Delhi High Court
Pacific India Trade Concern vs Commissioner Of Customs (Prev) on 21 February, 2014
Author: S.Ravindra Bhat
$~15
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% DECIDED ON: 21.02.2014
+ CUSAA 6/2014
PACIFIC INDIA TRADE CONCERN ..... Appellant
Through: Mr. R. Santhanam with Mr. A. P. Sinha,
Advocates.
versus
COMMISSIONER OF CUSTOMS (PREV) ..... Respondent
Through: Mr. Satish Kumar, Sr. Standing Counsel.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.V. EASWAR
MR. JUSTICE S.RAVINDRA BHAT (OPEN COURT)
1. This is an appeal under Section 130 of the Customs Act. The
assessee challenges a final order of the Customs Excise and Service
Tax Appellate Tribunal (CESTAT), whereby its appeal was
dismissed. It urges that a substantial question of law - in respect of
the valuation of imported hair - oil arises for consideration.
2. The appellant had imported various cosmetics including hair
oil, hair colour, shaving gel, shaving cream etc. in retail packs for sale
to the end users, i.e., consumers. The goods were cleared under bills
of entry dated 2.2.2007. In terms of the provisions of the Customs
Tariff Act and Rules, the maximum retail price (MRP) at which the
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goods imported were proposed to be sold had been declared for the
purpose of additional customs duty. Paragraph 5 of the General Notes
of the Foreign Trade Policy and the provisions of the Standards of
Weights and Measures Act, 1976 required that the price at which the
goods were to be sold in India and at which the consumers ultimately
offered the same had to be declared. Though in the present case goods
were cleared on payment of duty, the customs authorities discovered
that the MRP stickers were not fixed on the goods. Alleging that the
goods were liable for confiscation, they were seized. A show cause
notice was issued and the Additional Commissioner by the Order in
Original dated 23.3.2012 directed confiscation of goods valued at
`2,66,273/-. They had been released on furnishing a bond and bank
guarantee. The appellant was required to pay a redemption fee of `1
lakh besides a penalty of `50,000/- under Section 12A of the Customs
Act. The Commissioner of Appeals upheld the confiscation of goods
but reduced the fine to `40,000/- and penalty to `30,000/- on a
finding that since contravention of the Foreign Trade Policy had been
discerned, Section 111 (d) of the Customs Act was attracted.
3. The assessee approached the CESTAT, which by its impugned
order rejected the contentions in the following terms:
"5. I have considered the submissions from both sides and
perused the records. In this case, there is no dispute that which
MRP of the imported goods had been declared in the Bill of
Entry and on this basis, Additional Customs duty has been
paid, the MRP had not been declared on the' individual
packages. According to para 5 of the General Notes of Foreign
Trade Policy, when packaged commodities in respect of which
the provisions of Standards of Weights and Measures Act, 1976
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and the rules made thereunder are applicable, the MRP at
which the goods are to be sold in packaged form to the ultimate
consumer is required to be declared on each package. Since in
this case, there is no evidence that prior to clearance of goods,
MRP has been declared on the package and in fact, no MRP
stickers had been found on the packages, the provisions of ITC
policy have been contravened rendering the goods liable for
confiscation. Looking to the quantum of redemption fine and
penalty, the same are found to be reasonable.
I therefore do not find any infirmity in the impugned order. The
appeal is dismissed."
4. Mr. Santhanam, learned counsel for the assessee, highlighted
that the Order-in-Original was based upon an ex parte determination
which mechanically reproduced the contents of the show cause notice.
It was submitted that the customs authorities did not provide the
records and documents or correlate the allegations with the respective
materials to justify the conclusions resulting in penalty and
confiscation impugned in this case. Counsel emphasized that the
Inspector who prepared the seizure memo or panchnama, did so
without following due procedure and in the absence of any
representative of the assessee. Most importantly, it was urged that the
duty liability was discharged in full and in the circumstances, the
search and seizure was illegal. It was also argued that the Customs or
Central Excise authorities are not entitled to re-fix the price by
applying the other standards.
5. This Court notices in this case that the proprietor of the
assessee had made a statement under Section 108 admitting that the
items imported were covered under Schedule 3 of the items of Central
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Excise Tariff Act, 1985 and, therefore, required MRP disclosure.
Furthermore, the show cause notice and the Order-in-Original are
entirely premised upon the goods having been seized because they
were found to be without MRP stickers at the time of the search on
16.5.2008. The Order in Original as well as the Order in Appeal are
categorical that such valuation attracted Sections 111(d) and 111(m)
and thus, properly resulted in penalty and confiscation. After
considering these aspects, the redemption fine and penalty were
reduced having regard to the entire conspectus of circumstances.
These questions were agitated before the CESTAT, which duly
considered them. What the appellant/assessee is urging this Court to
do is convert itself into a third court of appellate review. Whilst the
Court has the power to answer substantial questions of law, at the
same time, a mere error in the findings of one or the other lower
authorities would be insufficient to invoke the restricted nature of
jurisdiction conferred under Section 130 of the Act.
6. For these reasons, this Court is satisfied that no substantial
question of law arises for consideration.
7. The appeal is, therefore, dismissed without any order as to
costs.
S. RAVINDRA BHAT, J
R.V.EASWAR, J
FEBRUARY 21, 2014
/vks/
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