2022 (5) TMI 745 - AT - Customs

Benefit Exemption from duty - imported goods Skin Barriers Micropore Surgical Tapes or not - denial of benefit on the ground of incorrect understanding of the product name Wafer and held that they are not Skin Barriers Micropore Surgical Tapes - extended period of limitation - penalty - N/N. 21/2002-Cus dated 1.3.2002 at Sr. No. 363 (A) - HELD THAT - The issue is no longer res integra as being decided by the Bangalore Bench in the case of 3M INDIA LTD SHRI KULVEEN SING BALI SHRI M.S. SWAMINATHAN VERSUS COMMISSIONER OF CUSTOMS BANGALORE-I 2020 (7) TMI 93 - CESTAT BANGALORE . It has also been brought to notice that the same has been upheld by the Apex Court. Therefore the decision of the Bangalore Bench has attained finality and further process by the decision of Tribunal in the case of M/S. SUTURES INDIA P. LTD. VERSUS COMMISSIONER OF CENTRAL CUSTOMS CHENNAI 2019 (4) TMI 538 - CESTAT CHENNAI cannot be relied upon. It is found that the appellants have submitted that there has been a punctuation error in the notification giving rise to an interpretation that the exemption is not applicable in the impugned goods. It is found that any such error in the notification if any should have been brought to the notice of the concerned authorities and got corrected. This Tribunal being a creature of statute cannot sit in judgment on interpretation of a notification or the purport of the notification. However the Bench is not Writ Court to decide the property of the notification being creature of the statute. This Bench has no jurisdiction to interpret the intention of the notification. In the case of 3M INDIA LTD SHRI KULVEEN SING BALI SHRI M.S. SWAMINATHAN VERSUS COMMISSIONER OF CUSTOMS BANGALORE-I 2020 (7) TMI 93 - CESTAT BANGALORE Tribunal has discussed the issue at length and observed that the product named Skin Barriers Micropore Surgical Tapes exists and to that extent the arguments of the appellants are not acceptable. The arguments of the appellants are not acceptable and it is held that the exemption is not available to them. Time Limitation - suppression of facts or not - penalty - HELD THAT - The appellants have successfully demonstrated that the imports have been taken place over the years and Department has been allowing the same after examination atleast in respect of few consignments even after the introduction of self assessment regime. Under these circumstances it cannot be held that the appellants have suppressed or mis-represented any material fact so as to warrant the invocation of extended period. For this reason it is found that impugned orders are not maintainable as far as the limitation is concerned. Accordingly it is held that penalty cannot be imposed on the appellants. All the appeals filed by the parties are partly allowed confirming the demand of duty for the normal period and setting aside the penalties imposed on the appellants.

Summary

Issues Involved:
1. Eligibility of "Skin Barriers Micropore Surgical Tapes" for exemption under Notification No. 21/2002-Cus dated 1.3.2002.
2. Invocation of the extended period of limitation.

Issue-wise Detailed Analysis:

1. Eligibility for Exemption:
- Background: The appellants have been importing "Skin Barriers Micropore Surgical Tapes - Leukopor" under Customs Tariff Heading 30059060 and availing exemption under Notification No. 21/2002-Cus dated 1.3.2002. The Department initially allowed the imports without objection but issued show-cause notices in 2011 to deny the exemption and recover differential duty.
- Arguments by Appellants: The appellants argued that the adjudicating authority misunderstood the product name "Wafer" and incorrectly concluded that the imported goods were not "Skin Barriers Micropore Surgical Tapes." They claimed a punctuation error in the notification, asserting that "Skin Barriers" and "Micropore Surgical Tapes" are distinct products.
- Precedents Cited: The appellants cited favorable judgments from Sutures India Pvt. Ltd. vs. Commissioner of Customs (2019) and argued against the applicability of the 3M India Ltd. vs. Commissioner of Customs (2020) decision, which was upheld by the Supreme Court.
- Tribunal's Findings: The Tribunal referred to the 3M India Ltd. case, which established that "Skin Barriers Micropore Surgical Tapes" exist as a product. The Tribunal concluded that any punctuation error in the notification should have been addressed by the concerned authorities. The Tribunal cannot interpret the notification's intention or supply omissions. The decision in 3M India Ltd. was deemed final and binding, thus the appellants' goods were not eligible for the exemption.

2. Invocation of Extended Period of Limitation:
- Arguments by Appellants: The appellants contended that they had been importing the goods since 1993 with consistent descriptions in the Bill of Entry, and the Department had allowed exemptions over the years. They argued that there was no mis-declaration or suppression of facts, and the extended period could not be invoked due to their bona fide belief in the exemption's applicability.
- Precedents Cited: The appellants relied on various judgments, including Sirthai Superware India Ltd. vs. Commissioner of Customs (2020), Vesuvius India Ltd. vs. Commissioner of Customs (2019), and Northern Plastics (1998), to support their contention against the invocation of the extended period.
- Tribunal's Findings: The Tribunal acknowledged that the imports had been consistently allowed by the Department over the years, even after the introduction of the self-assessment regime. Therefore, it could not be held that the appellants suppressed or misrepresented any material fact. Consequently, the invocation of the extended period was not justified, and penalties could not be imposed.

Conclusion:
- The appeals were partly allowed. The demand for duty was confirmed for the normal period, but penalties imposed on the appellants were set aside. The appeals filed by the Revenue were disposed of accordingly.