Concessional CVD on Imported Cement Cannot Be Denied Merely Because Bags Carry Printed RSP: CESTAT [Read Order]

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that concessional Countervailing Duty (CVD) on imported cement cannot be denied merely because the cement was imported in 50 kg bags carrying printed Retail Sale Price (RSP) when the goods were intended for industrial and institutional consumers and not for retail sale.

Greatway Impex, the appellant, imported Ordinary Portland Cement through Tuticorin Port during June and July 2010 under four Bills of Entry and claimed concessional CVD under Clause 1C of Notification No. 04/2006-CE. The department alleged that the cement imported in 50 kg bags with printed RSP was not eligible for the exemption.

By adopting a contemporaneous RSP based on another importer, the department reassessed the goods under Clause 1A(ii) of the notification and raised a differential duty demand of Rs. 1,72,769 along with interest and penalty under Section 114A of the Customs Act.

The adjudicating authority confirmed the demand, interest and penalty. On appeal, the Commissioner (Appeals) upheld the order. Aggrieved by the appellate order, the appellant approached the CESTAT.

The appellant's counsel argued that the imported cement was never intended for retail sale and was supplied only to industrial and institutional consumers engaged in construction activities and manufacture of hollow blocks. They argued that the notification itself excluded packaged commodities that were not intended for retail sale and that the department had failed to establish even a single instance of retail sale.

The revenue representative supported the findings of the lower authorities and argued that cement imported in 50 kg bags carrying printed RSP was not eligible for concessional assessment under Clause 1C. They also argued that reassessment based on contemporaneous RSP was justified and that the differential duty demand, interest and penalty had been correctly imposed.

The two-member bench comprising Vasa Seshagiri Rao (Technical Member) and Ajayan T.V. (Judicial Member) observed that the appellant had consistently maintained that the cement was supplied only to industrial and institutional consumers and that the department had failed to produce any evidence of retail sales.

The tribunal explained that merely because the cement was imported in 50 kg bags with printed RSP, it could not automatically be treated as a retail product. It further observed that the department had not undertaken any proper valuation exercise before rejecting the declared RSP and adopting the RSP of another importer.

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