2025-VIL-1380-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs – Affixing of Retail Sale Price (RSP) tag, Mis-declaration of RSP – Appellant imported 'Little Tree' brand Car Air Freshener Paper Tag and declared the RSP and assessable value in the Bills of Entry. During investigations, the Department found that the price tags affixed on the goods in the appellant's warehouse showed a much higher RSP compared to what was declared in the Bills of Entry - Department rejected the declared RSP and assessable value, re-determined them, and demanded differential duty along with interest and penalties - Whether affixing the higher priced labels amounts of manufacturing a new product – HELD - The appellant's argument that by affixing the higher priced labels, it was effectively manufacturing a new product and hence the higher RSP should not be applied to the imported goods, is untenable. The goods as imported were meant for retail sale and the appellant had itself declared the RSP in the Bills of Entry. The mere fact that it affixed higher priced labels later cannot make the goods a new product - The gross mis-declaration of RSP gave sufficient reason to the Department to re-examine the declared assessable value – Further, the appellant's claim of "honest belief" that it could mis-declare the RSP and later affix higher priced labels is not acceptable. Such a deliberate and planned mis-declaration cannot be termed as an honest belief, and therefore, the extended period of limitation was rightly invoked - The reassessment of RSP and assessable value, and the imposition of penalties under Sections 114A and 114AA of the Customs Act are upheld – The appeal is dismissed
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