Custom, Excise & Service Tax Tribunal
Axalta Coating Systems India Pvt. Ltd vs Commissioner Of Customs (I), Nhava ... on 8 December, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. C/86832/15-Mum (Arising out of Order-in-Appeal No. 351(GR.IIA-F)/2015 (JNCH)-APPEAL-II dated 26.6.2015 passed by Commissioner of Customs (Appeals), Mumbai-II) 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 : 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?
====================================================== Axalta Coating Systems India Pvt. Ltd. Appellant Vs. Commissioner of Customs (I), Nhava Sheva Respondent Appearance:
Shri J.C. Patel, Advocate, for appellant Shri V.R. Reddy, Assistant Commissioner (AR), for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 1.12.2016 Date of Decision: 8.12.2016 ORDER NO Per: M.V. Ravindran This appeal is directed against order-in-appeal No. 351(GR.IIA-F)/2015 (JNCH)-APPEAL-II dated 26.6.2015, wherein the first appellate authority has upheld the demand of duty confirmed, interest thereof and penalty imposed by the adjudicating authority and also the confiscation of the goods.
2. Heard both sides and perused the records.
3. On perusal of the records, it transpires that the issue is regarding demand of CVD on the goods imported by the appellant.
4. Appellant had imported K Ultra Fine Putty and classified the same under Chapter Heading No.3214 and declared an assessable value. The appellants paid the applicable customs duty and also paid the CVD based upon such value and duty liability. It is the case of the Revenue that the said goods which were imported were in pack size 250 gms., hence CVD is to be paid based upon the RSP, as per Notification No.49/2008-CX. Appellants submitted before the lower authorities that they are not reselling the goods in 250 gms. pack size and repack the 250 gms. into 500 gms. pack size in the factory and such repacking, relabeling amounts to manufacture as per chapter note 2, discharge the central excise duty based upon the MRP and as the imported goods are required for manufacturing process within their factory premises, the provisions of Legal Metrology (Packaged Commodity) Rules, 2009 are not applicable. Both the lower authorities have held that Notification 49/2008-CX is applicable as the imported goods were in pre-packaged condition in 250 gms. intended for retail sale.
5. In our considered view, it is to be noticed that Revenue has not adduced any contrary evidence to show that appellant was not repacking the imported goods into 500 gms. pack and was in fact reselling the imported goods in the pack size in which they were imported. It is also not controverted by the Revenue as regards the appellants claim that they are discharging central excise duty on the goods after repacking and relabeling, based upon MRP. On the above factual position, we find that the Tribunal in the case of Starlite Components Ltd. vs. CCE, Nashik 2012 (286) ELT 43, on identical set of facts, in paragraph 8, held as under:-
8.?As regards the appeal of the importer, the declaration of MRP for the purpose of levy of CVD is required only when there is a statutory requirement under the Legal Metrology (Packaged Commodities) Rules, 2011 to declare on the package thereof the retail sale price of such article. Only when the goods are intended for retail sale and are packed in retail packages, the provisions of Legal Metrology (Packaged Commodities) Rules, 2011 would apply. In the case under consideration, from the records of the case, it is absolutely clear that the appellants are importing the impugned goods not for retail sale but for repacking, labelling and branding and selling the same in bulk to M/s. Bajaj Electricals Ltd. Therefore, they are not required to declare MRP in terms of Rule 3 of the said Legal Metrology (Packaged Commodities) Rules, 2011 as they are industrial consumers. This position has been further clarified by DGFT vide notification dated 22-1-2001 wherein it has been clearly stated that import of raw materials, components, bulk imports, etc. would invariably undergo further processing or removal before they are sold to consumer and in respect of these imports, the labelling requirements prescribed under Notification No. 44(RE-2000)97-2002 dated 24-11-2000 shall not apply. It is also not in dispute that the goods are specified in Third Schedule to the Central Excise Act, 1944 and the activities undertaken by the appellant importer amounts to manufacture under Section 2(f) of the said Act. In these circumstances, it is clear that the appellants were not required to discharge duty liability of additional Customs duty on the basis of MRP. Accordingly, we set aside the impugned order demanding the differential duty inasmuch as there was no requirement of declaring MRP. As a result, the confiscation of goods under Section 111(d) and (m) of the Customs Act, 1962 are also not justified. Consequently, the question of payment of redemption fine would not arise and also no penal consequence would follow under Section 112(a) ibid.
6. It can be seen from the above reproduced ratio that the issue in hand is the same, hence we hold that impugned order is unsustainable and liable to be set aside.
7. In view of the foregoing, the impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Pronounced in Court on 8.12.2016) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) tvu 1 5 C/86832/15