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Issues: Waiver of pre-deposit of duty on imported product "PediaSure" under a specific customs notification.
Analysis: The appeal before the Appellate Tribunal CESTAT, Mumbai involved the application for waiver of pre-deposit of duty amounting to Rs. 2,97,97,018/- concerning the product "PediaSure" imported by the applicants. The Commissioner of Customs (Appeals), Mumbai had upheld the adjudicating authority's decision that the concessional rate of duty under notification 21/2002-Cus was not applicable to "PediaSure" as it did not qualify as a preparation for infant use. The key contention was that the recommended age group for consumption of "PediaSure" was two to 10 years, while the definition of an 'infant' in certain dictionaries referred to someone below the age of 12 months. Upon hearing both sides, the Tribunal found that the applicants' reliance on a previous decision was misplaced as the circumstances differed significantly. In the previous case, the item in question was explicitly for babies, whereas in the current scenario, "PediaSure" was recommended for children aged two to 10 years. Considering these distinctions, the Tribunal concluded that a strong prima facie case for a total waiver was not established by the applicants. Consequently, the Tribunal directed a pre-deposit of Rs. 1,00,00,000/- to be made within 12 weeks, following which the balance duty pre-deposit would be waived, and the recovery stayed pending the appeal. Failure to comply with this directive would lead to the vacation of stay and dismissal of the appeal without prior notice. The Tribunal set a deadline for compliance to report on 17th July 2006. This decision by the Tribunal highlighted the importance of the specific age group for which a product is intended in determining its classification for duty concessions under customs notifications. The judgment emphasized the need for a clear alignment between the product's recommended usage and the criteria outlined in relevant regulations to qualify for duty benefits.
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