1997 (3) TMI 183 - AT - Customs

Issues Involved:
1. Jurisdiction of Assistant Collector of Customs, IAD, Madras.
2. Time-barred demands.
3. Correct classification of imported goods.
4. Eligibility for duty-free clearance under Customs Notification No. 208/81.

Issue-wise Detailed Analysis:

1. Jurisdiction of Assistant Collector of Customs, IAD, Madras:
The importers contended that the Internal Audit Department, Customs House, Madras did not have jurisdiction to issue the show cause notices. The Assistant Collector rejected this contention, relying on a prior CEGAT (Southern Regional Bench) decision, which was later reversed by the Karnataka High Court. The High Court categorically held that the Assistant Collector of Customs, IAD, Madras lacked jurisdiction to invoke the proviso to Section 28(1) of the Customs Act, 1962. Consequently, the show cause notices issued by the ACIAD, Madras were deemed without jurisdiction.

2. Time-barred Demands:
The importers argued that the demands were time-barred as the subsequent show cause notices were issued beyond the six-month period stipulated in Section 28(1) of the Customs Act, 1962. The Assistant Collector rejected this argument, but the Karnataka High Court held that the demands were indeed time-barred since the proviso to Section 28(1) was not invoked. Therefore, the demands in respect of Sl. Nos. 1 to 4 were barred by time and could not be confirmed.

3. Correct Classification of Imported Goods:
The Assistant Collector of Customs, Madras classified the goods under Heading 90.17/18, while the Assistant Collector of Customs, Bangalore suggested Heading 39.07. The Assistant Collector confirmed the classification under Heading 90.17/18 without providing reasons or adjudicating on the classification aspect. The Tribunal noted this discrepancy and remanded the matter for de novo consideration to determine the correct classification of the goods in terms of the show cause notices issued.

4. Eligibility for Duty-free Clearance under Customs Notification No. 208/81:
The importers claimed duty-free clearance under Customs Notification No. 208/81. The Assistant Collector denied this benefit, stating that the imported items were for single use and disposable in nature, not for long-term use as required by the notification. This position was supported by judgments from the Calcutta High Court and the Tribunal, which held that scalp vein sets did not qualify for duty-free clearance under the notification. The Tribunal agreed with these judgments and denied the benefit of the notification to the importers.

Conclusion:
The appeals in Sl. Nos. 1 to 4 were dismissed due to lack of jurisdiction and time-barred demands. The appeal pertaining to Sl. No. 5 was remanded for de novo consideration to determine the correct classification of the goods. The importers were not entitled to the benefit of Customs Notification No. 208/81 for any of the consignments.

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