to the notification issued for imposition of anti-dumping duty and submits that the notification is very clear. It is also his submission that CVD is to be discharged on the MRP is very clear and the appellant has to discharge CVD based upon MRP and hence the goods which are held liable for confiscation is correct and there is no interference is called for in the impugned order.
5. We have considered the submissions made at length by both sides and perused the records.
6. The following two issues fall for our consideration. (1) Whether the appellant had misdeclared the goods so as to make them liable for confiscation under Section 111(m) of the Customs Act and consequent penalty thereof, and (2) whether the appellant is required to declare the MRP of the goods when they are imported for personal use.
7. As regards the liability to confiscation of the goods, we find that the appellant had declared the consignment as glazed ceramic tiles falling under heading 6908.90.90 and on an examination, it was found that they were glazed vitrified porcelain tiles of UAE origin. We find that Notification 73/2003-Cus. imposes anti-dumping duty on the import of vitrified and porcelain tiles other than vitrified industrial tiles originating or exported from UAE at a specific rate. The said notification indicates chapter heading as 6908. We find that the appellant himself has declared the chapter heading of the goods imported as 6908.90.90, hence the liability to pay anti-dumping duty arises. We are not in agreement with the submissions made by the appellant that the product which was imported was glazed porcelain tiles and not vitrified porcelain glazed tiles. The findings of the adjudicating authority on this point are very relevant and not out of context. Accordingly, we hold that the order of the adjudicating authority of assessment to bill of entry by charging anti-dumping duty is correct and does not require any interference. Since there was misdeclaration, we hold that the goods are liable for confiscation. However, the adjudicating authority has imposed redemption fine of Rs.9,00,000/- as against CIF value of approximately Rs.22 lakhs which, in our considered view, is disproportionate. Ends of justice will be met if redemption fine is reduced to Rs.5,00,000/- from Rs.9,00,000/-. The appellant is required to discharge this redemption fine.
8. As regards penalty imposed on this issue, we find that the penalty is also excessive and disproportionate. Accordingly, we reduce the penalty from Rs.5,00,000/- to Rs.2,00,000/- and order accordingly.
9. As regards the CVD payable based upon MRP, we find that the adjudicating authority has totally erred in coming to such conclusion. First and foremost, we find that in the case of imported goods, the MRP has to be declared by the importer if there is going to be resale of the goods. In the case in hand, it is undisputed that the tiles which were imported were to be used by the appellant for their personal use. On this factual matrix, we find that CVD discharged by the appellant based upon the declared value + customs duty is correct and does not require any interference. Further, we find that the adjudicating authority has arrived at MRP in a very unorthodox manner of calculating the same as 2.5 times of the CIF value of the consignment. There is no rationale behind such arrival of the MRP. In view of this, the findings of the adjudicating authority that CVD has to be paid on MRP determined seems to be incorrect and is liable to be set aside and we do so.
10. In short, the appeal of the appellant as regards the discharge of CVD based upon MRP basis calculated is allowed while the appeal of the appellant on the setting aside of redemption fine and penalty and anti-dumping duty is rejected subject to modification as indicated hereinabove.
(Pronounced in Court on 1.12.2016) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) tvu 1 7 C/1256/05