Medical Equipment Supply Co. vs Union of India (UOI)

N.K. Jain, J.—It is alleged that petitioner is doing business of importing and dealing in scientific and surgical laboratory equipments. It imported a consignment of Rs. 38,000, pieces in 76 cartons invoiced as ''Infusion Sets'' under Bill of Entry Rotation No. 727/88, dated 5-9-1988 and claimed concessional assessment under Customs Notification No. 208/81, dated 22-9-1981. But the customs authority refused to allow the clearance of the goods. A show cause notice was issued by the Assistant Collector of Customs, the 3rd respondent herein on 13-4-1989, stating that the company misdeclared the value of the goods with the intention of evading the duty and as such the goods are liable to be confiscated u/s 111(m) of the Customs Act, 1962. Though no reply was filed, the petitioner company requested for personal hearing. After giving an opportunity the Addl. Collector of Customs, Madras by Order dated 5-5-1989 confiscated the goods revalued at Rs. 1,39,646.64 but however released the goods on payment of redemption fine of Rs. 5,000/- but refrained from taking any penal action and dropped the charge. Under these circumstances, the petitioner company is before this court praying for extending the benefit of Exemption Notification No. 208/81 as amended from time to time and 87/88 and to quash the levy of duty mentioned above.

Learned Counsel for the petitioner submits that Infusion Sets are entitled to be imported under Item 32 of List 2 and it is entitled for exemption of duty under Item 44 for the payment of duty. He brought to any notice that butterfly sets were added in the list subsequently. It is submitted that once the benefit under Notification No. 208/81 is granted benefit available under Notification 87/88, ancillary duty cannot be denied, more so, on earlier occasion it was granted.

In the counter filed by the respondents, it is submitted that the petitioner company participated in the enquiry, accepted the same and reported its readiness to pay the duty. It is further stated that thereafter, without availing the statutory appeal, the petitioner has filed this petition before this court, are as such, no relief, as sought for in this petition need be granted. It is also stated that the custom had been extending the benefit of exemption to butterfly infusion sets and that the present goods imported by the petitioner are not butterfly sets.

Learned Counsel for the respondents, reiterating the averments made in the counter affidavit argued that the case relied on by the petitioner in Eximed India, New Delhi v. Union of India (W.P. 14675 of 1988, dated 9-3-1998) decided by (K. Gnanaprakasam, J) is not applicable to the case on hand, since in that case, no counter was filed. It is further submitted that the case decided on 25-11-1998 by P. Sathasivam, J. in South Indian Surgical Co. Pvt. Ltd. Madras v. The Assistant Collector of Customs, Madras (W.P. No. 4834 of 1989, dated 25-11-1998) clarified the position that Butterfly needle G Infusion Sets, only fall under Item 44 and as such it is not open to the petitioner to say that ''Infusion Sets'' has a separate items under Entry 44 as per clarification letter dated 6-6-1985 issued by the Director General of Health Services, New Delhi.

Learned Counsel for the respondents further submits that by order dated 25-6-1991 the petitioner was directed to clear the case on payment of redemption fine and by offering bank guarantee for Rs. 75,000/- and despite the extended time up to 2-7-1991 they have not complied with the same. Therefore, it was open to proceed with public auction. Public auction was held and the goods were delivered to the buyer on 17-7-1991. Therefore, on this ground also, the petitioner is not entitled for any relief. More so the prayer sought for in this petition seeking for release of the goods only has become infructuous.

We have heard the learned Counsel appearing for the parties and have gone through the materials placed on record and the case laws relied on by both sides.

It is relevant to deal with original entry to Item 44 in general exemption 100 in Notification No. 155/Custom, dated 28-7-1990 reads thus,

"...Ancillaries for Blood Component Therapy required for the treatment of cancer, namely Y Type Blood solution recipient set; Transfer pack 1000 ml. and 300 ml. Butterfly needle G. Infusion Set; Disposable herasis bowl 225 ml. and 373 ml; Hydroxyethyl Sterile solution (Plasma Sterile); Wasting harness with bypass; and Waste bags."

Subsequently, it was clarified by Notification No. 208/81, dated 22-9-1981 that "Infusion sets" and Item No. 19 are not one and the same. Butterfly Needle G Infusion sets have been separately listed under Entry 44. So it is made clear that Butterfly Needle G Infusion sets only fall under Item 44. It is also pertinent to note that by Notification No. 96/99-Customs, dated 1-3-1989. in Item No. 44, the words "Butterfly Needle G Infusion Sets" as omitted. It is also seen that show cause notice dated 15-4-1989 was issued to the petitioner. The petitioner neither replied to the same nor challenged the same at the relevant point of time. The petitioner was allowed to participate in the enquiry and has accepted to pay the duty. No adequate reason has been assigned as to why it had not raised the contention by way of filling a reply, and now chooses to agitate the issue only at this stage, before this Court. It is also to be seen that because of the subsequent clarification order dated 3-3-1985 as observed by P. Sathasiva, J., the article claimed by the petitioner is this case, will not fall under Entry 44, so as to attract the benefit of exemption under Entry 44.

What particular item has been imported at one point of time is to be considered by the competent authority and it will see whether that particular item comes within the purview of the prescribed item or not. It is also settled that the competent authority will take independent decision of facts of each case and it will be seen whether the benefit of exemption can be granted or not. So the argument that on earlier occasion benefit of exemption was granted is of no avail. In the instant case, it is to be seen whether actually Infusion sets or Butterfly Needle G Infusion sets was imported is all question of facts and goods are to be verified and need investigation. As stated when no counter has been filed at the relevant time and when the respondent has not raised any objection, rather admitted the payment of tax, further never complied with the order of this Court, this Court cannot go into this issue and allow the parties to argue this point. Under these circumstances, no relief as prayed for can be granted.

The learned Counsel for the petitioner, however, has not disputed the subsequent notification, but submit that it is not exempted meaning thereby, he is entitled to get the benefit of the Bill of Entry in question, as it is prior to the subsequent Notification. In view of what have been stated above this contention also falls to ground.

It is brought to my notice that the prayer sought for in this petition is only for releasing the goods. As stated above, the goods have been directed to be released subject to the condition, though the said conditions were not complied with scrupulously, the goods were put to public auction, and were sold and delivered to the buyer on 17-9-1991. In view of the fact situation and what had been stated above, on merits also, I find no reason to interfere with the orders of the respondent. This writ petition is therefore dismissed. W.M.P. petition also stands dismissed.