Custom, Excise & Service Tax Tribunal
M/S. Bharti Telemedia Ltd vs Commissioner Of Customs (Import) Nhava ... on 15 July, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. C/85563, 85564/2014 (Arising out of Order-in-Appeal No. 1383(GR.VA/B)/2013 (JNCH)/IMP-1118 dated 23.12.2013 & OIA No. 1360 (GR.) VA. & B/2013(JNCH)/IMP-1099 dated 16.12.2013 passed by the Commissioner of Customs (Appeals) Mumbai-II ) For approval and signature: Honble Mr. P. S. Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) =======================================================
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 : No
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?
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M/s. Bharti Telemedia Ltd.
:
Appellant
M/s. Dish TV India Ltd.
VS
Commissioner of Customs (Import) Nhava Sheva
:
Respondent
Appearance
Shri T. Viswanathan Advocate with Ms. Srinidhi Ganeshan, Advocate for Bharti Telemedia Ltd. and
Shri K. Madhavrao Advocate for Dish TV India Ltd. for Appellant
Shri M.K. Sarangi Joint Commissioner (A.R) for respondent
CORAM:
Mr. P.S.Pruthi, Member (Technical)
Mr. Ramesh Nair, Member (Judicial)
Date of hearing : 15/07/2015
Date of decision 31/07/2015
ORDER NO.
Per : P.S. Pruthi
1. The issue involved in the two appeals is common; therefore a common order is being passed.
2. The point to be decided by us is whether Set Top Boxes (STBs) which are part of the Customer Premises Equipment (CPE) and imported by the appellants should be subjected to countervailing duty under Section 3(2) of the Customs Tariff Act by assessment in terms of Section 4 or in terms of Section4A of the Central Excise Act.
3. The appellants are licensed by the Government to provide Direct to Home (DTH) broadcasting services. They are registered for payment of service tax under the Finance Act, 1994 for providing such services to the subscribers. The appellants imported STBs in packages which bear the following declaration: Not meant for retail sale, specially packed for the purpose of serving DTH industries. STB shall remain property of Bharti Telemedia Limited. Accordingly, no retail sale price (RSP) is declared on the STBs at any time, either at the time of import or thereafter.
3.1 The appellants conduct operations in the following manner: they enter into separate contracts with the Service Providers who install the equipment at the premises of the customer/subscriber and with the Distributors. The appellants sell Activation vouchers and Recharge Coupons to Distributors who in turn sell these to the ultimate subscribers, Service tax being paid by the appellants on the full value of the Vouchers and Coupons including the Distributors margin. In terms of the agreement entered with the Service Providers, the appellants supply free of cost CPE ( consisting of STB, viewing card, remote control, dish antenna, cable) to the Service provider. According to the appellants, the ownership of the CPE continues to remain with them.
3.2 It is the view of the Customs department that in terms of definition of sale under Section 2(r) of the Legal Metrology Act, 2009 (hereinafter referred as LMA), the amount of consideration charged from the customers at the time of the installation of the STB at customers premises is partly on account of sale of the STBs. Further the appellant satisfiy the condition of Notification RE/44/2000 (issued by DGFT) in relation to pre-packaged commodities. Therefore it is required under the LMA and Rules framed thereunder to declare on the imported goods the retail sale price (hereinafter referred as RSP). The goods are also notified under Notification No. 49/2008-CE dated 24/12/2008 for the purpose of levy of CVD on MRP basis under Section 4A. Thus the adjudicating authority ordered assessment of STBs for levy of CVD under Section 4A of the Act. This order was upheld by the Commissioner (Appeals). The appellant are in appeal before us against the order of Commissioner Appeals
