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M/s Escorts Heart Institutes And Research Centre, Mr. Bhuvander Kaul, M/s J Mitra And Brothers, M/s Elecon Cargo Pvt Ltd Versus Commissioner of Customs (Import And General) , New Delhi

2016 (4) TMI 440 - CESTAT NEW DELHI

Demand of Interest - Section 28 of the Customs Act, 1962 - Import of "IS 1000 fibre-optic endoscope surgical system" classifying under Customs Tariff Heading 9018.90 and claimed benefit of concessional rate of duty @ 5% - Adjudicating Authority held mis-declaration of goods and denied benefit of exemption Notification - Held that:- no interest under section 28AB ibid is recoverable because the demand has not raised/confirmed under Section 28 ibid, adding that even if the impugned order is taken .....

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at:- the Show Cause Notice did not raise the demand in terms of Section 28 ibid. The wording of Section 114A ibid makes it expressely clear that penalty under that Section is attracted when liability to pay duty or interest is determined under Section 28 ibid. Thus, penalty under section 114A ibid is simply not attracted. - Imposition of penalty - Section 112 of the Customs Act, 1962 - Held that:- by following the judgment of Delhi High Court in the case of CC (I&G) Vs. Care Foundation [2014 .....

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to the fact that penalty on M/s. J. Mitra & Bros, (who was also aware of the mis-declaration and was part of the plan to mis-declare the impugned goods) has been reduced by us from ₹ 5 lakhs to ₹ 1 lakh, the same principle has to be followed in the case of Mr. Bhuvander Kaul also. - As regards the penalty on the CHA, (M/s Elecon Cargo Pvt. Ltd.), it filed a Bill of Entry on the basis of the documents made available to it by the importer and it had duly enclosed the supplier's inv .....

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SC/56008 And 57005/2013-CU[DB], Appeal Nos. C/597,598,512 And 549/2007-CU[DB] - Final Order Nos. C/A/50921-50924/2016-CU(DB) - Dated:- 17-2-2016 - G. Raghuram, President And R. K. Singh, Member (T) For the Appellants : Mr B L Narasimhan, Mr Prabhat Kumar, & Mr Jaspreet Singh, Advs For the Respondent : Mr Amresh Jain, DR ORDER Per R. K. Singh These appeals have been filed against order in original dated 08.06.2007 in terms of which the Commissioner passed the following order:- (i) The correct .....

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ential amount of duty of ₹ 3,47,63,531/- was ordered to be recovered from M/s. Escorts along with interest thereon under Section 28AB of the Customs Act, 1962. (iv) Confiscation of the impugned goods - Da Vinci surgical system valued (assessable value ) at ₹ 7,59,02,909/- under Section 111(m) of the Customs Act, 1962 for mis-declaration of the impugned goods was ordered. However an option was given to redeem the same on payment of fine of ₹ 75 lakhs in lieu of confiscation unde .....

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of ₹ 5 lakhs under Section 112(a) ibid was imposed on M/s. J Mitra & Bros was imposed for its active role in the mis-declaration of the description of the impugned goods. (viii) Penalty of ₹ 1 lakh under Section 112(a) ibid was imposed on M/s. Elecon Cargo Agency, the CHA was imposed for its active role in mis-declaration of the description of the impugned goods. 2. The facts of the case, briefly stated, are as under:-The appellant M/S Escorts Heart Institute and Research Centre .....

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uipment, concessional rate of customs duty at the rate of 5% was claimed under Serial No. 363 (B) - List 37 - Item No. 82 of the said Notification. The adjudicating authority observed that the invoice of the supplier described the goods as "Endoscopic Intuitive IS 1000 da vinci Surgical System11 and based on this and the other evidence collected held that appellant No. 1 was guilty of mis-declaration and denied the benefit of the said exemption Notification and passed the order quoted above .....

