2026-VIL-1839-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Authority of proper officer to determine an undeclared retail sale price for levy of additional duty of customs under Section 3 of Customs Tariff Act, 1975 - Respondent imported notebook computers for a State Government free distribution scheme, which were notified goods for assessment on retail sale price basis under Section 4A of the Central Excise Act, 1944, declared no retail sale price and self-assessed the additional duty on transaction value - Appellant-Revenue issued SCN alleging suppression and proposing differential duty by adopting the contract price with the implementing agency, inclusive of tax, as the retail sale price - The Adjudicating Authority dropped the proceedings, and Revenue appealed after review under Section 129D - Whether the proper officer had authority in law to assess the duty on an undeclared retail sale price by adopting the contract price - HELD - The point is a pure question of law arising on the face of the SCN, and Respondent can support the order on it. The proviso to Section 3(2) operates only where the retail sale price is required to be declared on the package, borrows from Section 4A only the list of notified goods and the abatement, and deems the value to be the retail sale price declared, being silent on cases where none is declared. The power to ascertain the retail sale price in the prescribed manner exists only under the Central Excise Act and the Determination of Retail Sale Price Rules, which Section 3 of the Tariff Act does not borrow, and the Customs Act and Valuation Rules provide no method for it. The Larger Bench has held that ascertainment otherwise than in the prescribed manner is without authority of law, and the Tribunal has consistently held that no differential duty can be demanded on undeclared retail sale price for want of machinery, including a coordinate Bench on the same scheme, which binds this Bench. The dismissal without reasons of civil appeals by the Hon'ble Supreme Court is not a declaration of law. The measure of a levy is part of the charging scheme, a deeming fiction cannot be pressed beyond its purpose, and a substantive power enlarging the burden cannot be implied. The decisions relied on by Revenue concern regulatory powers, machinery expressly incorporated by statute, or declared prices, and are distinguishable. The SCN cited no provision empowering the valuation and adopted a composite contract price including items not imported and local tax, a defect going to the root of jurisdiction - The proper officer had no authority to assess the duty on an undeclared retail sale price, and the demand cannot be sustained on this ground alone - Requirement of declaration of retail sale price on packages of laptops meant exclusively for free distribution under Legal Metrology Act, 2009 and Packaged Commodities Rules, 2011 - Packages were printed as being for supply to the State Government only and not for retail sale, and were paid for by the implementing agency from State funds and given to students free - Appellant-Revenue contended that Section 18(1) of the Legal Metrology Act prohibited import for sale without declarations, that distribution through an instrumentality is itself retail sale, and that the opinion of the central authority prevailed over that of the State Controller - Whether the packages were required to bear a declaration of retail sale price so as to attract the proviso to Section 3(2) of the Tariff Act - HELD - Section 18(1) requires only the prescribed declarations, and the requirement to declare retail sale price arises under the Chapter of the Rules dealing with packages intended for retail sale. The Hon'ble Supreme Court has held that where there is no requirement to declare the price, Section 4A does not apply, and without an element of sale of the package to the ultimate consumer, free distribution through another party is not retail sale even where the goods were sold to that party for a price. The paragraphs concerning telephones rested on the admitted fact that the same packages were sold in the retail market. The Hon'ble Supreme Court has since held that a consumer is the final consumer and not an intermediary, and that no mandate to declare the price exists for bulk supplies to intermediaries for distribution. The Board Circular, binding on the Department, directs valuation under Section 4 of goods not required to carry a retail sale price, including free and bulk supplies to Government. The decisions relied on by Revenue involved assessees who had declared the price and turned on whether the buyer was an institutional consumer, without considering whether the package was intended for retail sale, and the decision on adhesive tapes involved retail sales and rested on a premise set aside by the Hon'ble Supreme Court. The SCN did not allege retail sale or diversion, a voluntary declaration by other importers creates no legal requirement, and the opinions of the metrology authorities were not conclusive - Revenue failed to establish any requirement to declare the retail sale price, the proviso to Section 3(2) was not attracted, and this is an independent ground for setting aside the demand - Extended period of limitation under Section 28(4) of Customs Act, 1962 and alleged suppression of sale price - SCN alleged intentional suppression of the sale price, whereas the Bills of Entry showed that no retail sale price was declared and duty was self-assessed on transaction value, and Respondent disclosed the contract, price and composition of supply and asserted its legal position from the outset - Whether the extended period was available to Revenue - HELD - The omission was apparent on the face of the Bills of Entry, the price said to be suppressed was in the purchase order and invoices produced by Respondent, and the SCN relied on the very statement disclosing it. The authorities under the Legal Metrology Act gave conflicting opinions on Revenue's own reference, so the dispute was one of interpretation. Suppression connotes deliberate withholding of facts with intent to evade duty, and mere non-payment does not amount to it, as held by the Hon'ble Supreme Court and by this Bench on similar facts arising from the same scheme - The allegation of suppression fails and the extended period was not available - Confiscation under Section 111(d) and 111(o), interest under Section 28AA, penalty under Section 114A, and finalisation of provisional assessments - Revenue proposed confiscation on the premise that import without retail sale price contravened the Legal Metrology Act, and the goods were provisionally assessed and released on bond with the special additional duty retained as security - Whether the goods were liable to confiscation, whether interest and penalty were attracted, and what follows for the provisional assessments - HELD - Since there was no legal requirement to declare the retail sale price, the premise for confiscation under Section 111(d) fails, and Section 111(o) was invoked without any allegation of an unobserved exemption condition. With no short levy and no suppression, interest and penalty have no basis, and this Bench has earlier held, following the High Court decision affirmed by the Hon'ble Supreme Court, that Section 3 of the Tariff Act as it then stood did not borrow the Customs Act provisions on interest, penalty and confiscation for additional duty. The provisional assessments must be finalised under Section 18 on the value under the main part of Section 3(2), on which duty has been paid, so that no deficiency arises - The goods are not liable to confiscation, no interest or penalty is attracted, the appeal of Revenue is dismissed and the order of the Adjudicating Authority is upheld, with direction to finalise the provisional assessments within three months, deal with the security under Section 18(2), discharge the bond and grant consequential relief.
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