4. The submissions of the Ld. Counsels for both appellants are, by and large, the same. The first submission is that the goods i.e STBs are not intended for retail sale. Therefore there is no requirement under the Legal Metrology (Package Commodity) Rules, 2011(referred hereinafter as PC Rules) to declare the RSP on the STBs. Further the terms and conditions on the subscriber application form (SAF) filled by subscribers at the time of installation of STBs clearly mention that STBs shall remain the property of the appellant and if the STB is given under a scheme on security deposit basis, the same shall be refunded only if the STB is returned in proper working condition. It was emphasized that STBs are not sold, they are merely entrusted to the subscriber for providing the service of viewing TV channels; the property and title is not transferred. The STBs are shown in the Balance sheets as capital assets. VAT authorities in Bihar and Maharashtra have also held that the supply of STBs to the customer does not constitute sale and therefore not subject to VAT. The Ld Counsels contended that it is wrong to allege that the business model adopted by them leads to tax evasion on the ground that some charges paid by the customer at the time of installation of the STBs are actually towards cost of the STBs. Reliance was placed on the Apex Court judgment in the case of Pandit Laxmikanta Jha Vs. Commissioner of Income Tax [1970(75) ITR 790(SC)] to contend that the legal character of the transaction should be seen and not the substance. Further they are providing warranty for the service provided and not for the goods. It was stated that the issue in the present case stands settled by CESTAT in the case of Sun Direct TV Pvt. Ltd. Vs. Commissioner of Central Excise [2009(243) ELT 705]. Ld Counsel for Bharti Telemedia also contended that under Section 3(2) of the Custom Tariff Act, CVD can be demanded only with reference to the RSP declared on the imported package but there is no mechanism to assess the CVD when the imported package does not bear any RSP. He also argued that under Rule 3 of the PC, Rules, there is no obligation to declare MRP on products intended for use of institutional consumers, which they are. Ld. Counsel for Dish TV relied upon on the Honble Karnataka High Court decision ILR-2010-KAR-1968 holding that when the property is not passed, coverage under Legal Metrology Act is unwarranted. He argued very strongly that for goods to be leviable to CVD under Section 4A by virtue of the Legal Metrology Act, the definition of sale under the Legal Metrology Act has to be adopted and not the definition of sale under the Central Sales Tax (CST) Act as proposed by the Ld. A.R. appearing on behalf of the Revenue. There is no sale involved as the STBs are being supplied free, unlike during the period prior to 1/4/2012 when the appellant were giving CPE including STB on rental basis which attracted deemed sale liability under Article 366(29A) of the Constitution read with the VAT Act. He also stated that the reliance by the Ld. A.R. on the judgments in the case of Reliance Communication Infrastructure Vs. CC [2012 (279) ELT 85 (Tri.-Del.] and Dish TV India Ltd. Vs. Commissioner 2013 (298) ELT 563 is misplaced because in those cases relating to the period prior to 1/4/2012, the appellant were showing the transfer of STBs on rental basis in the invoices and VAT was paid. Therefore, it was held that the SAD refund is admissible because the transaction amounted to deemed sale in the context of right to use. He relied on the judgment in the case of NESCO Pvt. Ltd. [1985(19) ELT 15] to state that the definition of deemed sale in Article 366(29A) cannot be used in Section 4A of the Central Excise Act. It was pointed out when the definition of sale is provided in Legal Metrology Act the same has to be adopted by virtue of Section 3 of this Act which provides that provisions of this Act will override provisions of other Acts in case of conflict. In response to the ARs argument that under TRAI Regulations the STBs have to be sold or rented, the Counsels argued that TRAI Regulations do not put an embargo on providing any other option to the subscriber apart from the schemes of sale, rental or hire purchase. They also stated that if the departments views were to be accepted, the total Customs duty payable under Section 4A will be less than the duty payable under Section 4. This is because they would be entitled to exemption under Not 21/2012 dt 17-3-2012 from payment of SAD on pre-packaged goods intended for retail sale. They submitted a calculation chart in support of this contention. They also stated that service tax is paid by them on the complete amount charged from the subscriber including the dealers commission. Lastly it was contended, while not agreeing, that if the transaction is considered as a composite one, the service element is predominant and service tax would be payable only on the service component. Parallel was drawn to the case of sale of SIM Cards whereby in a judgement of the Honble Apex Court in the case of Idea Mobile Communication Ltd 2011(23) S.T.R. 433(SC) it was held that only service is provided.
