By TIOL News Service

NEW DELHI, APR 04, 2014: THE appellant had imported various cosmetics including hair oil, hair colour, shaving gel, shaving cream etc. in retail packs for sale to the end users, i.e., consumers.

In terms of the provisions of the Customs Tariff Act, the maximum retail price (MRP) at which the goods imported were proposed to be sold had to be declared for the purpose of additional customs duty (CVD). Paragraph 5 of the General Notes of the Foreign Trade Policy and the provisions of the Standards of Weights and Measures Act, 1976 also required that the price at which the goods were to be sold in India had to be declared.

Though in the present case goods were cleared on payment of duty, the customs authorities discovered that the MRP stickers were not fixed on the goods.

Alleging that the goods were liable for confiscation, they were seized. Later, they were released on furnishing a bond and bank guarantee.A show cause notice was issued and the Additional Commissioner by an Order in Original directed confiscation of goods valued at Rs.2,66,273/- u/s 111(d) and imposed a redemption fee of Rs.1 lakh besides a penalty of Rs.50,000/-.

The Commissioner (A) upheld the confiscation but reduced the fine to Rs.40,000/- and penalty to Rs.30,000/-.

The CESTAT upheld the order passed by the lower appellate authority and rejected the appeal.

Against this order the appellant filed an appeal before the Delhi High Court.

The High Court observed -

“5. …in this case that the proprietor of the assessee had made a statement under Section 108 admitting that the items imported were covered under Schedule 3 of the items of Central Excise Tariff Act, 1985 and, therefore, required MRP disclosure. Furthermore, the show cause notice and the Order-in-Original are entirely premised upon the goods having been seized because they were found to be without MRP stickers at the time of the search on 16.5.2008. The Order in Original as well as the Order in Appeal are categorical that such valuation attracted Sections 111(d) and 111(m) and thus, properly resulted in penalty and confiscation. After considering these aspects, the redemption fine and penalty were reduced having regard to the entire conspectus of circumstances. These questions were agitated before the CESTAT, which duly considered them. What the appellant/assessee is urging this Court to do is convert itself into a third court of appellate review. Whilst the Court has the power to answer substantial questions of law, at the same time, a mere error in the findings of one or the other lower authorities would be insufficient to invoke the restricted nature of jurisdiction conferred under Section 130 of the Act.”

Holding that no substantial question of law arises for consideration, the appeal was dismissed.

(See 2014-TIOL-427-HC-DEL-CUS)