2011 (10) TMI 136 - AT - Customs

Import of Ultrasound Scanner - obtained customs duty exemption certificate issued by the DGHS and cleared the same under Notification No. 64/88-Cus dated 01.03.88 - DGHS withdrew the customs duty exemption - Tribunal while upholding the denial of exemption under Notification No. 64/88 dated 01.03.88, confiscation of the goods and imposition of redemption fine and penalty on the importer, remanded the case back to the original adjudicating authority - Assesse contended that When the CVD of duty is nil, special excise duty which is chargeable as percentage of CVD also becomes nil. However, the Commissioner has not granted this benefit while computing the demand of duty; therefore the Commissioner s order quantifying duty is incorrect and has to be set aside - direct the appellant to pay the correct amount of duty within four weeks from today and report compliance to the adjudicating authority. On such compliance, the adjudicating authority shall quantify the actual duty payable as per the order of this Tribunal after giving a reasonable opportunity to the appellant to make submissions, if any. The matter is, thus remanded back to the adjudicating authority - Appeal and stay disposed off.

Summary

Issues:
1. Denial of customs duty exemption certificate by DGHS.
2. Confiscation of goods and imposition of penalty.
3. Computation of duty under Notification No. 65/88.
4. Failure to extend auxiliary duty exemption under Notification No. 159/89.
5. Incorrect quantification of duty by the Commissioner.
6. Charging of special excise duty when CVD is nil.

Analysis:
1. The appellant imported an Ultrasound Scanner and obtained a customs duty exemption certificate from DGHS. However, the certificate was later withdrawn, leading to a demand for customs duty, interest, and penalties. The Commissioner denied the benefit of Notification No. 64/88 but remanded the case to consider Notification No. 65/88. The Tribunal upheld the denial under 64/88, but the Commissioner allowed the benefit under 65/88, leading to a dispute over duty calculation.

2. The appellant argued that the Commissioner erred in computing duty under Notification No. 65/88 by not extending the auxiliary duty exemption under Notification No. 159/89. The Counsel contended that when CVD is assessed as nil, special excise duty should also be nil. The Commissioner's failure to grant this benefit resulted in an incorrect quantification of duty, disputed by the appellant.

3. The Revenue representative acknowledged the error and requested a remand for proper quantification of duty. The Tribunal noted the earlier direction to consider extending the benefit of Notification No. 65/88. It found that the Commissioner failed to extend the benefit of Notification No. 159/89, leading to an error in quantifying customs duty.

4. The Tribunal directed the appellant to pay a reduced amount within four weeks and report compliance to the adjudicating authority. Upon compliance, the authority was instructed to quantify the actual duty payable as per the Tribunal's previous order. The matter was remanded back to the adjudicating authority for proper calculation of duty, considering the auxiliary duty exemption and special excise duty implications.

5. The appeal and stay application were disposed of based on the Tribunal's directions for correct quantification of duty, emphasizing the need to consider auxiliary duty exemptions and special excise duty implications when computing customs duty under relevant notifications.

Judgment Summary:
The judgment revolves around the denial of a customs duty exemption certificate, confiscation of goods, and penalty imposition due to the withdrawal of the certificate. The dispute arose over the correct computation of duty under Notification No. 65/88, with the appellant contesting the failure to extend auxiliary duty exemptions and charging special excise duty when CVD was nil. The Tribunal directed a reduced payment by the appellant and remanded the case for proper quantification of duty, emphasizing the need to consider all relevant notifications for accurate duty calculation.