2019 (7) TMI 582 - AT - Customs

Concessional rate of duty - N/N. 21/2002-Cus dated 1-3-2002 - Denial of benefit of notification along with imposition of consequential interest and penalty much after clearance of goods by invoking extended period - HELD THAT - Though D.C. Defibrillators can be interchangeably used as internal or external D.C. Defibrillators, the very fact that paddles were imported along with it as it is necessary accessory, when put to use, the imported goods can be put in the category of the internal D.C. Defibrillators for which exemption notification is applicable. In the instant case not only Bill of entry, accessories attached to D.C. Defibrillators clearly reveal that the said machinery was imported for internal use for which exemption notification is rightly applicable - we refrained ourselves from discussing on the issue pertaining to applicability of extended period on the ground of mis-declaration etc. and legality of order of Commissioner (Appeals) dropping redemption fine. Appeal disposed off.

Summary

Issues:
Denial of benefits of concessional rate of duty under notification No. 21/2002-Cus dated 1-3-2002, imposition of consequential interest and penalty after goods clearance, challenge to redemption fine imposed by Commissioner of Customs (Appeals), Mumbai-III, and appeal by Revenue Department against setting aside of redemption fine.

Analysis:
The case involved the denial of benefits of concessional duty rate under notification No. 21/2002-Cus, imposition of interest and penalty post goods clearance, and challenges to redemption fine. The appellant, an importer, had imported D.C. Defibrillators with the benefit of exemption notification, which was later investigated by the special branch. The appellant made a deposit of differential duty amount but received a show cause notice proposing further duty, interest, confiscation, and penalties. The matter was adjudicated upon, confirming duty demand, interest, penalty, and confiscation. The appellant appealed, contesting the confirmation order, while the Revenue Department challenged the dropping of redemption fine.

The Tribunal considered submissions and case records, including the judgment in BPL v. Commissioner of Central Excise, Cochin-II. The key issue revolved around the interpretation of "internal use" concerning D.C. Defibrillators. The appellant argued that the goods were meant for internal use based on the presence of paddles, a necessary accessory for correcting irregular heartbeats in critical situations. The Tribunal analyzed the term "internal use" in light of the BPL case, emphasizing the distinction between internal and external usage based on the presence of paddles and the intended purpose of the device.

The Tribunal concluded that the imported goods, accompanied by paddles, qualified as D.C. Defibrillators for internal use, making them eligible for the exemption notification. The judgment highlighted the importance of accessories and the intended use of the machinery in determining its classification. As a result, the Tribunal allowed the importer's appeal, setting aside the Commissioner (Appeals) order, while dismissing the Department's appeal. The decision focused on the specific characteristics of the imported goods and their alignment with the criteria for concessional duty rates under the relevant notification.

In summary, the judgment addressed the nuanced interpretation of "internal use" in the context of imported D.C. Defibrillators, emphasizing the significance of accessories and intended functionality in determining the applicability of concessional duty rates. The decision provided clarity on the classification of the goods based on their features and usage, ultimately ruling in favor of the importer and against the Revenue Department's appeal.