BPL LTD. Vs. COMMISSIONER OF CUSTOMS, CHENNAI

JUDGEMENT

(1.) M /s. BPL Ltd., Bangalore imported insulated electric cable lengths and cleared the same as patient cables claiming as components for manufacture of ECG taking benefit of Notification No. 165/86 -Cus. as amended. The Notification No. l65/86 -Cus. provides concessional rate of duty to components of ECG machine when imported into India for manufacture of ECG equipment. The appellants wilfully suppressed the facts about the excess quantity of cables imported and used in the manufacture of patient cable assemblies, which were subsequently sold as replacements/warranty spares. Show cause notice was issued to them demanding duty of Rs. 8,77,124/ - under proviso to Section 28(1) of the Customs Act and penalty was also proposed. Case was adjudicated by the Commissioner of Customs, Custom House, Madras under the impugned Order -in -Original No. 190/97, dated 21 -10 -1997.

(2.) HEARD Shri S. Raghu, ld. Advocate for the appellants. He pleaded that he is challenging the order of the Commissioner on the ground that no extra duty demanded in the show cause notice and confirmed by the Commissioner is leviable on the impugned goods, the show cause notice is time -barred and penalty under Section 114A of the Customs Act is not imposable as the case relates for the period 1992 -95. The appellants have not misdeclared or misused the imported insulated electric cables as they had manufactured patient cable assemblies and cleared the same as replacements which were ultimately used in ECG. It is alleged in the show cause notice that there is wilful misstatement and suppression of the fact but no findings has been given by the Commissioner in his order for application of extended period for demanding duty.

(3.) HEARD Smt. Radha, ld. SDR for the Revenue. She stated that there has been violation of the condition of Notification No. 165/86 -Cus. as the appellants have imported excess quantity of insulated electric cables (patient cables) and cleared it as components for manufacture of ECG. They have not used the entire quantity of patient cables imported by them in the manufacture of ECG machines but part of these patient cables were sold as replacements or as warranty spares. Notification No. 165/86 -Cus. does not allow such use of the patient cables. Clearance as spare was only allowed after issue of Notification No. 55/95 -Cus., dated 16 -3 -1995. Therefore, concessional rate of duty under Notification No. 165/86 -Cus. was not available to the patient cables cleared as spares. Therefore the duty has been correctly demanded. She agreed that there is no finding in the Order -in -Original about the application of extended period and on mis -declaration and suppression of facts, although these are alleged in the show cause notice. She also agreed that penalty under Section 114A of Customs Act could not have been imposed as the demand relates for the period from 1992 -95.