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CTVs � Additional duty calculation
Circular
No. 1 dated 5th January 2000
It is directed to
state that doubts have been raised about the method to be followed with regard
to calculating the additional duty of Customs equal to excise (CVD) in respect
of imported Colour Television Receiver Sets which have the MRP affixed on the
packages containing the sets.
2. It
has been brought to the notice of the Board that at many ports where imports of
Colour Television Receive Sets are taking place, different methods are being
adopted to calculate the CVD leviable on such imports. In some cases the CVD is
being calculated by extending the benefit of Notification No. 5/ 99-CE (S.No.225
sub-clause (i), i.e. 16%. In some cases CVD is being calculated at 16% of a
deemed value, which is arrived at after giving an abatement of 30% from a
declared MRP value. In some cases the CVD is being calculated as per specific
rates as provided in sub-clause (ii) of S. No. 225 of Notification No. 5/ 99-CE
dated 28.2.99.
3. The
matter has been examined. Sub-clause (i) of S.No. 225 of Notification No.5/
99-CE dated 28.2.99 stipulates that where the retail sale price is declared or
the package, at the time of clearance from the factory of production, and forms
the sole consideration for sale to the ultimate consumer the rate of duty
applicable is 16%. Sub-clause (ii) of the same Notification specifies, specific
rats of duty for specified screen sizes for all the other cases.
4. It
is hereby clarified that the provisions of sub-clause (i) of S.No. 225 of
Notification No.5/ 99-CE dated 28.2.99 will not be applicable to the imports of
Colour Television sets, having the MRP affixed on the package containing these
sets, for the following reasons.
a) The
provisions of Rule 33 sub clause (ii) of the Standards of Weights and Measures
(Packaged Commodities) Rules, 1977 stipulate that the responsibility for making
the requisite mandatory declarations including affixing the Retail Price on the
items imported, rest with the importer. In cases where the Retail Price has been
affixed by the supplier abroad and not the importer the procedure is not in
consonance with the provisions of the said Rule.
(b) It is also
to be noted that the provisions under Rule 33 of the Standards of Weights and
Measures (Packaged Commodities) Rules, 1977 would apply only after the
importation has taken place and will not be applicable to situations where the
fixation of the Retail Sale Price has been done prior to the actual act of
importation.
5. Furthermore,
to the extent that Rule 33 of the Standards of Weights and Measures (Packaged
Commodities) Rules, 1977 incorporate provisions which are applicable to packaged
commodities imported into India, it can be construed that there is no specific
bar on the applicability of Notification No. 5/ 99-CE dated 28.02.99 (S.No.225,
sub clause (i) with regard to the imported goods. However the provisions of the
said Notification will have to be read with the provisions contained in Rule 33
of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 and
has to be consistent with the stipulations laid down.
6. The
specific wordings in the Notification namely, "Retail Sale Price declared
on the Package at the time of clearance from the factory of production "
has to be understood to mean a factory of production in the country of import
and not the factory of production situated in the supplier�s country abroad.
7. The
Additional Duty of Customs equal to Excise Duty or CVD to be levied in respect
of imported Colour Television Receiver Sets will have to be calculated in
accordance with the provisions of Section 3(1) of the Customs Tariff Act, 1975.
The Explanation to Section 3(1) of the Customs Tariff Act, 1975 makes it amply
clear that where like goods are manufactured in India and are subject to
different rates of Excise Duty the levy of Additional Duty equal to Excise shall
be at the highest rate.
8. Therefore,
in cases where Colour Television Sets are imported carrying the Retail Price
affixed on the outer package containing these sets, for the purposes of
calculating the CVD, the provisions under sub-clause (I) of S.No.225 of
Notification 5/ 99-CE dated 28.2.99, will not be applicable. The CVD in such
cases will have to necessarily be calculated in accordance with the provisions
of sub-clause (ii), S.No. 225 of Notification No. 5/ 99-CE dated 28.2.99, which
specify specific rates of duty according to this size/ dimensions of the CTV
sets mentioned therein.
9. The
Board desires that the calculation of CVD in respect of imported Colour
Television sets, where the MRP is affixed on the package containing these sets,
be carried out in accordance with the clarifications issued above and immediate
steps be initiated to recover Government dues in respect of similar cases in the
past where the aforesaid methodology of calculating the CVD has not been
adopted.
10. All Trade and field
formations may be suitable informed.
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