Custom, Excise & Service Tax Tribunal
Bpl Limited vs Bangalore-Cus on 4 June, 2025
C/355, 356/2003
C/21182/2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. 1
Customs Appeal No. 355 of 2003
(Arising out of Order-in-Original No. 15/2003-Cus. Adjn. dated
20.08.2003 passed by the Commissioner of Customs, Bangalore.)
M/s. BPL Limited
BPL Towers
Appellant(s)
13, Kasturba Road,
Bangalore - 560 001.
VERSUS
The Commissioner of Customs
CR Building,
Queens Road, Respondent(s)
Bangalore - 560 001.
WITH Customs Appeal No. 356 of 2003 (Arising out of Order-in-Original No. 15/2003-Cus. Adjn. Dated 20.08.2003 passed by the Commissioner of Customs, Bangalore.) S. Hariharan General Manager Appellant(s) M/s. BPL Limited 13, Kasturba Road, Bangalore - 560 001.
VERSUS The Commissioner of Customs CR Building, Respondent(s) Queens Road, Bangalore - 560 001.
AND Customs Appeal No. 21182 of 2017 (Arising out of Order-in-Appeal No.TVM-EXCUS-000-APP-102-2017 dated 28.04.2017 passed by the Commissioner of Central Excise, Customs and Service Tax (Appeals), Cochin.
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C/355, 356/2003
C/21182/2017
M/s. BPL Limited Appellant(s)
BPL Works,
Palakkad - 678 007.
VERSUS
The Commissioner of Central
Excise, Customs and Service Tax
(Appeals-III) Respondent(s)
CR Building, I.S. Press Road,
Cochin - 682 018.
APPEARANCE:
Mrs. Rukmani Menon, Advocate for the Appellant Shri K. A. Jathin, Dy. Commissioner (AR) for the Respondent CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL) HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) FINAL ORDER NO. 20755 - 20757 / 2025 DATE OF HEARING: 13.01.2025 DATE OF DECISION: 04.06.2025 PER: R. BHAGYA DEVI These 3 appeals No.C/355 & 356/2003 and C/21182/2017 are filed by the appellants M/s. BPL Ltd. against Order-in- Original No. 15/2003 dated 20.08.2003 passed by the Commissioner of Customs Bangalore and Order-in-Appeal No.TVM-EXCUS-000-APP-102-2017 dated 28.04.2017 passed by the Commissioner (Appeals), Cochin and by Shri. S. Hariharan, General Manager of M/s. BPL Ltd., against the penalty imposed on him under Section 112(a) of 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 Page 2 of 18 C/355, 356/2003 C/21182/2017 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 benefit of Central Excise exemption Notification, hence on merits they admit that they are not eligible for the benefit of the Notification, however, the demand is contested on limitation.
3.1. It is submitted that the period of dispute is from January to February 2002 and the show-cause notice was issued on 10.02.2004 which was received by them on 20.02.2004 and hence, the notice is beyond the normal period of six months provided under Section 28(1)(b) of the Customs Act, 1962. Further, it is stated that there is no finding with regard to mis- declaration in the impugned orders and it is a case of interpretation, hence, they cannot be alleged with mis- declaration. It is also submitted that pursuant to the order of the Hon'ble Supreme Court, this Tribunal vide Final Order No. 20336/2018 dated 02.03.2018 observed that the benefit of Page 3 of 18 C/355, 356/2003 C/21182/2017 Notification was a contentious issue, hence, suppression cannot be alleged as there is no positive act recorded on the part of the appellant to fraudulently claim the benefit of the Notification by willful misstatement, hence, the extended period of limitation will not be available and the demand was to be confirmed for the normal period. It is stated that these findings are applicable to the present case and therefore, demand cannot be upheld on the ground of mis-declaration. It is also submitted that the issue relates to interpretation of the exemption Notification and hence, question of mis-declaration does not arise. Relied on the decision in the case of Schiller Healthcare India Pvt. Ltd.: 2018 (359) ELT 515. Shri further submitted that reliance placed by the adjudicating authority on the decision of the Hon'ble Supreme Court in the cases of Commissioner of Customs (Import), Mumbai vs. Jagdish Cancer and Research Center: 2001 (132) ELT 257 and Commissioner of Customs, New Delhi vs. C.T.Scan Research Center Pvt. Ltd.: 2003 (155) ELT 3 are misplaced since the demands therein were under Section 124 and 125 and not under Section 28 of the Customs Act, 1962 .
