Custom, Excise & Service Tax Tribunal
Medical Engineers (I) Ltd vs Cc (Import), Mumbai on 27 May, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I Sl. No. Appeal No. Appellant Respondent
1. C/816/11 Medical Engineers (I) Ltd. CC (Import), Mumbai
2. C/817/11 Varun Khurana CC (Import), Mumbai
3. C/818/11 Raj K. Motwani CC (Import), Mumbai
4. C/85132/13 Medical Engineers (I) Ltd. CC (Import), Nhavasheva
5. C/85133/13 Varun Khurana CC (Import), Nhavasheva
6. C/85134/13 Raj K. Motwani CC (Import), Nhavasheva (Arising out of Orders-in-Original No. CAO/65/2011 dated 21.09.2013 and 107/2012 dated 28.09.2012 passed by Commissioner of Customs (Import), Mumbai & Nhavasheva) For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, 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?
Appearance:
Shri Bharat Raichandani, Advocate for appellant Shri M.K. Sarangi, Asst. Commr (AR) for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical) Date of Hearing: 27.05.2015 Date of Decision: 27.05.2015 ORDER NO Per: M.V. Ravindran These appeals are directed against Orders-in-Original No. CAO/65/2011 dated 21.09.2013 and 107/2012 dated 28.09.2012. All these appeals are disposed of by a common order as the issue involved in these cases is arising out of the same impugned order.
2. The relevant facts that arise for consideration are during the period August 2006 to July 2007 M/s. Medical Engineers (I) Ltd. main appellant imported goods and declared them as CNG kit and components falling under Customs Tariff 8409 99 90 and claimed benefit of exemption Notification No. 21/2002 paying Customs duty @ 5% as indicated at Sl. 229, having fulfilled the condition No.39 of the said Notification and also discharged C.V.D on the transaction value of the imported goods. An investigation was carried out on the ground that there was evasion of customs duty by paying C.V.D on CNG kits and components on the transaction value are not on the retail sale price (RSP) as required under the provisions of Section 4A of the Central Excise Act, 1944 read with Entry No.108 of Notification No.49/2008-CE (NT) dated 24.12.2008. After recording various statements, show-cause notice dated 16.3.2011 was issued demanding differential C.V.D amounting to Rs.73,16,285/- interest thereof and penalties on the main appellant as well as the employees of the main appellant. Appellant contested the show-cause notice on merits as well as on limitation. The adjudicating authority after following due process of law, did not agree with the contentions raised and confirmed the demand of differential C.V.D. along with interest and imposed penalties on all the appellants.
3. Learned Counsel would submit that though he may have various arguments on merits of the case as to classification of the products imported by them, for the cases in hand he would restrict the argument only to the limitation aspect. He would draw our attention to the fact that the bills of entries filed with the authorities correctly describes that the imported goods are CNG kits and components. He would submit that the assessment was a final assessment and along with documents they had submitted a certificate issued by the Ministry of Environment and Forest (MOEF) indicated that imported goods are eligible for concessional rate of duty as per Customs Notification No.71/2002. He would submit that the findings recorded by the adjudicating authority as to the relevant aspects are totally incorrect as they have filed all the documents and also discharged the CVD on the transaction value. Since the assessment is in respect of Customs Act, ignorance as is attributable to the appellant is also applicable on the part of the assessing officer. He would also relied upon the judgement of Honble Apex Court in the case of CC v. N.M.K. Jewellers 2008 (225) ELT 3 (S.C.). He would also relied upon the judgement of the Tribunal in the case of CEV Engineering Pvt. Ltd. Jong Sung Kim v. CCE 2014-TIOL-796-CESTAT-DEL as also Jyanti Food Processing (P) Ltd. v. CCE 2007 (215) ELT 327 SC. It is his submission that the impugned order be set aside.
4. Learned D.R. on the other hand, would submit that the imported items are specified under the Standards of Weights and Measures Act, 1976 and the Rules made thereunder as unit packing for declaration of price under MRP. It is his submission that there is no dispute as to the fact that the goods imported by the appellant are covered under the provisions of Section 4A of Central Excise Act, 1944 and CVD is payable. He would submit that it was incumbent on the main appellant to affix the labels or to endorse the cartons with the particulars before clearance by the customs authorities at the place of import. In the case in hand main appellant has not done so and filed Bills of Entry without providing on the package any such declaration that the goods were to be sold on the declared MRP. It is also his submission that the appellants were aware of the fact that the goods are sold on MRP and for which purpose he draws our attention to the invoice issued by the appellant wherein it was indicated that the goods were sold as per MRP. It is his submission that the appellant cannot raise the bogey of limitation as having not declared the MRP on package subscribed to declaration on the bills of entry that the goods are assessed as per RSP, the appellant is liable to pay the differential CVD. He would also submit that the penalties imposed by the adjudicating authority are correct.
