By TIOL News Service

MUMBAI, NOV 02, 2016: THIS is a Revenue appeal filed in the year 2005.

The issue involved is admissibility of exemption notification 21/2002-Cus dated 01/03/2002 on the imported goods, namely, Ketamine HCL.

The demand was confirmed by the Dy. Commr. u/s 11A of the CEA, 1944 and penalty was imposed u/r 25/26 of CER, 2002.

In appeal, the Commissioner (Appeals) allowed the appeal on the ground that the demand should not have been confirmed u/s 11A of the CEA, 1944 but it should have been raised u/s 28 of the Customs Act, 1962.

Aggrieved by this order, Revenue is in appeal.

The AR submitted that the goods were imported in violation of Customs (Import of Goods at Concessional Rate for Manufacture of Excisable Goods) Rules, 1996 and, therefore, the duty was rightly demanded under Section 11A of the CEA, 1944. Moreover, the Commissioner(A) had set aside the demand on the ground of limitation also which is not correct as the respondent assessee had executed a bond to the effect that the imported goods would be used in the manufacture of excisable goods and, therefore, the respondent is under continuous obligation. [ Bombay Hospital - 2005-TIOL-996-CESTAT-MUM-LB refers.]

The respondent inter alia submitted that the Commissioner (Appeals) has allowed the appeal not only on the ground of limitation but also on the ground that demand was confirmed under section 11A whereas it is a demand of Customs duty which was supposed to be proposed and confirmed under section 28 of the Customs Act, 1962; that the demand was confirmed on the allegation of non-compliance of the procedure laid down in the Rules whereas Part A of serial no. 80 exempts certain specified drugs imported without any condition (and under which the benefit was extended by Commr(A)); that the Supreme Court in the case of Share Medical Care - 2007-TIOL-26-SC-CUS has held that when the assessee is entitled to benefit under two different notifications then they can legitimately claim the benefit of the more advantageous entry.

The Bench while extracting the findings of the Commissioner(A) observed thus -

"4. …We are not inclined to go into the admissibility of the notification. We observe that the demand was raised and confirmed under section 11A of the Central Excise Act, 1944. Demand of duty is admittedly in respect of Customs duty and for violation of Customs provisions, the duty should have been proposed and confirmed under the provisions of Customs Act, 1962. Therefore, the demand confirmed under section 11A of the Central Excise Act, 1944 will not sustain…."

Holding that there is no infirmity in the findings of the lower appellate authority, the impugned order was upheld and the Revenue appeal was dismissed.

(See 2016-TIOL-2840-CESTAT-MUM)