Whether confiscation of goods and penalty tenable in case where no MRP has been printed on goods imported in pre packaged form?

PJ/Case Law/2013-14/2079

Case:- PACIFIC (INDIA) TRADE CONCERN V/S C.C. (PREVENTIVE), NEW DELHI

Citation:- 2013 (297) E.L.T. 389 (Tri.-Del.)

Brief Facts:- The appellant imported hair oil, hair colour, men’s shaving gel, men’s shaving cream and other consumable items in retail packing for sale to the ultimate consumers. The goods were cleared under Bill of Entry dated 2-2-2007 and in the Bill of Entry as per the provisions of Customs Tariff Act, the MRP at which the goods imported were to be sold had also been declared for the purpose of assessment of Additional Customs Duty. However, in terms of the provisions of para 5 of General Notes of Foreign Trade Policy, in respect of the commodities imported in pre-packaged form to which the provisions of Standards of Weights and Measures Act, 1976 and the Rules made thereunder apply, the price at which the goods were to be sold in India to the consumers were also to be declared on the goods, prior to their clearance. In this case, though the goods were cleared on payment of duty, the jurisdictional Customs authorities found the same to be without any MRP stickers. The department accordingly alleged that the goods were cleared without affixing MRP rendering the same liable for confiscation. The goods were accordingly placed under seizure on reasonable belief that same are liable for confiscation under the provisions of Section 111 of the Customs Act, 1962. Subsequently, the Additional Commissioner vide Order-in-Original dated 23-3-2012 ordered confiscation of the goods valued at Rs. 2,66,273/- and as the same had already been released on furnishing bond and bank guarantee, the appellant were directed to pay the redemption fine of Rs. 1 lakh besides penalty of Rs. 50,000/- imposed on them under Section 112(a) of the Customs Act, 1962. On appeal being filed to the Commissioner (Appeals), the Commissioner (Appeals) vide Order-in-Appeal dated 27-9-2012 upheld the confiscation of the goods but reduced the redemption fine to Rs. 40,000/- and penalty to Rs. 30,000/-. Commissioner (Appeals) held that since the goods were found without MRP sticker, the provisions of Foreign Trade Policy has been contravened rendering the same liable for confiscation under Section 111(d) of the Customs Act. Aggrieved by this order of Commissioner (Appeals), the assessee filed the present appeal.

Appellant’s Contention: -The appellants contended that MRP at which the goods were sold had been declared in the Bill of Entry and Additional Customs Duty had been paid on that basis. Further, the MRP in respect of the goods declared in the bill of entry is to be deemed to be affixed on each individual package. Confiscation of goods after clearance is bad in law, as there is no contravention of any provisions of Import Trade Policy and hence the impugned order upholding the confiscation of goods and imposition of penalty is not sustainable.

Respondent’s Contention:-The Respondents submitted that according to Para 5 of the General Notes regarding Foreign Trade Policy, in respect of the packaged commodities which are subject to the provisions of Standards of Weights and Measures (Packaged Commodities) Rules, 1977, when imported into India, the MRP at which the goods are to be sold is required to be declared along with other particulars. In this case, it is not disputed that goods were not having MRP. In view of this, the provisions of Import Trade Policy have been contravened and hence the goods have been correctly confiscated and penalty has been correctly imposed. Therefore, they pleaded that there is no infirmity in the impugned order.

Reasoning of Judgment:- The Hon’ble Tribunal held that in this case, there is no dispute that MRP of the imported goods had been declared in the Bill of Entry and on this basis, Additional Customs duty has been paid. However, the MRP had not been declared on the individual packages. According to Para 5 of the General Notes of Foreign Trade Policy, when packaged commodities in respect of which the provisions of Standards of Weights and Measures Act, 1976 and the Rules made there under are applicable, the MRP at which the goods are to be sold in packaged form to the ultimate consumer is required to be declared on each package. Since in this case, there is no evidence that prior to clearance of goods, MRP has been declared on the package and in fact, no MRP stickers had been found on the packages, the provisions of ITC policy have been contravened rendering the goods liable for confiscation. Looking to the quantum of redemption fine and penalty the same are found to be reasonable. Therefore they do not find any infirmity in the impugned order.
In view of the above findings, the appeal filed by the appellant was dismissed being devoid of any merits.

Decision:- The appeal was dismissed.

Comment:-The essence of this case is that when packaged goods in respect of which the provisions of Standards of Weights and Measures Act, 1976 are applicable are imported, the MRP at which the goods are to be sold in pre packaged form to the ultimate consumer is required to be declared on each package. If no MRP stickers are found on the packages, the same shall be liable for confiscation and penalty shall be imposable as it amounts to contravention of the provisions of the Import Policy formulated by the DGFT.

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PJ/Case Law/2013-14/2079

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