5. We have considered the submissions made at length by both sides and perused the records.
6. The only issue to be decided in the case is whether the show-cause notice dated 16.3.2011 issued by the authorities for demanding the differential CVD along with interest and also for imposition of penalties to all appellants is hit by limitation or otherwise.
6.1 The facts are not much in dispute inasmuch, there is an import of the goods during the material period August 2006 to July 2007 and are eligible for benefit of concessional rate of Customs duty under Notification No.21/2002-Cus and are liable for CVD. It is also undisputed that the appellant has paid the CVD on the transaction value which was declared by them to the customs authorities. There is also no dispute as to the transaction value of the imported goods.
6.2 We find that the main appellant is claiming extended period invoked by the show-cause notice dated 16.3.2011 is incorrect. We find that the arguments of the learned Counsel are having a strong force. On perusal of the bills of entry, we find that description of the goods is as is mentioned in the invoices, packing list. We also notice that the main appellant had filed the certificate given by the Ministry of Environment and Forest, Govt. of India indicating that the goods imported by the appellant are eligible for benefit of exemption under Notification No. 21/2002-Cus. We have noticed that the certificate as issued by the Ministry of Environment and Forest is consignment specific and all the consignments cleared during the period August 2006 to July 2007 were based upon such certificate given and filed before the customs authorities. It is to be noted that there is no dispute that all the bills of entries have been finally assessed by the customs authorities.
6.3 On the factual matrix as has been stated above, we find that the adjudicating authority has recorded that it was incumbent upon appellant to declare the RSP on the imported goods and having not done so, there is suppression. We do not agree with the findings recorded by the adjudicating authority for more than one reason.
6.4 Firstly, we find that the declaration made by the appellant on the bills of entry and the assessment of the bills of entry is undertaken physically by the assessing officer. If it is the claim of the Revenue that the appellant had not fixed the retail sale price on the imported package and those being non-compliance with Standards of Weights and Measures Act, it was also for the department to bring to the notice of the appellant that the goods were covered under the said Act and as per the provisions of Section 4A of the Central Excise Act, 1944 they are liable to discharge of CVD on value of MRP/RSP.
6.5 Secondly, we find that there is no answer as when the benefit of Notification 21/2002-Cus for the imported consignments was extended based upon the certificate issued by the Ministry of Environment and Forest, Govt. of India how the assessing officer failed to note that the goods are covered under MRP/RSP. We fail to understand how the assessing officer was not aware that the goods imported are covered by Notification No. 49/2008. It would be correct to say that the assessing officer of the Customs department should be aware of the duty liability of the goods imported and should have assessed the goods correctly by invoking the provisions of Notification 49/2008. It cannot be said that the appellant has suppressed any material fact from the Customs department, atleast in the case in hand.
6.6 We find that another argument of the learned Counsel having force that in identical set of facts, goods which were imported by the appellant at New Delhi, were also subjected to such demand of CVD by invoking extended period was decided in their favour. It is seen that the Commissioner (Appeals) in Order-in-Appeal No. CC(A) CUS/230/2015 dated 20.02.2015 has accepted the contentions raised by the appellant that extended period cannot be invoked as the department was aware of the Notifications issued under Section 4A of Central Excise Act, 1944. We are also of the same view that the demand in question in the case in hand and consequent penalty imposed is incorrect as provisions of Section 28(1) of the Customs Act, 1962 and the proviso thereof, may not be applicable on the facts as recorded by us herein above. It has to be hold that the there was no suppression of material fact by the appellant; and Customs authorities have also erred in not noting that the imported goods are covered for discharge of CVD based upon value determined by MRP/RSP.
6.7 Since the demands which have been raised is beyond the period of six months as per the Customs Act, 1962 and there is no evidence to show willful suppression of facts with intent to evade duty, we hold that the impugned order is unsustainable and liable to be set aside.
6.8 Since we have held that the demands are hit by limitation and is not sustainable, the question of penalties imposed on the main appellant as well as other appellants does not arise.
7. In view of the facts and circumstances of this case, we set aside the impugned order and allow the appeals filed by the appellants.
(Dictated in Court) (P.S. Pruthi) Member (Technical) (M.V. Ravindran) Member (Judicial) nsk ??
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