TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1281
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....f the Customs Act, 1962 in Appeal No.356/2003. 2. Briefly the facts of the case are that appellant had imported relays, capacitors and various other items for manufacture of DC defibrillators for external use by fraudulently claiming complete duty exemptions under Customs Notification Nos.11/1997 dated 01.03.1997, No.23/1998 dated 02.06.1998 and No.20/1999 dated 28.02.1999 respectively which were applicable only for DC Defibrillators for internal use and pacemakers. After detailed investigations, the benefit of the Notifications was denied and customs duty on these products was confirmed along with interest and penalty was imposed under Section 114A of the Customs Act, 1962 on the appellant and penalty under Section 112(a) on Shri S. Hariharan, General Manager of the appellant. Aggrieved by these orders, the appellant is in appeals before us. 3. The Learned counsel on behalf of the appellant submitted that the Hon'ble Supreme Court in their own case had held that exemption is available only for implantable defibrillators and pacemakers which are for internal use and therefore, the defibrillators manufactured by the appellant which are for external use are not eligible for the ben....
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....stant Commissioner of Central Excise within three months from the date of imports of the parts/components, however failed to produce such end-use certificates and failed to seek extension of time for producing the same. This statutory obligation has not been discharged and hence it is a clear case of mis-declaration. Moreover, the duty exemption was claimed by making a false declaration that the imported parts would be used in the manufacture of DC defibrillators for internal use and pacemaker knowing fully well that they were not used for internal use. Relying on the decisions of the Supreme Court in the case of CC Vs. Jagdish Cancer and Research Center (supra) and CC Vs. C T Scan Research Center Pvt. Ltd. (supra), it is submitted that having failed to produce the end-use certificates, the appellant is liable to pay duty. 5. Heard both sides. The issue on merits with regard to eligibility of exemption Notification stands settled by the Hon'ble Supreme Court in the appellant's own case B.P.L. LTD. Versus Commr. of C.EX., Cochin-II 2015 (319) E.L.T. 556 (S.C.) dated 5-5-2015. Their Lordships observed as: "12. We have already taken note of the product in question with its salient ....
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.... mentioned. For our purposes what is relevant is that in the original Notification dated 11-6-1986, as amended on 1-3-1989 and 1-3-1994, the goods which qualified for exemption were "Defibrillators for internal and external use and pacemakers and their accessories including patient cable internal defibrillator paddles 45mm and 55mm sizes". Implantable cardiac pacemaker and accessories were also specifically included. This entry underwent a substantial change in the Notification No. 8/96, dated 23-7-1996. In this Notification, replacing the earlier notifications, defibrillators for external use are no more eligible for exemption. The entry now reads "D.C. Defibrillator for internal use and pacemaker". Thus, what is omitted is not only external use but also accessories of these D.C. Defibrillators. Likewise in place of earlier entry which mentioned on implantable cardiac pacemaker and accessories, entry in this Notification confines only to implantable cardiac pacemakers. Accessories thereof are specifically removed from exemptions. Moreover in place of pacemaker wires now it is only pacemaker. Though in the earlier notification, patient cable for pacemaker was included as exempted i....
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....e, simply because it can be used internally as well but not without the paddles and paddle is optional accessory, it is difficult to hold that conditions contained in the exemption Notifications are satisfied. We are making these remarks in the context of the Notification in question when contrasted with the earlier Notification, as already described above. On these facts the Third Member of the Tribunal in the impugned order made the following analysis : "5. As mentioned earlier, the Notification No. 339/86 as amended by Notification Nos. 88/89 and 58/94 took in both DC Defibrillator for internal and external use. While including accessories in the above items specific reference was made to 'internal defibrillator paddles with 45mm and 55mm sizes'. It is relevant to note that there is a marked difference in the description of the item when it came to Notification Nos. 8/96 and 4/97. There is no reference to D.C. Defibrillator for external use or a specific reference to 'internal defibrillator paddles'. Even according to the assessee, its product can be treated as D.C. Defibrillators for internal use only when it is fitted with internal defibrillators. Admittedly assessee is clea....
