TMI Blog2023 (9) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... were cleared under Zero Duty EPCG Scheme. The assessee has also referred to the decision of the Hon ble Apex Court in the case of PRATIBHA PROCESSORS VERSUS UNION OF INDIA [ 1996 (10) TMI 88 - SUPREME COURT] wherein it was held that when goods at the time of removal from warehouse are wholly exempted from payment of duty the liability to pay interest is solely dependent upon the exigibility or actual liability to pay duty. Though the above decision was rendered on the issue of demand of interest in respect of warehouse goods, same analogy can be drawn to resolve the issue in the present appeal as the assessee has not paid any duty on clearance of the impugned equipment - the fact is also noted that DGFT authority has permitted amendment of the EPCG authorisation issued providing for debit of differential duty demanded. As such, the interest is not demandable. So, the appeal filed by the Revenue is rejected. The confiscation of impugned goods is not justified and so redemption fine and penalty imposed are set aside. The appeal of the assessee is allowed and the Revenue s appeal on demand of interest on the differential duty arisen due to revision of classification is rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Eclipse Treatment Planning System ---NA-- 90221490 7 5507937/ 04.06.2016 KV Imager ---NA-- 90221490 2.2 It appeared that as per the declaration made in the corresponding invoices, the goods were supplied in Partial Shipments. The assessee/importer self-assessed the goods covered under the Bills of Entry and classified them under CTH 90229030 and 90221490. For the goods clasified under CTH 90229030, the assessee paid Basic Customs Duty at the concessional rate of 5% by claiming exemption under Notification No. 12/2012-Cus at Sl.No. 473 and also claimed duty exemption from Special Additional Duty (SAD) of 4% under Notification No. 021/2012-Cus at Sl.No. 95. For the goods under CTH 90221490, the assessee did not claim any exemption from duty. 2.3 Sl.No. 473 of the Notification No. 12/2012-Cus dated 17.03.2012 covers goods required for medical, surgical, dental or veterinary use classifiable under some specific sub-headings and 90229030 is one such sub-heading. Likewise, Sl.No. 95 appended to Notification No. 12/2012-Cus dated 17.03.2012 covers goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods were examined on first check basis by Customs House, Chennai. After detailed examination, classification of these goods was settled by the Department under Tariff Item 90229030. The assessee followed the same as both these consignments were cleared by the same CHA. There was no intention or deliberate action on the part of the assessee to evade payment of duty. 5.1 On merits, the assessee submitted that even if the imported goods are classifiable under CTH 90221490 as alleged, no differential duty would be payable in cash as the goods were imported under zero duty EPCG Scheme. The assessee submitted that, at best, they can be fastened with additional Export Obligation, which, in any case can be achieved by the assesee, as evidenced by their track record. The Board Circulars Nos. 24/2002-Cus dated 06.05.2002 and 46/2004-Cus dated 26.07.2004, were relied upon by the assessee to contend that the customs authorities should not take unilateral action in case of imports under EPCG Scheme and instead should take up the matter with DGFT for making corrective measures such as enhancement of CIF value of imports in the EPCG licence and the quantum of export obligation. 5.2 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne set of High Speed Linear Accelerator True Beam STX with HD 120 millenium system with accessories, Base Frame Universal, Pre-installation and Main circuit Breaker, MV and KV Imager, ARIA Oncology Information System and Eclipse TPS covered under Bills of Entry Nos. 4814028 dated 06.04.2016. 5499796 dated 03.06.2016 and 5507937 dated 04.06.2016, totally valued at Rs.28,62,62,235/- (Rupees Twenty Eight Crore Sixty Two Lakh Sixty Two Thousand Two Hundred and Thirty Five only) liable for confiscation under Section 111(m) of customs Act, 1962. I impose Redemption fine of Rs.10,00,000/- (Rupees Ten Lakh Only) in lieu of confiscation of the goods under Section 125 of the Customs Act, 1962. F. I impose penalty of Rs.10,00,000 (Rupees Ten Lakh only) o M/s. MIOT Hospitals Pvt. Ltd. under Section 112(a) ibid. as per proviso to Section 112 (ii); Provided that where such duty 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 communication of the order of the proper officer determining such duty, the amount of penalty liable to be paid but such person under this section shall be twenty- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority has held that the goods are liable for confiscation only because of the wrong classification adopted by the assessee. The assessee was under bona fide belief that the goods are classifiable under CTH 90229030. Moreover, identical goods imported by M/s. Nagarjuna Hospitals Limited from the same suppliers under Bill of Entry dated 18.03.2016 was classified under the same heading and cleared through Custom House, Chennai. It is argued by the Ld. counsel that classification is an interpretational issue and no mens rea can be attributed upon the assessee especially when assessee has adopted correct classification for certain goods. The decision in the case of Northern Plastic Ltd. vs. Commissioner of Customs [1998(101) ELT 549 (SC)], was relied by the Ld. counsel to argue that claiming the benefit of exemption on a particular classification under the Bills of Entry does not amount to mis-declaration under Section 111(m) of the Customs Act, 1962. In the case of Aureole Inspecs India Pvt. Ltd. Vs. Commissioner of Customs [2023 (8) TMI-565-CESTAT NEW DELHI] it was held by the Tribunal that imported goods do not become liable to confiscation under Section 111(m) merely on the ground t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee does not intend to raise the said plea in regard to this appeal before this forum or any other forum. The assessee has filed an affidavit to this effect. 