2009 (1) TMI 630 - AT - Customs

Sutures - Confiscation - Misdeclaration - ophthalmic equipment - benefit of N/N. 21/2002-Cus. dated 1-3-2002 (Sl. No. 367B List 38 Sl. No. 5) - Held that - It appears from the relevant invoice and Bill of Entry that PVC tubings of various diameters were imported on spools in the lengths of 34.560 m 18.000 m and 4.800 m. As rightly observed by the lower appellate authority these items could not be imported in standard sizes as the tube length required for medical equipment depended on numerous factors. Hence the ordinary practice is to import such tubings of medical grade in running lengths so that the requisite shorter lengths could be cut out and used as accessory to medical equipments. Even if an applicant does not claim benefit under a particular notification at the initial stage he is not debarred prohibited or estopped from claiming such benefit at a later stage - the appellants are eligible for the benefit of N/N. 17/01-Cus. N/N. 21/2002-Cus. N/N. 6/2002-C.E. in respect of the goods which are imported by them. Whether there is mis-declaration as alleged by the revenue? - Held that - even though the imported goods were not ready for being used as Cinematographic Films in the sense that they could be straightaway put on a projector or a camera the appellant cannot be said to have mis-declared them by describing and classifying them as Cinematographic Colour Films (Unexposed). The law is clearly settled as to the claiming of classification of the goods and claiming exemption under particular notification is a matter of belief and would not amount to mis-declaration. Appeal allowed.

Issues Involved:

1. Eligibility for concessional rate of duty under Notifications No. 17/2001-Cus., No. 21/2002-Cus., and No. 6/2002-C.E.
2. Allegation of mis-declaration and suppression by the appellants.
3. Applicability of limitation period for issuing Show Cause Notice under Section 28 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Eligibility for Concessional Rate of Duty:

The appellants imported polypropylene, poly glycolic acid, and nylon in thread form, and surgical needles, claiming concessional duty under Notifications No. 17/2001-Cus., No. 21/2002-Cus., and No. 6/2002-C.E. The Customs authorities denied the benefit, asserting that the goods were not part of ophthalmic equipment as specified in the notifications.

The Tribunal examined the entries in the relevant notifications, particularly Sl. Nos. 363 and 367 of Notification No. 21/2002-Cus., and concluded that the items imported by the appellants, including sutures and atraumatic needles, could be classified under List 37, which includes "Cardio vascular sutures, including sternum steel sutures." The Tribunal found that the goods imported were indeed eligible for the concessional rate of duty under these entries. The Tribunal also referred to the Supreme Court's decision in Northern Plastics Ltd. v. CCE & CE, which held that claiming a wrong benefit does not amount to mis-declaration if the goods are correctly described.

2. Allegation of Mis-declaration and Suppression:

The Customs authorities alleged that the appellants mis-declared the goods by claiming ineligible benefits, leading to evasion of duty. The Tribunal, however, found that the appellants had declared the goods as sutures and atraumatic needles, which were assessed and cleared by the Customs officers. The Tribunal held that the appellants' belief that the goods were covered under the relevant notifications was bona fide and could not be considered mis-declaration or suppression.

The Tribunal cited the Supreme Court's ruling in Northern Plastics Ltd., which stated that a wrong claim of exemption does not constitute mis-declaration if the description of the goods is accurate. The Tribunal also noted that the appellants provided certificates from medical authorities indicating that the imported goods were suitable for cardiovascular surgeries, supporting their claim for concessional duty.

3. Applicability of Limitation Period for Issuing Show Cause Notice:

The appellants argued that the Show Cause Notices issued on 6-6-2006 for goods cleared between July 2001 and September 2005 were time-barred. The Tribunal, however, did not delve extensively into the limitation issue, as it had already decided the case on merits in favor of the appellants.

The Tribunal noted that the Customs authorities had cleared the goods after assessing the bills of entry, and there was no suppression or mis-declaration by the appellants. Therefore, the extended period of limitation under Section 28(1)(b) of the Customs Act, 1962, could not be invoked.

Conclusion:

The Tribunal set aside the impugned orders, allowing the appeals with consequential relief. It held that the appellants were eligible for the concessional rate of duty under the relevant notifications and that there was no mis-declaration or suppression on their part. The Tribunal's decision was pronounced in open court on 12-1-2009.

← Previous Next →