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....ator. That is because the device typically used to manually deliver a counter shock to the myocardium during open heart surgery is identical to those defibrillators that externally deliver transthorascic shocks to a closed chest (except for the peddles that are used.)". Therefore, the defibrillator used during open heart surgery is identical to the defibrillators used to deliver transthorascic shocks externally except for the internal paddles additionally provided. Exclusion of defibrillators for external use from the exemption provisions in Notification Nos. 8/96 and 4/97 cannot be ignored. Appellant's product which is basically a defibrillator for external use but capable of using during open heart surgery if the optional accessory of internal defibrillators paddles are also provided, cannot be treated as defibrillators for internal use are contemplated in the exemption provisions." 18. We approve the aforesaid reasoning and rational given by the Tribunal in coming to the conclusion that the goods of the appellant would not qualify the description contained in Notification Nos. 8/96 and 4/97. It is trite that strict interpretation is to be given to the exemption notifications....
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....of doubt or ambiguity, the benefit of it must go to the State. A Constitution Bench of this Court in Hansraj Gordhandas v. CCE and Customs (AIR 1970 SC 755 = (1969) 2 SCR 253) held that (Novopan India Ltd. case, SCC p. 614, para 16) : "16. ..such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption." 20. Having regard to the above it is difficult to accept the contention of Mr. Datar, learned Senior Counsel who appeared for the appellant, predicated on the submission that such defibrillator of the appellant is capable of internal use and, therefore, it would be covered by the aforesaid notifications. No doubt there is difference between the 'actual use' and 'intended for use' and even when a product is not actually used but is capable of being used, it would be treated as the product 'for use' as held in State of Haryana v. Dalmia Dard....
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.... decision of the Hon'ble Supreme Court, the appellant is not eligible for the benefit of Notification for both defibrillators and their parts. The appellant is now contesting the demand only on the ground of limitation. It is argued that it is a question of interpretation of the Notification and since one of the Members of the Tribunal had held that they are eligible for the benefit of Notification, the benefit of doubt should be given to the appellant and therefore, suppression could not be alleged against them. 5.2. The period of dispute in both the appeals Customs Appeal No. C/355/2003 and Appeal No. C/21182/2017 is for the imports from 1997-1999 and 2002 respectively. As seen from the above order of the Hon'ble Supreme Court "the appellant was very well aware of the fact that the product which is basically a defibrillator for external use but capable of using during open heart surgery if the optional accessory of internal defibrillators paddles are also provided, cannot be treated as defibrillators for internal use as contemplated in the exemption provisions." Moreover, the fact that they are not eligible for the benefit of Notification was brought to their notice way back in ....
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....g aware, the appellant continued to file Bills of Entry claiming the benefit of the Notification and the sample Bills of Entry placed on record clearly show 'for internal use' which is a clear case of mis-declaration and suppression of the fact that they were already issued a letter dated 17.02.1998 and notice dated 23.09.1998 from the Central Excise Authorities denying the benefit of the Notification. Moreover, the relevant Notifications during the disputed period very categorically extended benefit of exemption for DC Defibrillators only for internal use and the appellant was to produce within 3 months or such extended period that these products were used in the manufacture of the said product. The Notification also clearly states that if the appellant fails to comply with these conditions, the differential duty needs to be paid. From the statement dated 12.06.2002 recorded by Revenue from Shri Mohana Murali, Head Professional Products-Medical Equipments of the appellant (M/s. BPL Ltd.) it is admitted that internal Defibrillators are embedded on the heart by the surgical implantation and the appellant manufactures only DC Defibrillators which are used for external use. Similarly,....
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....on the decision of this Tribunal in their own case with regard to Central Excise exemption wherein the Tribunal had held that the extended period of limitation will not be available is mis-placed to the facts of the present case. The Tribunal in their Final Order No. 20336/2018 dated 02.03.2018 noting that in the declaration filed before the Central Excise Authorities, the appellant had declared it as 'DC Defibrillators Model No.DF2389R with recorder and without recorder' observed in the declaration 'the assessee neither declared the same as for internal use nor as for external use', accordingly the Tribunal held that 'there is no positive act recorded on the part of the assessee to fraudulently claim the benefit of the Notification by willful mis-statement' and held that the extended period of limitation cannot be invoked. However, the appeals before us based on the facts and statements as discussed above, it is very clear that the appellant had mis-declared in the Bills of Entry that the products were meant for internal use when actually at the end-use, the Central Excise Authorities had denied the benefit. Therefore, we hold that on limitation as held by the Commissioner/Commiss....