5. The stand of Revenue is that the imported goods i.e STBs are a packaged commodity, hence the provisions of Legal Metrology Act will apply and assessment under Section 4A is warranted. According to Ld. A.R., even though the title of goods may be retained by the appellants, there is transfer of right to possess and enjoyment of the goods which amounts to sale as per the definition of sale in the CST Act. According to him, the stand of the department earlier in the case of Dish TV Ltd. (supra) and Reliance Communications (supra) was that there is no sale on the basis of transfer of right to use. However CESTAT held that assessment under Section 4A is proper. He relied on the case of Jayanti Food Processing (P) Ltd. [2007(215)ELT 327(S.C.)] which dealt with sale of telephones in bulk. The Honble Apex Court held that the nature of sale is not important and there is no need of actual sale to the subsequent person/actual user. As long as MRP is depicted as per the PC Rules, the assessment has to be done under Section 4A. Further argument of the Ld. A.R. is that even if the importer does not show supply of STB as sale but recovers the amount as activation charges, it will not exempt them from the provisions of the Legal Metrology Act. On the point that free supply of KitKat Chocolates in Jayanti Food Processing (P) Ltd case was noted by the Apex Court to hold that Section 4A will not apply, he said that the cost of goods in the present case should have been treated as miscellaneous expenses and not shown as capital goods. Regarding the case of Idea Mobile (supra) relied upon by the Counsels, he stated that the said case dealt with levy of sales tax on telephonic service and not on telephones which is left open. He disagreed that the present case is a case of import by institutional consumers which does not come under the purview of PC rules by citing the case of Jayanti Food Processing (P) Ltd(supra) which also dealt with supply of telephones to institutions such as MTNL/BSNL.
5.1 The next contention of the Ld. A.R. is that the appellants were not transparent in disclosing the schemes offered to the consumers. He referred to an Order passed by the Competition Commission of India in case No. 2/2009 of Consumer Online Foundation Vs. Tata Sky, which at para 1.4(x) states that TRAI stipulation requires every Service Provider to give the consumer three options with respect to STBs, namely outright purchase/hire purchase/rental. The appellant had stated in the proceedings before the Competition Commission that they are complying with TRAI Regulations. AR stated that appellant have to follow one of the three options and therefore they cannot say that there has been no sale of STBs
6. We have carefully considered the submissions made by both sides.
7. The issue is to be examined with reference to the legal provisions. The countervailing duty i.e. CVD, as it is commonly referred to, is levied under Section 3(2) of the Customs Tariff Act, 1975. The dispute centers around the proviso to Section 3(2) which states that:
[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 articles; 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 belongs, is-
(i) the goods specified by notification in the Official Gazette under sub-section (1) of Section 4A of the Central Excise Act, 1944 (1 of 1944), the value of the imported article shall be deemed to be the retail sale price declared on the imported article less such amount of abatement, if any, from such retail sale price as the Central Government may, by notification in the Official Gazette, allow in respect of such like article under sub-section (2) of Section 4A of that Act;
The proviso above states that in certain cases the CVD shall be levied on the basis of retail sale price declared on the imported packages. It is clear that 2 conditions have to be met for CVD to be levied on the basis of RSP, namely:
(1) Under Legal Metrology Act it should be required to declare on the package the retail sale price (RSP);
(2) The imported goods must be specified in the notification issued under Section 4A(1) of the Central Excise Act, 1944.
Only if these two conditions are satisfied, the CVD will be payable on the value equal to the retail sale price less the amount of abatement prescribed. In the case at hand it is undisputed that the second condition is met. Whether the first condition is met or not needs to be decided by examining the relevant provisions of the Legal Metrology Act. The relevant provisions are reproduced below:
Legal Metrology Act Section 2 (r) "sale", with its grammatical variations and cognate expressions, means transfer of property in any weight, measure or other goods by one person to another for cash or for deferred payment or for any other valuable consideration and includes a transfer of any weight, measure or other goods on the hire-purchase system or any other system of payment by instalments, but does not include a mortgage or hypothecation of, or a charge or pledge on, such weight, measure or other goods; The Legal Metrology (Packaged Commodities) Rules, 2011
(k) retail package means the packages which are intended for retail sale to the ultimate consumer for the purpose of consumption of the commodity contained therein and includes the imported packages;
Provided that for the purposes of this clause, the expression ultimate consumer shall not include industrial or institutional consumers;
(l) retail sale , in relation to a commodity, means the sale, distribution or delivery of such commodity through retail sales shops agencies or other instrumentalities for consumption by an individual or a group of individuals or any other consumer;
(m) retail sale price means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer and the price shall be printed on the package in the manner given below:
Maximum or Max. retail price Rs./-Rs.. inclusive of all taxes or in the form MRP Rs. /- Rs.. incl., of all taxes after taking into account the fraction of less than fifty paisa to be rounded off to the preceding rupees and fraction of above 50paise and up to 95 paise to the rounded off to fifty paise;
The retail sale price is defined above as the maximum price at which retail package may be sold. And retail package means packages which are intended for retail sale to the ultimate consumer. In other words the retail price will be required to be declared on the package only if it is intended for retail sale. The Ld. Counsels have contended that there is no sale at all. They have referred to the definition of sale under the Legal Metrology Act, and emphasized that unless there is transfer of property it cannot be said that sale has taken place. It is seen from the definition that there should be a transfer of property for any consideration or there should be a transfer on the hire-purchase system or by any system of payment by any installments. We find in the present case that there is no transfer of property or hire-purchase system involved nor there is a system of payment by installments. Thus there appears to be no sale in the use of the Set Top Box by the ultimate consumer. The Ld. A.R. referred to the definition of sale in the Central Sales Tax Act, 1956 which reads as:
