The Bangalore bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) has clarified that there is no legal requirement to declare the Maximum Retail Price ( MRP ) in the Bill of Entry for availing the 4% Special Additional Duty ( SAD ) exemption under Notification No. 21/2012-Cus dated 17.03.2012.
According to the tribunal, the MRP mentioned in the retail package is enough for claiming SAD exemption under Notification.
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M/s Kriztle Bath and Wellness Pvt. Ltd., the appellant who had imported goods and out of charge was given as per the declaration made by the appellant in the Bill of Entry. However, during a post-clearance audit, the authorities alleged that the SAD exemption claimed by the appellant was not valid, as they purportedly failed to comply with the Legal Metrology Act, 2009, and associated rules, resulting in a duty demand of Rs. 83,918/-.
The adjudication authority initially ruled that the appellant was not eligible for the exemption since the MRP was not declared in the Bill of Entry. The authority stated that the correct procedure would have been to pay the SAD on importation and then claim a refund after selling the goods, per Notification No. 102/2007. This decision was upheld by the Commissioner (Appeals), leading the appellant to file an appeal before CESTAT.
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Mr. M. Balagopal, appellant’s counsel submitted that the goods were pre-packed for retail sale, with MRP clearly labeled on the packages, as required by the Legal Metrology Rules. They contended that there is no requirement to declare MRP in the import documents and that the customs authorities had accepted the declaration at the time of import.
The counsel further stated that the proper officer’s failure to mention the MRP on the packages during clearance does not equate to non-declaration by the appellant.
The Revenue maintained that in the absence of any documentary evidence of MRP affixation, the appellant was not eligible for the exemption.
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The bench of P.A. Augustian, Member ( Judicial ) and Mr. Pullela Nageswara Rao, Member ( Technical ) found that the goods were cleared based on the Bill of Entry and that the demand raised during the post-clearance audit was based on assumptions rather than physical verification of the goods.
The Tribunal also noted that there is no statutory requirement under the notification to declare MRP in the Bill of Entry; the only requirement is to affix MRP on the retail packages. As such, no presumption could be made that the goods were non-compliant after clearance.
Accordingly, the CESTAT allowed the appeal, ruling in favour of the appellant. Neeraj Kumar, appeared for the revenue.
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