2012 (10) TMI 728 - AT - Customs

Demand of duty, interest and penalty import of medical equipment - importer claimed Customs duty under Notification No. 64/88-Cus., - Held that - Appellants are eligible for benefit of Notification No. 65/88-Cus., - Notification No. 65/88-Cus., grants exemption not only from the basic Customs duty but also from the Additional Duty of Customs (CVD) leviable under Section 3 of the Customs Tariff Act - when CVD is exempted, there is no liability to pay special excise duty. The Commissioner, while quantifying the duty liability, has not granted any benefit in respect of special excise duty - entire quantification confirmed by the adjudicating authority is totally incorrect and the matter has to be remanded back to the adjudicating authority for correct quantification.

Issues:
1. Interpretation of Customs duty exemption under Notification No. 65/88-Cus.
2. Computation errors in the duty demand.
3. Applicability of auxiliary duty and special excise duty exemptions.
4. Correct quantification of duty liability.
5. Granting of waiver from pre-deposit of dues.

Analysis:

Issue 1: Interpretation of Customs duty exemption under Notification No. 65/88-Cus.
The case involved an appeal against an order demanding Customs duty on imported medical equipment. The appellant claimed duty exemption under Notification No. 64/88-Cus. and produced a Customs duty exemption certificate. However, the certificate was later canceled, leading to a demand for duty, interest, and penalties. The Tribunal previously upheld the duty demand but set aside the interest and penalties. The appellant filed a miscellaneous application for rectification, claiming eligibility for duty exemption under Notification No. 65/88-Cus., which was overlooked. The Commissioner found the appellant eligible under this notification and ordered duty recovery. The appellant contested this order.

Issue 2: Computation errors in the duty demand.
The appellant argued that the adjudicating authority made errors in computing the duty demand. They pointed out that goods exempt under Notification No. 65/88-Cus. are also exempt from auxiliary duty and special excise duty. However, the Commissioner did not consider these exemptions in the duty calculation. The appellant contended that demanding duty under Section 125(2) for confiscated goods, without granting exemptions, was incorrect. They sought a waiver from pre-deposit of dues and a stay on recovery.

Issue 3: Applicability of auxiliary duty and special excise duty exemptions.
The Commissioner failed to extend the benefits of exemptions accruing under Notification No. 65/88-Cus. The notification exempted goods not only from basic Customs duty but also from Additional Duty of Customs (CVD) and special excise duty. The duty liability quantification did not consider the exemption from special excise duty when CVD was exempted. The Tribunal directed the appellant to pay Basic Customs Duty and remanded the matter for correct quantification by the adjudicating authority.

Issue 4: Correct quantification of duty liability.
The Tribunal found the quantification confirmed by the adjudicating authority to be incorrect due to the failure to grant exemptions correctly. It ordered a remand for the correct determination of duty liability after the appellant pays the Basic Customs Duty.

Issue 5: Granting of waiver from pre-deposit of dues.
The appellant requested a waiver from pre-deposit of dues, arguing that there was no risk to Revenue as the goods were under the custody of Customs. The Tribunal disposed of the appeal and stay application by remanding the matter for correct quantification of duty after the appellant pays the Basic Customs Duty.

This detailed analysis highlights the key legal and procedural aspects of the judgment, focusing on the interpretation of Customs duty exemptions, computation errors, applicability of exemptions, correct quantification of duty liability, and the granting of a waiver from pre-deposit of dues.

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