Custom, Excise & Service Tax Tribunal
Daikin Airconditioning India Pvt. Ltd vs Mumbai Ii on 4 May, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/420/2011
[Arising out of Order-in-Appeal No: 141(GR.VA)/2011(JNCH)/IMP-103 dated 30/03/2011 passed by the Commissioner of Customs (Appeals), Mumbai II.]
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
Honble Shri P.R. Chandrasekharan, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Daikin Airconditioning India Pvt. Ltd.
Appellant
Vs
Commissioner of Customs
Mumbai II
Respondent
Appearance:
Shri Bharat Raichandani, Advocate for the appellant Shri A.K. Prabhakar, Superintendent (AR) for the respondent CORAM:
Honble Shri Ashok Jindal, Member (Judicial) Honble Shri P.R. Chandrasekharan, Member (Technical) Date of decision: 03/05/2012 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
This appeal arises against the Order-in-Appeal No: 141(GR.VA)/2011(JNCH)/IMP-103 dated 30/03/2011 passed by the Commissioner of Customs (Appeals), Mumbai II.
2. The facts relevant for the case are as follows:
2.1. The appellant M/s. Daikin Airconditioning India Pvt. Ltd., New Delhi, imported indoor units of split air conditioners in pre-packed form from Japan and Thailand under Bill of Entry No. 932243 dated 09/03/2010 and claimed the benefit of exemption from Special Additional Duty of Customs under Notification No. 29/2010-Cus dated 27/02/2010. The adjudicating authority vide order dated 23/03/2010 denied the benefit of the said exemption. Aggrieved by the order the appellant preferred an appeal and the lower appellate authority dismissed their appeal. The lower authorities took the following facts in consideration while arriving at the above conclusion.
2.2. The appellant imported the indoor unit in pre-packaged form with MRP labels affixed on them and manufactured the outdoor unit in its factory at Neemrana, Rajasthan. The imported indoor units and the domestically manufactured outdoor units were stock transferred to various warehouses of the appellant separately with separate MRP affixed on the respective packages. The imported packages were not distributed till the point of retail sale. From these facts, the lower appellate authority concluded that the goods are not separate/individual parts required for maintenance, etc. which are generally sold in retail and the imported goods are one of the two complementary units of air conditioners, one requiring the other for making a complete air conditioner. Therefore, these individual complementary units are not capable of being sold to retail consumers. Accordingly, he held that the imported indoor units, though pre-packed and affixed with MRP cannot be considered as packages intended for retail sale. Hence, the appellant is not eligible for the benefit of Notification No. 29/2010-Cus dated 27/10/2012 as amended.
3. The learned counsel for the appellant makes the following submissions:
3.1. Notification No. 29/2010 grants benefit of exemption from SAD on the following goods, namely, all pre-packaged goods intended for retail sale in relation to which it is required, under the provisions of the Standards of Weights and Measures Act, 1976 (60 of 1976) 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. As per the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, pre-packaged commodity means a commodity, which without the purchaser being present, is placed in a packaged of whatever nature, whether sealed or opened, so that the commodity contained therein has a pre-determined value and includes those commodities which could be taken out of the package for testing or examining or inspecting the commodity. The imported indoor units satisfy the definition of pre-packaged commodity as defined in Packaged Commodity Rules cited supra. Further, as per Rule 3 of the said Rules, the provisions of the said Rules apply to packages intended forr retail sale. Hence the provisions of the said Rules are attracted in respect of the imported indoor units. The Notification nowhere stipulates that the imported indoor units should be sold as a stand alone article and it should not be sold in complement with other articles.
3.2. He also submitted copies of the invoices under which these indoor units have been sold as such to various customers on payment of appropriate sales tax / VAT. In these invoices, there is a reference to the Bill of Entry under which they have been imported and also the code number of the article as reflected in the imported invoices. It can thus, very well seen that the imported indoor units are sold as such as stand alone articles in many cases. Merely because imported articles have been also sold in complement with outdoor units domestically manufactured, it cannot be said that the imported units have not been sold in retail. A perusal of the invoices would also indicate that there is no one to one correspondence between the indoor units and the outdoor units, i.e., in the sales effected by them, the same number of indoor and outdoor units have not been sold but different numbers of these units have been sold which clearly shows that the indoor units and the outdoor units are not sold as a set or in compliment. These evidences available on record, were produced before the lower authorities but they have not been appreciated and a wrong inference have been drawn by the authorities to deny the benefit under Notification No. 29/2010 as amended.
3.3. He relies on the judgment of this Tribunal in the case of Vijirom Chem Pvt. Ltd. vs. Commissioner of Customs, Bangalore reported in 2006 (199) ELT 751 (Tri.-Bang.) wherein a similar issue came up for consideration and the imported goods were repacked and sold. Even then, it was held that the goods has not undergone any change and were sold as such and accordingly this Tribunal granted the benefit of Notification No. 56/98-Cus in respect of Special Additional Duty. He further relies on the judgment of this Tribunal in the case of Agarwalla Timbers Pvt. Ltd. vs. Commissioner of Customs, Kandla 2010-TIOL-1378-CESTAT-AHM wherein a similar issue came up for consideration in the context of Notification No. 102/97-Cus which granted exemption from Special Additional Duty of Customs subject to conditions similar to that prescribed in Notification No.29/2010. In that case, the imported timber logs wee subjected to sawing and sold as sawn timber in different sizes and length and the benefit of the Notification was denied on the ground that the sawn timber and timber logs are different. This contention of the Revenue was negatived by the Tribunal and the appellant was allowed the benefit of the Notification.
4. The learned AR appearing for the Revenue reiterates the findings of the lower authority.
5. We have carefully considered the rival submissions. Notification No. 29/2010 grants exemption to a pre-packaged goods intended for retail sale in relation to which there is a statutory requirement of declaring on the package thereof the retail sale price of such article. It is not disputed in the instant case that the indoor units imported by the appellant satisfies those requirements. The only ground taken is that since the indoor units had been sold along with outdoor units, it cannot be said that the indoor units are intended for retail sale as such. On perusal of the sale invoices submitted by the appellant, it is seen that the indoor units have been sold as stand alone articles in retail as also along with outdoor units manufactured indigenously. Even in those cases, where the goods have been sold as complementary units but different numbers of indoor units and outdoor units have been sold. Therefore, the conclusion drawn by the lower authorities that the indoor units are not intended for retail sale is not borne out of evidences available on record.
5.1. In the Vijirom Chem Pvt. Ltd. vs. CC (cited supra) a similar issue arose and this Tribunal held that so long as the imported goods are sold as such, either in the same condition or in the re-packed condition, the benefit of exemption from SAD cannot be denied. Moreover, the purpose of SAD is to make it at par with local sales on payment of sales tax. As the sales tax has been levied, the question of levying SAD does not arise. In the instant case, from the invoices submitted by the appellant, it is evident that they are discharging the VAT liability on the retail sale of imported indoor units to customers. Therefore, object of levying SAD on imported goods is satisfied so that both the imported goods as well as indigenous goods are at par with respect to levy of local taxes. Thus, we find that the ratio of the judgment of this Tribunal in the case of Vijirom Chem Pvt. Ltd. vs. CC (cited supra) applies squarely to the facts involved herein. Accordingly, we hold that the benefit of Notification No. 29/2010-Cus dated 27/02/2010 is available to the appellant.
6. Accordingly, the appeal is allowed with consequential relief, if any.
(Operative Part Pronounced in Court) (Ashok Jindal) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 8