Cus - CVD - S 4A of CEA, 1944 - Fevistick or Gluestick - Glues are pre-packaged and are sold by weight which is clearly indicated on packages - Since net weight is less than 10 gm appellant is exempted from declaring RSP - therefore, CVD to be paid on basis of transaction price: CESTAT
By TIOL News Service
MUMBAI, OCT 27, 2013: THE appellant filed Bills of Entry for the import of adhesives in 5/8 grams packing with the description as Fevistick-5g or Fevistick-8g, Gluestick-5g or Gluestick-8g and Prime Stick-8g.
Inasmuch as the content in the individual packs were less than 10g, the appellant claimed exemption from levy of CVD on MRP basis under the provisions of Rule 26 of the Legal Metrology (Packaged Commodity) Rules, 2011.
The said request of the appellant was rejected by the Assistant Commissioner of Customs, against which the appellant preferred an appeal, who vide the impugned order dismissed the appeal on the ground that the products imported by the appellant namely, Fevistick/Gluestick etc. are sold not on weight basis but on number basis and, therefore, the provisions of rule 26 of Rules, 2011 would not apply.
Hence the appellant is before the CESTAT.
Adverting to section 2(l) of the Legal Metrology Act, 2009, the definition contained therein of the term "pre-packaged commodity”, rule 2(k) of the Legal Metrology (Packaged Commodity) Rules, 2007 defining the term ‘retail packages' the appellant submitted that the adhesives imported are in semi-solid form and quantity contained in the packages is 5g or 8g and the packages bear the net weight of the product. Inasmuch as since the product imported by the appellant fails within the purview of the Legal Metrology Act, 2009 and Legal Metrology Rules, 2011, in terms of Rule 26 of the said Rules, the requirement of declaring the retail sale price (RSP) does not arise as the net weight or measure of the commodity is less than 10g or 10ml or less, since sold by weight or measure, and hence the goods imported by the appellants are not liable to assessment on retail price basis for the purpose of levy of CVD and the demand is not sustainable in law.
Reliance is placed on the decisions in Anabond Ltd.-2008-TIOL-1557-CESTAT-MAD, I.C. Healthcare Pvt. Ltd. - 2005-TIOL-1102-CESTAT-DEL & Bharat Cosmetics-2007-TIOL-580-CESTAT-MUM.
The Revenue representative reiterated the findings of the appellate authority and submitted that as per the said findings the impugned goods are sold on the basis of the numbers and not on the basis of weight as the goods are in stick form and hence the exemption is not available. Reference is also made to the decision of Bombay High Court in the case of Hindustan Unilever Ltd. vs. Commissioner of Customs (Import), Nhava Sheva, wherein the High Court set aside the order of the Tribunal [2011-TIOL-1040-CESTAT-MUM] and remanded the matter back for de novo consideration.
The Bench observed-
"5.1 We have perused the products in packaged form and also the documents relating to the import. As per the declarations made, net weight is declared as 5g or 8g as the case may be for the adhesives contained in the packages. The commercial invoices and the packing list in respect of the said import also bears the declaration-Fevistick-5g/Fevistick-8g as the case may be, which is also the description declared in the Bills of Entry. The goods are in semi solid form and, therefore, in terms of Section 5 of the Legal Metrology Act, 2009 read with rule 12 of the Legal Metrology Rules, 2011, the description of the quantity has to be made in terms of unit of mass, which the appellant has done in the instant case. There is also no dispute of the fact that the item imported is a pre-packaged commodity as defined under Section 2(l) of the Legal Metrology Act, 2009. If that be so, under rule 26 of the Legal Metrology Rules, 2011, there is no requirement of declaring the RSP on the package of the commodity. In other words, there is no statutory requirement of declaring the RSP of the product in respect of the product under importation. If that be so, the assessment of CVD under Section 3 of the Customs Tariff Act, 1975 has to be done on the basis of the transaction value and not on the basis of RSP as claimed by the department."
After mentioning the ratio of the decisions cited by the appellant, the Bench further observed-
"5.6 The facts obtaining in the present case before us are identical/similar to the facts obtaining in the various decisions rendered by this Tribunal in the above cited cases. The glues are pre-packaged and are sold by weight which is clearly indicated on the packages. Since the net weight is less than 10g, the appellant is exempted from declaring the RSP on the packages under Rule 26 of the Legal Metrology Rules, 2011. Since the appellant is statutorily exempted from declaring the RSP on the packages, the assessment of CVD has to be done on the basis of transaction price and not on the basis of RSP."
In fine, the appeals were allowed with consequential relief.
(See 2013-TIOL-1592-CESTAT-MUM)