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i.-Del.)] and also by the judgement of Delhi High Court in the case of CC (I&G) Vs. Care Foundation [2014 (302) ELT 181 (Delhi)], The Ld advocate however contended that no interest under section 28AB ibid was recoverable because the demand was not raised/confirmed under Section 28 ibid, adding that even if the impugned order is taken to be issued in the context of finalisation of the provisional assessment under section 18 ibid no interest can be demanded as the provision for interest liabil .....

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s (Appellant No. 2) put forth various contentions to claim that penalty was not imposable upon it but fairly conceded that in similar circumstances in the case of similar imports by Care Foundation, after taking into account similar contentions, the penalty upon it had been upheld by CESTAT which was further upheld by Delhi High Court vide order dated 11.10.2013 except that the Delhi High Court reduced the penalty from 25 to ₹ 5 lakhs. Following the same ratio, the appellant pleaded that t .....

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d not be held guilty of any abetment. He cited a few judgements in support of this proposition which will be referred to later. 6. Per contra, Ld. Departmental Representative stated that the demand was in effect confirmed under Section 28 ibid and therefore interest was clearly leviable under Section 28 AB ibid on the impugned differential demand confirmed. It also argued that if penalty under Section 114 A is not held to be leviable then the penalty under Section 112 ibid would get revived. As .....

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Double Storey Market, New Rajinder Nagar, New Delhi & M/s. Elecon Cargo Agency, N-264-270, Raghubir Nagar, New Delhi are hereby called upon to show cause to the Commissioner of Customs (Import & General), New Custom House, Near IGI Airport, New Delhi-110037 as to why:- (i) The correct description of the goods imported under Bill of Entry No. 389879 dated 28.10.2002 should not be treated as IS 1000 da Vinci Surgical System" and not as "Fibre Optic Endoscope". (ii) The Bill .....

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assessable value of ₹ 7,59,02,909 should not be confiscated under section 111 (m) of the Customs Act, 1962 for mis-declaration of description. (iv) Why penal action should not be taken against M/s. Escorts Heart Institute & Research Centre Limited, Shri Bhuvander Kaul, M/s. J. Mitra & Bros and M/s. Elecon Cargo Agency under section 112a)/114A of the Customs Act, 1962 for their respective active roles in the mis-declaration of the description of the goods in violations of the provis .....

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ms interest under provisions of Section 28AB ibid. Perusal of Section 28 AB ibid as it existed during the relevant period leaves no scope for ambiguity that the interest thereunder is chargeable only when the demand has been confirmed under provisions of section 28 ibid. Even if it is considered that the demand arises out of finalisation of provisional assessment in terms of Section 18 ibid, it has been settled by judicial pronouncements that no interest is recoverable on finalisation of provisi .....

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lar view is held in the case of C.C.(Prev.) Vs. Goyal Traders - 2014 (302) ELT 529 (Gujarat). 8. It is evident from the foregoing analysis that the Show Cause Notice did not raise the demand in terms of Section 28 ibid. The wording of Section 114A ibid makes it expressely clear that penalty under that Section is attracted when liability to pay duty or interest is determined under Section 28 ibid. Indeed, in the case CC (I&G) Vs. Care Foundation (supra), involving similar facts and circumstan .....

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warranted in the circumstances, does not appear to be in error of law. For these reasons the Court is of the opinion that the question of law framed has to be answered against the revenue and in favour of the assessee." Thus in the facts and circumstances of the present case, penalty under the section 114 A ibid is simply not attracted. The above quoted para of the Delhi High Court judgement also deals with Revenue's contention regarding penalty under Section 112 ibid which we (have to) .....

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ellant No. 2 that as the facts and circumstances of the present case are similar to those obtaining in the case of M/s. Care Foundation and its role in that case was similar to its role in the case of imports by the appellant No.1, the penalty imposed should be reduced in the same ratio to ₹ 1 lakh. 10. As regards penalty on Mr. Bhuvander Kaul, Dy. General Manager (Medical Materials), it is clearly brought out in the impugned order that he was the one looking after the import of the said e .....

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