(g) Sale, with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes
(iv) a transfer of the right to use any goods for any purpose (whether or nor for a specified period) for cash, deferred payment or other valuable consideration; It is seen that the definition of sale in the CST Act has a much wider coverage and it includes the transfer of right to use any goods. But we see no reason to import the definition of sale from another statute when CVD is to be levied on the basis of the Legal Metrology Act, read with the Central Excise Act. Reliance is correctly placed by the Ld. Counsel on the judgment of the Supreme Court in the case of Geo Miller & Co. Vs. State of Madhya Pradesh Manu/SC/0491/2004. In this case concerning the Madhya Pradesh Entry Tax Act, the Honble Supreme Court was dealing with the definition of sale whose scope is enlarged by Art 366(29A) by including transfer of goods in the execution of Works Contract. Nevertheless the Apex Court held that the intention of the legislature in excluding execution of works contract from the definition of sale in the Madhya Pradesh Act is manifest and this clearly reflects in the letter of law. Apart from this judgement, we find Section 3 of the Legal Metrology Act clearly provides that in case of inconsistency with the provisions of any other Act, the provisions of the Legal Metrology Act, will prevail. Therefore, it is beyond doubt that the definition of sale which ought to be considered in the present case before us is the definition stated in the Legal Metrology Act.
7.1 This leads us to examine the facts with reference to that part of definition of sale which requires that there should be transfer of property. That is, whether on the basis of evidence it can be established that there is transfer of property in the transactions between the appellant and the ultimate subscriber of DTH Service. The appellants have put forth various pieces of evidence in this regard. They have referred to the agreements with their service provider, distributor as well as with the ultimate consumers. None of the agreements speak of transfer of property of STBs. They have also referred to the declaration on the subscriber application form (SAF) filled by the subscriber which clearly indicates that the title to the goods, namely STBs, remains with the appellants. The Ld. A.R. argued that while signing the SAF, the subscriber doesnt put a remark against any of the options i.e the options of sale or hire-purchase or rental. According to him such a contract involving the transactions becomes void in terms of the Indian Contract Act as the consumer is not aware of what he has agreed to in the SAF. We are not inclined to go into the details of the Contract Act for the reason that there is enough evidence to indicate that there is no sale involved in the transaction. We find that the STBs are shown as capital assets in the books of accounts/Balance sheets and depreciation is claimed by them. The CPEs including STBs are capitalized on activation of the same. It has also been shown that VAT authorities of Maharashtra and Bihar have held that the supply of STBs does not constitute sale. We find the Ld. A.R.s comments strange when he states that the expenses shown as capitalization of assets should have been treated as misc. expenses. There is no authority in law to compel the appellant to do so. It is, thus, clear to us that there is no transfer of property.
7.2 Only because the imported packages conformed to the Notification RE/44/2000 issued by DGFT in relation to Package Commodities does not necessarily mean that the MRP is required to be declared. Conforming to the notification may imply various other requirements such as weight of package. This is observed by us after seeing the various provisions of the Legal Metrology Act and the Packaged Commoditiy Rules. It has been stressed by the Ld. Counsels that far from there being actual sale, the STBs are not even intended for sale. Under Rule 2(k), retail package is a package intended for retail sale. We have shown there is no sale. Therefore we cannot appreciate how, in the face of all evidence to the contrary, Revenue can still consider that there has been sale of STBs. We are supported in our view by the decision of the Honble High Court of Karnataka in the case of Bharati Airtel Ltd. MANU/KA/0011/2010 in which it was held that the emphasis under the provisions of the Act and the Rules is in respect of commodities which are intended for sale, by themselves. Though the commodities in question are displayed in packed form they are not meant for sale by themselves. It is always coupled with or incidental to the subscriber availing the services provided by the petitioner. Further, as there is clearly an agreement by the subscriber to surrender the devices on termination of the contract, it cannot he said that there is any element of sale involved. The suggestion on behalf of the respondents that the petitioner has devised a way to include the cost of the device into the service charges that are imposed, cannot be accepted as a finding of fact without there being an adjudication in this regard. 7.3 Revenue has adduced no evidence whatsoever to show that the cost of STBs is being passed on as service charges. In the absence of any credible evidence, we reject the contention of Revenue that the appellants have devised a way to build the cost of the STBs into the service charges. We find the case at hand quite similar to the transactions of SIM Cards for Cellular Phones. The Honble Supreme Court in the case of Idea Mobile Communication Ltd. (supra) held that The position in law is therefore clear that the amount received by the cellular telephone company from its subscribers towards SIM Card will form part of the taxable value for levy of service tax, for the SIM Cards are never sold as goods independent from services provided. They are considered part and parcel of the services provided and the dominant position of the transaction is to provide services and not to sell the material i.e. SIM Cards which on its own but without the service would hardly have any value at all. Thus, it is established from the records and facts of this case that the value of SIM cards forms part of the activation charges as no activation is possible without a valid functioning of SIM card and the value of the taxable service is calculated on the gross total amount received by the operator from the subscribers. The Sales Tax authority understood the aforesaid position that no element of sale is involved in the present transaction. In the supply of STBs too there is no sale, only service is being provided.
