2001 (6) TMI 79 - AT - Customs

Summary

Issues Involved:
1. Eligibility for the benefit of Notification No. 23/98-Cus.
2. Valuation and enhancement of price.
3. Classification of 3-way stopcock or 3-way connector.
4. Imposition of penalties.

Summary:

1. Eligibility for the benefit of Notification No. 23/98-Cus:
The primary issue was whether the imported cannulas qualified for the benefit of Notification No. 23/98-Cus. The appellants argued that the cannulas were covered under Sl. No. 34 of List No. 22 of the said notification, supported by opinions from medical experts and technical literature. The Revenue contended that the appellants had previously paid duty on similar imports and that the DGHS opinion did not support the exemption. The Tribunal found that the DGHS had given inconsistent opinions over time and that the appellants' expert opinions were more credible. Thus, the benefit of Notification No. 23/98-Cus. was deemed admissible for the imported cannulas.

2. Valuation and enhancement of price:
The Tribunal examined an agreement between the appellants and their supplier, which specified the quantities and prices for the imported goods. The Department's objection was the absence of a precise contract showing the quantities for the lower price. The Tribunal found the agreement specific and the appellants' statements about quantities and prices credible. Therefore, the demand for differential duty was not sustainable and was set aside.

3. Classification of 3-way stopcock or 3-way connector:
The Tribunal considered whether the 3-way stopcock or connector was covered under Notification No. 23/98-Cus. The Revenue argued that these items performed additional functions and were not covered. The Tribunal referred to a previous decision in the case of Sanghi Synthetics (P) Limited, which allowed exemption for items with multiple functions. It concluded that the 3-way stopcock and connector were covered under the notification and eligible for the exemption.

4. Imposition of penalties:
Given the Tribunal's findings that the benefit of Notification No. 23/98-Cus. was admissible and that there was no case for demanding differential duty, the imposition of penalties on the appellants was deemed unwarranted. Consequently, the penalties were set aside. The Tribunal also noted that the appellants, Shri Sunil Nanda and Shri Rajeev Malik, had acted in accordance with the law based on the invoice descriptions, and thus, no penalties were justified against them.

Disposition:
The six appeals were disposed of in favor of the appellants, granting them the benefit of Notification No. 23/98-Cus., setting aside the demand for differential duty, and nullifying the penalties imposed.