2015 (8) TMI 814 - AT - Customs

Denial of Benefit of Notification no. 65/88-Cus By denying benefits of notification no. 64/88-Cus in respect of medical equipment imported by appellant, demand of customs duty and penalty was imposed Appellants alleged that they were claiming benefit of Notification No.65/88-Cus before adjudicating authority and said was not considered in impugned order Held that - appellants had not claimed benefit of Notification No.64/88 instead they had claimed benefit of Notification No.65/88-Cus before adjudicating authority As per provisions of Notification No.65/88-Cus, duty liability reduced to ₹ 5,06,253/- Therefore, appellants directed to deposit said amount Matter remanded to adjudicating authority Impugned order set aside Decided in favour of Appellant.

Summary

Issues:
1. Confirmation of demand of customs duty under Notification No.64/88-Cus.
2. Imposition of penalty for non-fulfillment of post-import conditions.
3. Claim of benefit under Notification No.65/88-Cus.
4. Failure of adjudicating authority to consider the alternative claim.

Confirmation of demand of customs duty under Notification No.64/88-Cus:
The appellants imported medical equipment claiming the benefit of Notification No. 64/88-Cus. However, it was later discovered that the post-import conditions were not fulfilled, leading to the withdrawal of the customs duty exemption certificate. A show-cause notice was issued, and the adjudicating authority confirmed the demand of duty amounting to Rs. 15,35,846/- along with a penalty of Rs. 15,000/-. The Revenue argued that the appellants failed to demonstrate compliance with the conditions of the notification, justifying the demand.

Imposition of penalty for non-fulfillment of post-import conditions:
The Director General of Health Services revoked the customs duty exemption certificate due to the appellants' failure to meet the post-import conditions specified in Notification No.64/88-Cus. Consequently, a penalty was imposed by the adjudicating authority. The appellants did not contest the non-fulfillment of conditions but sought to avail the benefit under an alternative notification, i.e., Notification No.65/88-Cus, which was not considered by the adjudicating authority.

Claim of benefit under Notification No.65/88-Cus:
The appellants, during the proceedings, abandoned their claim under Notification No.64/88-Cus and instead asserted their entitlement under Notification No.65/88-Cus, which stipulates a customs duty rate of 40%. The appellants contended that if the benefit under this notification is granted, the duty liability would amount to Rs. 5,06,253/-. The Tribunal acknowledged this claim and directed the appellants to deposit the said amount with the jurisdictional Commissioner for further consideration by the adjudicating authority.

Failure of adjudicating authority to consider the alternative claim:
The Tribunal observed that the adjudicating authority did not assess the appellants' claim under Notification No.65/88-Cus, which could significantly impact the duty liability. Consequently, the impugned order confirming the demand under Notification No.64/88-Cus was set aside, and the matter was remanded to the adjudicating authority for reconsideration. The appellants were instructed to deposit the calculated duty amount and present proof of the deposit for a fresh determination by the adjudicating authority, ensuring a fair opportunity for the appellants to present their case.

This detailed analysis of the legal judgment highlights the issues surrounding the confirmation of customs duty demand, penalty imposition, alternative claim under a different notification, and the necessity for the adjudicating authority to consider all relevant claims before making a final determination.