8. We find a direct judgment on the issue at hand in the case of Sun Direct TV Pvt. Ltd. (supra). However, we have chosen to analyze the issue threadbare as both sides have put forth various points on facts as well as law which are required to be addressed in a comprehensive manner. We do not agree with the reliance placed by the Ld. A.R. in the cases of Dish TV India and Reliance Communication (supra). These cases related to the periods prior to 1.4.2012 when Dish TV showed transfer of STBs on rental basis as reflected in the invoices. VAT was also paid thereon. It was in that context that the Tribunal came to the conclusion that VAT was paid and there was a deemed sale in the context of right to use as enshrined in Article 366(29A) of the constitution. Therefore, the Tribunal held that since sale was involved, refund of SAD is admissible under the Customs Notification which provided for exemption from SAD on the condition that the goods are imported for subsequent sale which is to be evidenced by payment of appropriate sales tax or VAT.
9. An issue raised by the Ld. A.R. is with regard to TRAI Regulations. According to Revenue, TRAI Regulations mandate that the subscribers must be given an option for outright purchase or hire-purchase or rent. It is rightly contended by the Ld. Counsel that TRAI Regulations do not expressly prohibit the provision of service under any other Scheme. However it is our considered view that notwithstanding the TRAI Regulations, the statutory provisions of the Legal Metrology Act cannot be ignored. We have discussed these provisions in some detail above to come to the conclusion that there is no sale of the STBs. Whether TRAI guidelines are followed or not is a matter to be determined by the appropriate authorities. Here we are concerned only with the application of the Customs Tariff Act, Central Excise Act and the Legal Metrology Act which is specifically referred to in Section 3(2) of the Customs Act. It is under these Acts that we have to determine whether RSP based assessment is warranted or not. Therefore on this point Revenue has no case.
9.1 Another argument put forth by Revenue is that because the transaction between the service provider and the customer has a warranty Clause, therefore it can be said that the goods have been sold and the property does not remain with the service provider. This argument does not appeal to us because warranty is normally provided in the delivery of services too and not in the delivery of goods alone. And in the present case what is provided is delivery of service. The allegation by Revenue that the cost of STBs is recovered through service charges is belied by the fact that the duty paid in terms of Section 4 of the Central Excise Act would be more than the duty payable under Section 4A considering that, in the latter case, refund of SAD would be admissible. The counsels submitted calculation charts to evidence this point and Revenue does not counter the same.
9.2 The Ld Counsel for Bharti Telemedia also contended that there is no mechanism for determining duty under Section 4A if MRP is not printed on the packages. As we have already decided that there is no sale in the present case, we do not find it necessary to go into this contention.
10. Both sides relied heavily on the Honble Supreme Court Judgment in the case of Jayanti Food Processing (P) Ltd. Vs. Commissioner of Central Excise 2007 (215) ELT 327 (SC). We have carefully gone through this judgment. While dealing with the case of free supply by Pepsi of KITKAT Chocolates ( which are sold by KITKAT to Pepsi) along with a Pepsi bottle, the Honble Court accepted the argument that contract of supply of Chocolates was for the purpose of advertisement of a particular product of the particular industry, and it would get covered within the expression servicing any industry to get exemption from applicability of the PC Rules. The relevant provision Rule 34 reads as : 34. Exemptions in respect of certain packages. Nothing contained in these rules shall apply to any package containing a commodity if,- (a) The marking on the package unambiguously indicates that it has been specially packed for the exclusive use of any industry as a raw material of for the purpose of servicing any industry, mine or quarry. It is demonstrated by the Ld. Counsel of Bharti that the imported goods bear following declaration.
