APPLE INDIA PRIVATE LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner has challenged the show cause notice dated 27.06.2017 issued by the 2nd respondent under Section 28 of the Customs Act, 1962.

(2.) The petitioner is engaged in the business of (a) Import and trading of finished goods such as Mobile Phones, Computers, iPods (i.e., music system), Apple Watch, iPads and accessories and (b) after-sales services for the products mentioned at (a) above. The after-sales services is referred to as "Apple Care" within the Apple world. It is submitted that the petitioner has no facilities to repair the products (other than computers) for its customers in India as an after-sales activity. Even as per the Foreign Trade Policy, the petitioner is not allowed to import refurbished products. As such, the petitioner imported new units to replace the repaired or malfunctioning units. It is contended that the petitioner was paying Additional Duty of Customs (Countervailing Duty) under Section 3 of the Customs Tariff Act, 1975 on the transaction value of the petitioner's goods imported under the Apple Care brand of services. The Customs Department at the Air Cargo Complex disputed the valuation methodology adopted by the petitioner on the subject goods on the premise that the Retail Sales Price (RSP)/Maximum Retail Price (MRP) has to be applied, not the Transaction Value.

(3.) It is submitted that on 14.12.2012, a representation was given by the petitioner company to the second respondent to provide an opportunity to put- forth the explanation inasmuch as the countervailing duty paid on the transaction value and not on MRP. On such opportunity provided, the second respondent on consideration of all the information provided by the petitioner regarding adoption of transaction value, issued a letter dated 27.02.2013 inter alia directing the petitioner to pay countervailing duty on all goods of Apple Care [warranty and out of warranty] as per Section 4A of the Act 1994. On further clarification sought by the petitioner, it was communicated that extension up to 30.04.2014 is granted for provisional assessment; there shall be no more extensions; the importer shall take all the steps to clear the warranty goods under Section 4A of the Act wherever the said provisions are applicable. On the request made by the petitioner seeking for final assessment of provisionally assessed goods, the Deputy Commissioner of Customs called for certain documents.