4. The learned Authorized Representative on behalf of the Revenue submitted that the appellant had furnished undertakings from time-to-time upon import of consignments by execution of end-use bonds declaring that the parts, components would be used in the manufacture of DC defibrillators for internal use and they would furnish end-use certificates from the jurisdictional Assistant 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 Page 4 of 18 C/355, 356/2003 C/21182/2017 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 features and particular uses it can be put to. Question is as to whether it satisfies the requirement of Notification No. 8/96 and Notification No. 4/97, under which the appellant is claiming exemption. Thus, before we proceed further it would be apt to scan through the ingredients of the aforesaid notifications along with earlier notifications under which exemption is granted in respect of defibrillator, from time to time. First notification in this behalf is the Notification No. 339/86, dated 11-6-1986, which was amended by Notifications dated 1-3-1989 and 1-3- 1994. Material part of these Notifications read as under:
"Notification No. 339/86-C.E., dated 11-6-86 amended by Notification Nos. 88/89-C.E., dated 1-3-89 and 58/94-C.E., dated 1-3-94.
8 DC Defibrillators now internal use and Pacemakers and their accessories including patient cable, internal Defibrillators Paddles 45mm and 55mm sizes but excluding:
(a) Cardiac Monitors
(b) Cardioscopes
(c) E.C.G. Monitors of any type.
(d) E.C.G. Recorder and the following components of D.C.
Defibrillators, namely:
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(i) Connector.
(ii) Discharge/Damp Relay
(iii) High Voltage Retractable, Flexible Wire
(iv) Polyester/Paper Discharge Capacitor
20. Implantable Cardiac Pacemaker and accessories.
30. Pacemaker Wires.
31. Patient Cable for Pacemaker."
13. We now reproduce the relevant portion of the two Notification Nos. 8/96 and 4/97 with which we are directly concerned. These are as follows:
"II. Notification No. 8/96, dated 23-7-1996 - TABLE (7) D.C. Defibrillators for internal use and pacemakers.
(16) Implantable cardiac pacemakers. (58) Pace Maker. III. Notification No. 4/97, dated 1-3-97 - TABLE
217. Medical equipment and other goods specified in List 6.
LIST 6 (7) DC Defibrillators for internal use and pace makers.
(16) Implantable cardiac pacemakers. (58) Pace Maker."
14. From the reading of the aforesaid notifications, it becomes apparent that originally those D.C. Defibrillators which were meant for both internal as well as external use and also pacemakers and their accessories, etc., were eligible for exemption. Certain goods which did not qualify for exemption like cardiac monitor, Cardioscopes, etc., were specifically excluded. On the other hand some of the components of D.C. Defibrillators which were exempted from payment of Excise duty were also specifically 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 Page 6 of 18 C/355, 356/2003 C/21182/2017 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 item, it is omitted altogether in Notification No. 8/96. This position is maintained in Notification No. 4/97, dated 1-3-1997.
15. Keeping in view the aforesaid characteristic and feature of the Notifications in question, in contradistinction to the position which prevailed in the earlier Notification dated 11-6-1986 as amended from time to time and taken note of above, we have to examine as to whether the defibrillator of the appellant would be covered by these two Notifications.
16. It is not disputed by the appellant that their Defibrillators are primarily meant for external use. It is, however, contended that this can be used internally as well. It is also admitted case that the defibrillator manufactured by the appellant is not implantable internally in the human body. The only justification given by the appellant is that at the time of carrying out the open heart surgery same device can be used to deliver electrical shock. However, it is accepted that to give the electrical shock paddles are needed, which is sold by the appellant only as an accessory. Not only this, while selling the defibrillators said paddlers are not sold as an integral component/accessory of the main equipment. To the contrary, their purchase is optional, meaning thereby the choice is that the buyer to purchase paddle or not. During the arguments it was conceded that 99 per cent sale of these defibrillators were without paddles which means that predominantly the goods are sold for external use only. We would also like to reproduce, at this stage the description of the goods in question as given by the appellant itself in the operating and service manual of the product in question. It reads as follows :
Page 7 of 18C/355, 356/2003 C/21182/2017 "DESCRIPTION BPL's Portable Defibrillator/Monitor is designed to provide external counter shocks and to display heart rate and ECO wave forms on the scope screen.
