SC tells Pernod Ricard to pay customs duty on import of CAB.

New Delhi: The customs department has received a shot in the arm with the Supreme Court asking liquor major Pernod Ricard India (P) to pay huge amount towards differential customs duty on import of concentrate of alcoholic beverages (CAB).

While the department, which had proceeded against the liquor major for evasion of customs duty and wrong declaration of quantity, says that it will stand benefited by Rs 800 crore, including penalty, the claim is refuted by company’s counsel V Lakshmikumaran, who said it is far-fetched.

Pernod Ricard in India owns whisky brands which include Royal Stag, Imperial Blue, Blender’s Pride and 100 Pipers. Earlier, Pernod Ricard along with Diageo jointly acquired Seagram’s liquor business globally.

A Bench headed by Justice D K Jain has dismissed Pernod’s plea and set aside a part of the sectoral tribunal’s directions that asked the department to give adhoc adjustment at the rate of 20% in the price difference between each variety of imported concentrate of alcoholic beverages (CAB) of Pernod and the corresponding CAB of its competitor on account of higher volumes of imports by the assessee.

“...we are of this opinion that the tribunal erred in reopening and examining afresh the question as to whether or not the value of CAB could be determined by applying Rule 6 of the Customs Valuation (Determination of Prices of Imported Goods) Rules 1998 and, therefore, the objection of the Revenue in that regard deserves to be accepted. We order accordingly,” the court observed.

It said that adjustments under Rule 5(1)(c) of 1988 Rules cannot be justified in the absence of some documentary evidence indicating that any rebate/discount was given to the assessee by the supplier.

While the assessee had sought discount of at least 40%, the department had argued that the former was not entitled to any adjustment.

Source : financialexpress.com