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TMI Blog2017 (2) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... ious specific types of endoscopes. It claimed concessional duty @ 5% for accessories of the equipment under Serial No. 363 (B) - List 37 - Item No. 82 of the said Notification. The assessee was issued a Show Cause Notice on 27th September 2004, to show why the goods, assessed provisionally, should not be finally assessed at the normal rate of customs duty @ 25% + 16% + 4% (effective 50.8%) by denying the benefit of claimed Customs Notification No.21/2002-S.No.363(A) and the differential duty amounting to Rs. 3,47, 63, 531 should not be recovered from M/s. Escorts Heart Institute & Research Centre Limited along with interest.....(iii) The subject goods, i.e. "da Vinci Surgical System" of the declared assessable value of Rs. 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 112(a)/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 provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 114A. It is in these circumstances that the Revenue has appealed to this court. 5. It is contended on behalf of the Revenue by Mr. Sanjeev Narula, that in Care Foundation (supra), the judgment was premised on peculiar facts. Counsel highlighted that the court, in that judgment, held that, "no exception can be taken to finding that since there was no demand under section 28 (8) of the Customs Act for duty, no penalty could have been imposed under that provision and consequently the penalty under Section 114A was not sustainable. The further reasoning that there could have been penalty under Section 112 but since that provision was not invoked, the direction to pay penalty at Rs. 2.34 Crores was not 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 assessees". It is submitted that in the present case, Section 112 (a) of the Act was invoked in the Show Cause Notice. If CESTAT was of view that penalty under Section 114A of the Customs Act, 1962 was not leviable then penalty Section 112 (a) of the Act should have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 037 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 of Entry No.389879 dated 28.10.2002, which was assessed provisionally, should not be finally assessed at the normal rate of customs duty @ 25% + 16% + 4% (effective 50.8%) by denying the benefit of claimed Customs Notification No.2112002-5.No.363(A) and the differential duty amounting to Rs. 3,47, 63, 531 should not be recovered from Mis. Escorts Heart Institute & Research Centre Limited along with interest. (iii) The subject goods i.e. "da Vinci Surgical System" of the declared assessable value of Rs. 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 Mis. Escorts Heart Institute & Research Centre Limited, Shri Bhuvander Keul, Mis. J. Mitra & Bros and Mis. Elecon Cargo Agency under section 112a)1114A of the Customs Act, 1962 for their respective active roles in the misdeclaration of the description of the goods in violations of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was not invoked, the direction to pay penalty at Rs. 2.34 crores was not 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 114A ibid is simply not attracted. The above quoted para of the Delhi High Court judgment also deals with Revenue's contention regarding penalty under Section 112 ibid which we (have to) respectfully follow. 9. For similar role of appellant No.2 in the case of import of the same item by M/s. Care Foundation (supra) involving similar facts and circumstances, and after considering similar contentions put forth by it, CESTAT upheld the penalty on it. In that case, the Delhi High Court vide its judgment dated 11.03.2014 in Customs Appeal No.9/2013 also upheld the appellant liable to penalty but reduced the same from Rs. 25 lakhs to Rs. 5 lakhs. We are persuaded by the contention of appellant No. 2 that as the facts and circumstances of the present case are similar to those obtaining in the case of M/s. Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (8) of section 28 shall also be liable to pay a penalty equal to the duty or interest so determined : Provided that where such duty or interest, as the case may be, as determined under sub- section (8) of section 28, and the interest payable thereon under section 28AA, is paid within thirty days from the date of the communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the duty or interest, as the case may be, so determined : Provided further that the benefit of reduced penalty under the first proviso shall be available subject to the condition that the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso : Provided also that where the duty or interest determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty or interest as reduced or increased, as the case may be, shall be taken into account : Provided also that in case where the duty or interest deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide Bill of Entry No, 389879 dated 28,10.2002 was not a "fibre optic endoscope" but was a state of the art "Robotic Surgical System" and that the said Robotic Surgical System can be used to perform complex surgeries with unprecedented control and precision. The endoscope Is just a small part of the said complex "Surgical System" and is used for viewing the inner portion of the body while the surgeon is carrying out the minimum invasive surgery through the sophisticated robot and the programmed computer. 42. It has also been noticed that the All India Institute of Medical Sciences (AIIMS), New Delhi had also imported the same system from the same supplier and had filed Bill of Entry No. 506592 dated 21.6.2003 for the clearance of the same equipment, It Is noticed that the AIIMS had cleared the system by correctly describing the goods as Surgical Robotic System for Cardiac Surgery". However, AIIMS had claimed the benefit of concessional rate of duty of 5% under Notification no. 51/96 and not under Notification no. 21/2002 claimed by M/s Escorts. 43. It has been noticed that a letter EHIRC/JVIED:EQPT/IMP/098 dated 28.10.2002 signed by Dr; Naresh Trehan, Executive Director, M/s Escor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Vinci surgical system and what had been supplied as per the invoice was also da Vinci Surgical System and not an Endoscope as defined in various dictionaries. As such, mentioning the said item as "IS 1000 Fibre Optic Endoscope Surgical System and Accessories" in the Bill of Entry was a misdeclaration. Those findings have been accepted; they were unchallenged. The only issue, therefore, is whether the penalty levied under Section 112 (a) or Section 114A could have been interfered with. In this context, it is noticed that the Show Cause Notice had proposed confiscation of goods under Section 111 (m). Besides, it also stated as follows: "(v) Why penal action should not be taken against M/s Escorts Heart Institute & Research Centre Limited, Shri Bhuvannder Kaul, M/s J. Mitra & Bros and Mis Elecon Cargo Agency under section 112(a) I 114A of tile Customs Act, 1962 for their respective active roles in the mis-declaration of tile description of the goods in violations of the provisions of the Customs Act, 1962." These facts, clearly distinguish the present case from those in Care Foundation (supra), where the Show Cause Notice did not invoke Section 112; the penalty was therefore set a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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