By TIOL News Service

MUMBAI, DEC 22, 2016: THE appellant imported a consignment of tiles and declared them as "glazed ceramic tiles" [Hdg. 6908.90.90].

The goods were assessed and on second check basis, duty was paid. During examination of the goods, it was noticed that the goods were not actually glazed ceramic tiles but were glazed vitrified porcelain tiles of UAE origin.

As glazed vitrified porcelain tiles of UAE origin attracted anti-dumping duty imposed under Notf. 73/2003-Cus., it was concluded that the importer-appellant had misdeclared the goods to evade anti-dumping duty and consequently goods are liable for confiscation and importer is liable for penalty.

It was also further noticed that these glazed tiles have been notified u/s 4A of CEA, 1944 and hence CVD which has been paid was incorrect since required to be charged on the basis of MRP.

The Commissioner of Customs (Import) upheld the allegations leveled in the SCN.

Before the CESTAT, the appellant inter alia submitted that in the bill of entry the description of the goods is clearly indicatedas glazed ceramic tiles and because the appellant omitted to mention the goods were vitrified, it does not mean there is mis-declaration on their part. As regards the countervailing duty on MRP basis, it is submitted that since the tiles were imported for personal use, the question of affixing MRP by the supplier or the appellant did not arise. Reliance is also placed on the following decisions - Legrand (India) Pvt. Ltd. – 2013-TIOL-1800-CESTAT-MUM, Jayanthi Foods Processing (P) Ltd - 2007-TIOL-150-SC-CX and CBEC Circular No. 625/16/2002-CX dated 28.2.2002.

The AR reiterated the contents of the impugned order.

The Bench observed thus –

Imposition of ADD & confiscation, penalty:

++ The appellant had declared the consignment as glazed ceramic titles falling under heading 6908.90.90 and on an examination it was found that they were glazed vitrified porcelain tiles of UAE origin. Notification 73/2003-Cus imposes anti-dumping duty on the import of vitrified and porcelain tiles other than vitrified industrial tiles originating or exported from UAE at a specific rate. The said notification indicates chapter heading as 6908. The appellant himself has declared the chapter heading of the goods imported as 6908.90.90 hence the liability to pay anti-dumping duty arises; the order of the adjudicating authority of assessment of bill of entry by charging anti-dumping duty is correct and does not require any interference.

++ Since there was misdeclaration, the goods are liable for confiscation. However, the adjudicating authority has imposed redemption fine of Rs.9,00,000/- as against CIF value of approximately Rs.22 lakhs which is disproportionate. Ends of justice will be met if redemption fine is reduced to Rs.5,00,000/- from Rs.9,00,000/-.

++ Penalty is also excessive and disproportionate; reducedfrom Rs.5,00,000/- to Rs. 2,00,000/-.

Declaration of MRP:

++ In the case of imported goods, the MRP has to be declared by the importer if there is going to be resale of the goods. In the case in hand, it is undisputed that the tiles which were imported were to be used by the appellant for their personal use. On this factual matrix, we find that CVD discharged by the appellant based upon the declared value + Customs duty is correct and does not require any interference. Further, we find that the adjudicating authority has arrived at MR P in a very unorthodox manner of calculating the same as 2.5 times of the CIF value of the consignment. There is no rationale behind such arrival of the MRP. In view of this, the findings of the adjudicating authority that CVD has to be paid on MRP determined seems to be incorrect and is liable to be set aside and we do so.

Conclusion: The appeal of the appellant as regards the discharge of CVD based upon MRP basis calculated is allowed while the appeal of the appellant on the setting aside of redemption fine and penalty and anti-dumping duty is rejected subject to modification as indicated.

(See 2016-TIOL-3295-CESTAT-MUM)