......Delivery of the monophasic countersjock pulse (Lown/Edmark Waveform) is triggered by depressing the discharge buttons on both of the anterior paddles, or if internal paddles are used, by depressing the INT, PADDLE DISCHARGE button located on the control panel Optional anterior paddles are equipped with a CHARGE push button that functions the same way as the SET CHARGE MANUAL push button does."
17. Going by the aforesaid features of the appellant's goods in question which are primarily meant for external use, 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 clearing defibrillators without such 'internal defibrillators paddles' also. A reference to assessee's Operating and Service Mannual also would show that 'internal defibrillator paddles' are only optional accessories. Defibrillators Page 8 of 18 C/355, 356/2003 C/21182/2017 for external use which are once included in the exempted category are not taken out of such category under Notification Nos. 8/96 and 4/97. If the assessee's contention is to be accepted then in spite of such specific exclusion its product will continue to get benefit of exemption on the basis of supply of some optional accessories like internal paddle.
6. The material produced by the Revenue before the Commissioner and accepted by him were later made available to the assessee before this Tribunal. Arguments were addressed by both on that basis. The relevant portion from the Commissioner's order is quoted below :
"Internal Cardioverter Defibrillators (ICD) were originally developed and have been most frequently used for prevention of sudden cardiac death (www.americanheart.org). A modern internal defibrillator is much smaller and is implanted in the upper chest. Newer devices are a combination of ICD and pacemaker in the unit. These combination ICD/pacemakers are implanted in patients who require both devices (www.emedicine.com)..... This device is a small electric generator hooked up to wires called leads. A typical ICD weighs about 4 ounces and measures about ½ inch thick by 2 inches wide and is implanted under the skin in the upper chest. Leads are the wires that conduct the ICD to the heart the tip of which is placed against the heart's inner wall and carries electric impulses from the ICD to the heart through the cut vein into the heart's chambers beginning with the right ventricle (www.chfpatients.com)."
7. The above would show that D.C. Defibrillators for internal use included in the exempted category cannot be taken as a defibrillator for external use cleared by the appellant with an accessory of internal defibrillators paddles. A reference to reply received from Jerry Potts to the appellant's query would also lead such a conclusion. The reply reads as follows :
"Implantable defibrillators are definitely distinct from 'internal' defibrillators used during surgery to countershock the heart. If Page 9 of 18 C/355, 356/2003 C/21182/2017 anything, the term internal defibrillator, as you defined it in your message, more closely relates to an external defibrillator. 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 and it is upon the assessee to approve that he fulfills all the conditions of eligibility under such Notifications. This is so held by this Court in Rajasthan Spinning and Weaving Mills, Bhilwara, Rajasthan v. Collector of Central Excise, Jaipur, Rajasthan - (1995) 4 SCC 473 = 1995 (77) E.L.T. 474 (S.C.), wherein this principle was stated in the following manner :
"16. Lastly, it is for the assessee to establish that the goods manufactured by him come within the ambit of the exemption notification. Since, it is a case of exemption from duty, there is no question of any liberal construction to extent the term and the scope of the exemption notification. Such exemption notification must be strictly construed and the assessee should bring himself squarely within the ambit of the notification. No extended Page 10 of 18 C/355, 356/2003 C/21182/2017 meaning can be given to the exempted item to enlarge the scope of exemption granted by the notification."
19. This principle has been reiterated time and again. It is not necessary to take note of all such cases. We would however like to reproduce the restatement of this member by the Constitutional Bench of this Court in Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal & Ors. - (2011) 1 SCC 236 = 2010 (260) E.L.T. 3 (S.C.), as follows :
"29. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption.
30. In Novopan India Ltd. (Novopan India Ltd. v. CCE and Customs, 1994 Supp (3) SCC 606) this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case 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 Page 11 of 18 C/355, 356/2003 C/21182/2017 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 Dardri Cement Limited - (1987) Supp SCC 679 = 2004 (178) E.L.T. 13 (S.C.). However, in the present case we find that defibrillator when sold without paddle is not capable of being used internally and paddle is only sold as optional accessory.
