2013 (10) TMI 807 - AT - Customs

Waiver of pre deposit - Import of Sterile Absorbable Haemostatic material as life saving bandages and claiming exemption in terms of notification No. 21/02-Cus - Held that - both the sides have relied upon the certificate of the experts in the field. Whereas some of the certificates are in favour of the assessee and the others are against them. We have also seen the technical material on record placed by the appellant which prima facie tilt the evidence in favour of the assessee. The appellants have also assailed the impugned order on the point of limitation by submitting that they have been making the imports of the said products right from 2001 and were availing the benefit of notification which was being allowed by the Revenue authorities and as such, there was no malafide, suppression or mis-statement on their part so as to justifiably invoke the longer period of limitation - issue of exemption requires consideration of lot of technical opinion on the evidence, which can be gone through only at the time of final disposal of appeal. However, we are, prima facie with the appellants on the point of limitation. Learned advocate informs us that total demand falling within the limitation period is around 5.83 lakhs. Since the issue on merits is contentious and arguable and on limitation we find prima facie favour with the appellant, we direct the appellant-applicant to deposit a small amount of Rs.2,50,000 as a condition of hearing of their appeal within a period of 8 weeks from today and report compliance on 5.8.2013.. - stay granted partly.

Summary

Issues:
1. Interpretation of exemption notification for Sterile Absorbable Haemostatic material.
2. Determination of whether the imported product qualifies as a life-saving bandage.
3. Consideration of technical opinions and evidence in favor of the appellant.
4. Assessment of the limitation period for invoking demands and penalties.

Analysis:
1. The case involved a dispute regarding the classification of imported Sterile Absorbable Haemostatic material under a specific exemption notification. The appellant claimed exemption under Notification No. 21/02-Cus. for control of surgical vessel bleeding.

2. The appellant imported the product, declaring it as life-saving bandages and benefiting from the exemption since 2001. However, subsequent investigations challenged this classification, leading to show cause notices proposing demand confirmation and penalties for imports between 2007 to 2011.

3. The central issue revolved around whether the appellant's product qualified as absorbable haemostatic for surgical vessel bleeding control, thus deserving the exemption. Expert opinions from medical professionals were presented by both sides, with conflicting views on the product's classification.

4. The Tribunal acknowledged the technical complexity of the matter and the need for a detailed examination during the final appeal disposal. Notably, the Tribunal found prima facie merit in the appellant's argument regarding the limitation period, considering the consistent benefit availed by the appellant and the absence of malafide intent.

5. As a result, the Tribunal directed the appellant to deposit a partial amount as a condition for hearing the appeal, recognizing the contentious nature of the merit issue. The pre-deposit of the remaining duty amount and the penalty was waived, with recovery stayed during the appeal proceedings, indicating a favorable interim decision for the appellant.

6. Ultimately, the Tribunal's decision balanced the technical complexities of the case with considerations of limitation and procedural fairness, providing a temporary relief to the appellant pending the final resolution of the appeal.