2013 (10) TMI 998 - AT - Customs

Benefit of Notification No.21/2002 Concessional Rate of Duty - import of Hypoallergenic Surgical Adhesive Tapes as Skin Barrier Microporous Surgical Tapes - sale as General Purpose Surgical Tape - Extended Period of Limitation Waiver of Pre-deposit Assessee contended that the Samples were drawn and on the basis of those samples, benefit of Notification No.21/2002 was extended - As there was no test report on record on the goods, the benefit of Notification cannot be denied to the applicants - the extended period of limitation cannot be invoked in the absence of any test report - Held that - Prima facie we are of the view that when samples have been drawn and have not sent for testing, in that case, inference cannot be drawn on the basis of mere research - In that view, the extended period of limitation was not invocable - the applicants have made out a prima facie case for waiver of pre-deposit - Accordingly, we waive the requirement of pre-deposit of the entire amount of differential duties, interest and penalties and stay recovery thereof during the pendency of the appeals.

Summary

Issues involved: Misdeclaration of imported goods, applicability of Notification No.21/2002, extended period of limitation, waiver of pre-deposit.

Analysis:
1. Misdeclaration of imported goods: The case involved the import of "Hypoallergenic Surgical Adhesive Tapes" misdeclared as "General Purpose Surgical Tape" instead of "Skin Barrier Microporous Surgical Tapes" used for ostomy cases. The misdeclaration was uncovered during an investigation by D.R.I. officers, leading to Show Cause Notices and confirmed demands.

2. Applicability of Notification No.21/2002: The applicants argued that they availed the benefit of Notification No.21/2002, which provides concessional rates of duty for imported goods used for specified purposes. They contended that as samples were drawn at the time of import, the Notification's benefit should not be denied in the absence of a test report on the goods.

3. Extended period of limitation: The applicants further argued against invoking the extended period of limitation due to the lack of a test report on record for the goods in question. They emphasized that without a test report, the inference cannot be based solely on research findings.

4. Waiver of pre-deposit: After hearing the arguments, the Tribunal found that the applicants had made a prima facie case for waiver of pre-deposit. The Tribunal held that when samples were drawn but not tested, the extended period of limitation could not be invoked. Consequently, the Tribunal waived the requirement of pre-deposit for the entire amount of differential duties, interest, and penalties, staying the recovery during the appeal's pendency.

In conclusion, the Tribunal consolidated all related matters for final hearing and directed the Registry accordingly. The judgment highlighted the importance of proper testing and documentation in determining the applicability of notifications and the invocation of the extended period of limitation in cases of misdeclaration of imported goods.