2013 (10) TMI 999 - AT - Customs

Waiver of Pre-deposit - Differential Duty - Benefit of Notification No.21/02 - The appellant described the goods as Transparent Skin Barrier Microporous Surgical Tapes in some of the Bills of Entry and Skin Barrier Microporous Surgical Tapes in other Bills of Entry - Prima facie , the tenor of the statement given by the Managing Director of the company had to be gathered by a reading of the entire text of the statement, which we have done - Relying upon KMS Medisurgi Pvt. Ltd. vs CC (Import), Mumbai 2008 (2) TMI 807 - CESTAT, MUMBAI - Prima facie, we cannot take a view that the Managing Director of the company conceded duty liability by agreeing that the description of the goods was misdeclared in material particulars - The Notification, at Sl. No.363 thereof read with List 37 appended thereto, specifically exempted Skin Barrier Microporous Surgical Tapes from payment of duty. The goods were so declared/described by the assessee in the relevant Bills of Entry. The department ought to have at least sought expert opinion on the technical aspects involved in the case - If is against this background that we are looking at the stay orders produced by the learned counsel for the appellant - Goods which were declared as Skin Barrier Microporous Surgical Tapes were the subject-matter of those cases also. Waiver and stay were granted in those cases - there was no option but to grant waiver of predeposit and stay of recovery against the adjudged dues - a Bank Guarantee furnished by the importer stands enforced and this amount stands appropriated too - Hence there will be waiver of predeposit and stay of recovery in respect of the balance amount of duty, interest thereon and penalty - Stay granted.

Summary

Issues:
Grant of exemption under Notification No.21/02-Cus., misdeclaration of goods, waiver and stay of adjudged dues.

Analysis:
1. The appellant sought waiver and stay for adjudged dues amounting to over Rs.2.5 crores, including differential duty demanded on goods covered by 52 Bills of Entry. The appellant claimed exemption under Notification No.21/02-Cus. for "Skin Barrier Microporous Surgical Tapes." The adjudicating authority rejected this claim, confiscated goods, demanded duty, and imposed a penalty under Section 114A of the Customs Act. The appellant sought waiver and stay for the remaining Bills of Entry.

2. The appellant's counsel cited instances where similar goods were imported, and exemption was granted by the Tribunal in those cases. The counsel presented stay orders in support of the appellant's claim. However, the Joint Commissioner (A.R) argued that the facts of this case differed, emphasizing the misdeclaration of goods and strict interpretation of the exemption notification. The AR referred to the Managing Director's statement and legal precedents to oppose the appellant's application.

3. The Tribunal considered the appellant's description of goods, the Managing Director's statement, and the interpretation of the exemption notification. The Tribunal noted discrepancies in the goods' description in the Bills of Entry and the Managing Director's statement regarding misclassification. The Tribunal found that the goods were declared as "Skin Barrier Microporous Surgical Tapes," which were exempted under the notification. The Tribunal criticized the adjudicating authority for not seeking expert opinion and relying on overseas manufacturer websites. The Tribunal emphasized the need for the department to demonstrate that the goods did not fall under the exempted category.

4. The Tribunal acknowledged the AR's argument for strict interpretation of the exemption notification. However, due to procedural flaws and lack of expert opinion, the Tribunal granted waiver of predeposit and stay of recovery for the balance amount of duty, interest, and penalty. The Tribunal noted the enforcement of a Bank Guarantee and its appropriation towards the dues, leading to the decision for waiver and stay of recovery.

In conclusion, the Tribunal granted the appellant waiver and stay of recovery against the adjudged dues, highlighting procedural shortcomings and the importance of expert opinions in such cases.