Not meant for retail sale, specially packed for the purpose of serving DTH industries. STB shall remain property of Bharti Telemedia Limited. Therefore in the present case too as the goods are meant for servicing the DTH industry, they would get covered by the exemption clause in Rule 34.
10.1 We also note that the same Apex Court judgment at para 29 stated that :
It was then suggested that the free gift by Pepsi to its customers would amount to distribution and would, therefore, be amounting to retail sale and the package of KITKAT would be retail package. However, what is material is the definition of retail sale price. The requirement of Rule 6(1)(f) is specific. It requires the retail sale price of the package be printed or displayed on the package. If there is no sale involved of the package, there would be no question of Rule 6(1)(f) being attracted. There is a clear indication in the definition of retail sale price as provided in Rule 2(r) which clearly explains that the MRP means the maximum price at which the commodity in packaged form may be sold to the ultimate consumer. Thus, the definition of sale in section 2(v) of the SWM Act becomes relevant. Therefore, unless there is an element of sale, as contemplated in Section 2(v), Rule 6(1)(f) will not be attracted and thus such package would not be governed under the provisions of SWM(PC) Rules which would clearly take such package out of the restricted arena of Section 4A(1) of the Act and would put it in the broader arena of Section 4 of the Act.
Rule 6(1)(f) which is now Rule 6(1)(e), requires every package to bear the retail sale price. Applying the ratio of the above judgement we see in the present case also, as there is no sale involved, Rule 6(1)(e) is not attracted. Therefore the imported packages would not be governed by the provisions of LMA (PC Rules) and would not be assessable to duty on RSP basis.
10.2 Ld. A.R. has not appreciated the Honble Supreme Court judgment above in its proper perspective. In the said judgment it was held that: We are not in a position to accept the arguments of learned Counsel that merely because there is a bulk sale to DoT, MTNL and BSNL, the assessment should be under Section 4 of the Act. We again mention it at the cost of repetition that the nature of sale it not important, what is important is the requirement of printing the MRP on the packages. It was not and indeed cannot be disputed that these telephones are also sold in the retail market in the same form and the same package and there is requirement of printing the MRP on each package of the Push Button Telephone. The vital part missed by the Ld. A.R. in the present case is that it has not been established that there is any sale. Therefore he cannot rely on the above judgment in which there was bulk sale to MTNL/BSNL. Further Court also held that When a retail package containing any commodity is produced, distributed, displayed, delivered or stored for sale for consumption by an individual or group of individual, it would be a retail package. In this case, admittedly, DOT, MTNL and BSNL provided these instrument, after they have purchased the instruments, to the individual customers, though not by way of a sale but for their use. The present case is clearly distinguishable because the importers are not selling Set Top Boxes either to the dealer or to the customer whereas in the case of Jayanti Food Processing (P) Ltd the telephones were sold to MTNL/BSNL. And the telephones had MRP printed on them which is not so in the present case of STBs.
10.3 We would like to mention that judgments may be relied on the basis of facts and circumstances obtaining in the cases being adjudicated. The judgments have to be applied in the context in which they are delivered otherwise it will result in chaos. The case of Jayanti Food Processing (P) Ltd when relied upon in the proper context clearly favours the appellants.
11. During the course of arguments it emerged that Dish TV had recovered damages from the subscribers in case a Set Top Box is damaged. In such cases the replacement box is sold to the subscriber at a cost. Therefore in such cases, as an element of sale is involved, CVD would be payable under Section 4A of the Act. Accordingly, it is ordered that assessment be done and duty be paid on MRP basis in such cases.
12. In view of the findings in paras 7 to 10 above, we hold that the Set Top Boxes imported by the appellants are not leviable to CVD on RSP/MRP basis in terms of Section 4(A) of the Central Excise Act except for the Set Top Boxes actually sold as held in para 11 above.
13. Appeal No. C/85563/2014 of M/s. Bharti Telemedia Ltd. is allowed and Appeal No. C/85564/2014 of M/s. Dish TV India Ltd. is partly allowed in above terms.
(Pronounced in court on 31/07/2015) (Ramesh Nair) Member (Judicial) (P.S.Pruthi) Member (Technical) SM.
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