TaxTMI 
TaxTMI 
2025 (11) TMI 710
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....the Authorized Signatory and the Head of Regulatory Affairs and Quality Assurance of M/s.3M India Limited. 3. For the sake of convenience, the brief facts stated are with reference to the case of M/s. 3M India Limited. 4. This Court, by order dated 29.06.2022, admitted the appeals on the following substantial questions of law: "IN CSTA 4/2021 "(1) Whether, on the facts and in the circumstances of the case and law, the Tribunal was justified in holding that the show cause notice dated 30.09.2011 could not have covered the period commencing from October, 2006 to February 2010 being the extended period? (2) Whether, on the facts and in the circumstances of the case and law, the Tribunal was justified in setting aside the imposition of penalty and duty on the respondent after having held that the impugned products skin barriers micropore surgical tapes were not covered under the notification No. 21/2002-CUS dated 1.3.2002 for exemption? (3) Whether on the facts and in the circumstances of the case, the judgment reported in 2019(370) ELT 1257 in the case of M/s. Sutures Pvt. India Ltd., Vs. Commissioner of Central Customs Chennai is correctly de....
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....Notification No. 21/2002-Cus dated 1.3.2002 for exemption?" (4) Whether on the facts and in the circumstances of the case, the judgment reported in 2019 (370) ELT 1257 in the case of M/s. Sutures Pvt. India Ltd., Vs. Commissioner of Central Customs Chennai is correctly decided? (5) Whether on the facts and in the circumstances of the case, the Tribunal has seriously fallen in error in holding that respondent had not got cleared the consignment under the self assessment procedure?" 5. The respondent is engaged in the import and trading of various surgical and medical products, including surgical tapes under the brand names "Micropore, Transpore, Medipore, Microfoam, Durapore, and Tegaderm." The Directorate of Revenue Intelligence (hereinafter referred to as 'DRI') gathered information that "Hypoallergenic Surgical Adhesive Tapes," sold as general-purpose surgical tapes for affixing gauze dressings, etc., were being imported by mis-declaring them as "Ostomy Product, List 37, Sl. No. 22 - MICRPORE, TRANSPORE, AND TEGADERM," which are appliances used in the management of ostomy cases. It was alleged that the respondent was wrongly availing the benefit of Notificati....
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....8. Additionally, a penalty of Rs. 9,33,25,582/- along with interest was imposed under Section 114A of the Act. Further, a penalty of Rs. 55,00,000/- was imposed on the Authorized Signatory and the Head of Regulatory Affairs and Quality Assurance of M/s. 3M India Limited under Section 112(b) of the Act. 5.3 The respondent preferred an appeal against the order-in-original dated 14.12.2012 before the CESTAT. By the impugned order dated 20.03.2020, the CESTAT held that the imported products do not fall within the category of exempted goods and are not "Skin Barrier Micropore Surgical Tapes" as notified under Notification No. 21/2002-Cus. However, the CESTAT also held that the extended limitation under sub-section (4) of Section 28 of the Act is not attracted in the present case. Challenging the aforesaid order of the CESTAT, the Revenue is before this Court in the present appeals. 6. Sri Akash B. Shetty, learned Standing Counsel appearing for the appellant, submits that the products imported do not fall within the category of exempted goods described as "Skin Barrier Micropore Surgical Tapes." It is contended that the respondent has made an incorrect claim, asserting that "Skin B....
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.... a long period, much prior to the issuance of Notification No. 21/2002-Cus, and were consistently classified as such. It is contended that the Revenue has, on multiple occasions, cleared the goods after inspection without raising any dispute regarding their classification. Learned counsel submits that, after more than a decade, it is not open to the Revenue to contend that the earlier declarations, which were accepted, are incorrect, or to allege a willful misstatement in order to invoke the extended limitation under sub-section (4) of Section 28 of the Act. 7.2 Learned counsel further submits that, although the respondent does not assail the finding of fact recorded by the CESTAT regarding the exemption under Notification No. 21/2002-Cus, that alone cannot constitute an ingredient of "willful misstatement" so as to enable the Revenue to invoke the extended limitation under sub-section (4) of Section 28 of the Act. 7.3 Learned counsel further submits that the CESTAT, having taken note of the aforesaid aspects, has rightly held that the extended limitation under sub-section (4) of Section 28 of the Act is not attracted in the present case. 8. It is observed that, if the sub....
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....It is submitted that, until the DRI raised a dispute, the declarations of the goods under Notification No. 21/2002-Cus were accepted by the Revenue. Learned counsel contends that, having accepted such declarations for a long period, the Revenue cannot now allege willful misstatement or suppression of facts by the respondent. 10.1 In Designco v. Union of India and Ors. [W.P(C) 14477/2022], High Court of Delhi examined the scope of sub-section (4) of Section 28 of the Act can be invoked only if prescribed authority come to the conclusion that the goods had escaped duty by reason of collusion, wilful misstatement or suppression of fact. It is further held that under sub-section (4), the exercise of power is relegated upon the respondent finding that on assessment made under the Act suffers from the vice of collusion, wilful misstatement or suppression of fact. A misclassification or an incorrect classification would also not and ipso facto amount to collusion, wilful misstatement or suppression of fact. 10.2 The Revenue contends that the respondent imported the goods and claimed exemption under Notification No. 21/2002-Cus, despite being ineligible. It is submitted that when thi....
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....idering that the respondent has been importing similar products for several years and the same were cleared without objection and allowed the benefit of exemption, a subsequent change in opinion cannot be equated with a willful misstatement. If the question arises whether a mere change of opinion would amount to a willful misstatement or suppression of facts, the answer must necessarily be 'no'. The emergence of a different opinion at a later stage regarding the nature of the product cannot retroactively characterize earlier conclusions, even if erroneous, as a willful misstatement or suppression of facts. 10.4.1 In Anand Nishikawa Co. Ltd. v. Commissioner of Central Excise, Meerut, [(2005)7 SCC 749], the Hon'ble Supreme Court while interpreting pari materia provision under the Central Excise Act held that when the classification list continued to have been approved regularly by the department, it could not be said that manufacturer was guilty of suppression of fact. It is further held that while dealing with the meaning of the expression suppression of fact, the term must be construed strictly, it does not mean any omission and the act must be deliberate and wilful to evade....
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....t of duty. Further held that when the facts are known to both parties, omission by one party to do what he might have done would not render its suppression. The burden to prove presence of ingredients of sub-section (4) is imposed on the revenue as it invokes the extended period of limitation. 10.6 In Uniworth Textiles Limited v. Commissioner of Central Excise, Raipur, [(2013) 9 SCC 753] by referring to earlier pronouncements, it is held that mere failure to declare does not amount to wilful suppression. There must be some positive act from the side of assessee to find wilful suppression. Unless deliberate intention on the part of the appellant not to disclose the correct information or to evade payment of duty is made out the extended period of limitation is not available. 10.7 The Hon'ble Supreme Court emphasised its earlier finding in Easland Combines Coimbatore v. Collector of Central Excise, Coimbatore, [(2003)3 SCC 410], wherein it is held as, "31. It is settled law that for invoking the extended period of limitation duty should not have been paid, short levied or short paid or erroneously refunded because of either fraud, collusion, wilful misstatement, su....