The Chennai bench of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) held that the imported pre-packaged goods should be intended for retail sale to avail the benefit of Special Additional Duty (SAD).
Cadensworth (Redington) India P. Limited, the respondent assessee availed special additional duty on the products sold upon payment of applicable value-added tax. The Commissioner (Appeals) allowed the benefit of SAD.
The revenue appealed against the order passed by the Commissioner (Appeals) for granting the SAD availed by the assessee.
M. Ambe, the counsel for the department contended that the imported packaged goods were not intended for retail sale as the imported goods were customized as per the requirements of the buyers.
It was further submitted that Even though the value-added tax was claimed to have been paid, mere payment of value-added tax will not decide the retail sale nor their eligibility for the exemption at the time of import.
Further contended that when the goods are not meant for retail sale, the assessee is not eligible for claiming the SAD exemption.
C. Manickam, the counsel for the assessee contended that the goods are pre-packaged and the pre-packaged goods imported were intended for retail sale and they declared on the package the Retail Sale Price (RSP).
It was also submitted that the assessee had paid the applicable value-added tax on the sale, which took place after importing the goods.
The bench observed that the imported pre-packaged goods were sold in units and the same were bought from the importer only by their channel partners/resellers and not directly sold to industrial or institutional consumers.
Also observed that the department was aware as to what was being imported and the purpose and hence, there was nothing that was “suppressed”, more so, to evade payment of duty.
The two-member bench comprising P. Dinesha (Judicial) and Vasa Seshagiri Rao (Technical) did not find any infirmity in the impugned order and dismissed the appeal filed by the revenue.
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