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Importation of insulated electric cable lengths as components for ECG, alleged suppression of facts, applicability of Notification No. 165/86-Cus., time-barred show cause notice, penalty under Section 114A of the Customs Act, misdeclaration, use of imported cables as replacements, imposition of duty, extended period for demanding duty, clearance of patient cables as spares, differential duty demand, penalty imposition. The case involved M/s. BPL Ltd., Bangalore, importing insulated electric cable lengths, claiming them as components for manufacturing ECG machines under Notification No. 165/86-Cus. The appellants were accused of wilfully suppressing facts about excess cable quantities imported and used in manufacturing patient cable assemblies sold as replacements or warranty spares. The Commissioner of Customs, Custom House, Madras, issued a show cause notice demanding duty and proposing a penalty under the Customs Act. The appellant's counsel challenged the Commissioner's order, arguing that no extra duty was leviable on the goods, the show cause notice was time-barred, and penalty under Section 114A was not applicable for the period in question. The appellants maintained they did not misdeclare or misuse the imported cables, using them for patient cable assemblies ultimately utilized in ECG machines. The Commissioner's order lacked findings on the application of the extended period for demanding duty. The Revenue representative contended that the appellants violated Notification No. 165/86-Cus. by importing excess cables and clearing them as ECG components, some of which were sold as spares, not in compliance with the notification. The concessional duty under the notification was deemed inapplicable to cables cleared as spares, leading to the correct duty demand. The Revenue acknowledged the absence of findings on the extended period and the inapplicability of penalty under Section 114A for the relevant period. The Tribunal noted that the appellants, by clearing patient cables as spares and warranty spares, breached the conditions of Notification No. 165/86-Cus., leading to a demand for differential duty. However, the Commissioner failed to address the applicability of the extended period for demanding duty and erroneously imposed a penalty under Section 114A for a period predating its introduction into the Customs Act. Consequently, the Tribunal concluded that the correct demand for differential duty stood. However, due to the lack of findings on the extended period's applicability, the matter was remanded to the Commissioner to determine the impact on the duty demanded and the penalty. The Tribunal clarified that penalties under Section 114A could not be imposed for acts predating its inclusion in the Customs Act.
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