10. The Ld. Authorised Representative Shri R. Rajaraman appeared and argued for the Revenue. It is submitted that the original authority has erroneously waived the demand of interest in regard to Bills of Entry dated 03.06.2016 and 04.06.2016. The wrong classification of the goods would not have come to light but, for the investigation done by the DRI. Therefore, the confiscation of the goods and the redemption fine and penalties imposed are legal and proper. 11. We have considered the submissions made by both sides and have gone through all the documents and records as available in these appeals. 12. The facts indicate the assessee has imported Radiotherapy Apparatus, viz., Linear Accelerator True Beam STX with Accessories under zero duty EPCG Scheme. The assessee has classified the goods under Customs Tariff Heading 90229030 which enables to avail exemption under Customs Notification Nos. 021/2012 Sl.No. 473 and 021/2012 Sl.No. 95. On the basis of investigation conducted by DRI, Zonal Unit, Mumbai, the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of value or in any other particular] with the entry made under this Act or in the case of baggage with the declaration made under section 77 2[in respect thereof or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54]; 16.2 This provision enables confiscation of improperly imported goods where there is mis-declaration as to any particulars as to their value, Classification, etc., as mentioned in the Bill of Entry filed. In this case, the assessee has provided all the details relating to the imported equipment / apparatus and revising the classification by the Revenue would not result in attributing any motive to the assessee for wrong classification as the imported goods were cleared under Zero Duty EPCG Scheme. The assessee s contention that identical goods were imported by M/s. Nagarjuna Hospital Limited which were examined on first check and cleared, adopting the classification under CTH 90229030 will also clearly indicate that there is no motive for adopting a particular classification of the imported goods under Zero Duty EPCG Scheme. A perusal of the authorisation issued und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act, 1962 as the assessee has declared all the details and the value of the imported goods in the Bill of Entry filed. As such, we have to hold that confiscation of the imported goods is not justified, and so, set aside. Consequently, the fine imposed is also ordered to be set aside. 18.1 Regarding Department s appeal for not confirming the demand of interest under Section 47 (2) of the Customs Act, 1962, the lower adjudicating authority has not given any reasons for such waiver. The only reason that can be inferred is that the imports of the goods were cleared under Zero Duty EPCG Scheme. The assessee has also referred to the decision of the Hon ble Apex Court in the case of Pratibha Processors Vs. Union of India [1996 (88) ELT 12 (SC)] wherein it was held that when goods at the time of removal from warehouse are wholly exempted from payment of duty the liability to pay interest is solely dependent upon the exigibility or actual liability to pay duty. 18.2 The assessee has utilized the authorisation issued under EPCG Scheme and not paid any duty on the clearance of the imported medical equipment. We rely upon the Hon ble Apex Court s decision which has ruled when suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of duty on removal from the warehouse, one cannot be saddled with the liability to pay interest on a non-existing duty. Payment of interest under Section 61(2) is solely dependent upon the exigibility or factual liability to pay the principal amount, that is, the duty on the warehoused goods at the time of delivery. At that time, the principal amount (duty) is not payable due to exemption. So, there is no occasion or basis to levy any interest, either. We hold accordingly. 19. Though the above decision was rendered on the issue of demand of interest in respect of warehouse goods, same analogy can be drawn to resolve the issue in the present appeal as the assessee has not paid any duty on clearance of the impugned equipment. We take note of the fact that DGFT authority has permitted amendment of the EPCG authorisation issued providing for debit of differential duty demanded. As such, we have to hold that interest is not demandable. So, the appeal filed by the Revenue is rejected. 20. To sum up, we hold that the confiscation of impugned goods is not justified and so redemption fine and penalty imposed are set aside. The appeal of the assessee is allowed and the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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