21. For the same reason, judgment in the case of Collector of Customs, Bombay v. Handicraft Exports - (1997) 7 SCC 144 = 1997 (93) E.L.T. 6 (S.C.) will also have no application to the instance case. In that case exemption from import duty was provided in respect of 'embellishment for footwear under the notification. The Court held that the imported goods need not be capable of being exclusively used as embellishment for footwear but may also be capable for being used for other purposes. Here, as noted above, defibrillators are not capable of being used internally without paddles and paddle is an accessory which does not qualify for exemption any longer. It would be pertinent to note that in Handicraft Export's case this Court also held that importer will have to prove that the goods were not only capable of being utilized as embellishment for shoes but also that the same were imported for and were actually been used for embellishment for footwear. In the present case as defibrillators are sold without paddles, obviously the sale as such is not intended by the purchaser to be used for internal purpose. We are, therefore, of the view that the majority opinion of the Tribunal is correct in law.
22. This leaves us with the question of extended period of limitation invoked by the department. It was contended that the declaration given by the appellant was bona fide and such bona fides were clear from the Page 12 of 18 C/355, 356/2003 C/21182/2017 fact that law on this issue was not free from doubt which can be gathered from the fact that even the impugned judgment of the Tribunal is not unanimous as the Member (Judicial) had taken a different view which was in favour of the appellant. However, we find that the Third Member did not decide this issue and left it for the regular Bench to consider the same, with the direction that the appeal would be placed before the regular Bench. Without awaiting the decision the appellant filed the present appeal challenging the impugned order passed by the Third Member. Since we are affirming the decision rendered by the majority, it will now be for the Tribunal to consider the issue of limitation".
5.1. Thus, in view of the above 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 1997 by the Revenue as noted by the Hon'ble Supreme Court which is reproduced below:
Page 13 of 18C/355, 356/2003 C/21182/2017 "2. The appellant herein is engaged in the manufacture of excisable goods falling under Chapters 85 and 90. From January, 1997 onwards the appellant had been manufacturing and clearing two models of D.C. Defibrillators which are known as Model No. DF2389R with recorder and Model 2389 without recorder. The appellant had filed classification declaration from time to time and classified the items under C.E.T. Heading 9018 and claimed exemption under Notification No. 8/96, dated 23-9-1996 and Notification No. 4/97, dated 1-3-97 respectively. The Revenue, however, took a view that the said Defibrillators were not eligible to the benefit of the aforesaid exemption Notifications. Therefore, by letter dated 17-2-98 it directed the appellant to modify its classifications declaration as only miniaturized implantable defibrillators were eligible to the benefit of the Notification. The appellant protested by giving reply and maintaining that the Notification in question encompassed the aforesaid goods manufactured by the appellant as well.
The department was not amused by the reply given by the appellant. It resulted in issuance of show cause notice dated 23-9-1998 whereunder demand duty with respect to Defibrillators manufactured during the period January, 1997 to March, 1998 was proposed as duty in the said show cause notice......................
5. As per the department, Defibrillators manufactured by the appellant were designed to provide external counter shock and the apparatus for which nil rate of duty had been prescribed was for defibrillators meant for internal use only and not for conventional Defibrillators manufactured and cleared by the appellant. The department had also invoked the longer period of limitation under Section 11A of the Excise Act by alleging suppression. The appellant filed their reply to the show cause notice contending mainly that the Defibrillators were meant both for internal and external use and that the allegation of suppression of fact was totally incorrect and therefore, the demand was time-barred. The appellant attended personal hearing and thereafter the Commissioner by order dated 19-11-1999 confirmed the demand of Rs. 27,71,326/- and imposed equivalent penalty under Section 11AC as well as further penalty of Rs. 1 lakh".
Page 14 of 18C/355, 356/2003 C/21182/2017 5.3. Inspite of being 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, Shri S. Rajendran, Factory Manager of the appellant also admitted that 'generally the DC Defibrillators manufactured and supplied from their unit were Defibrillators with external paddles only'. Shri S. Hariharan, General Manager of the appellant also admitted that common inputs used for both external and internal were cleared on payment of duty, thus admitting the fact that the benefit was eligible only for internal use. During investigation, it was found that the main use of the D.C. Defibrillator manufactured by the appellants was only for external use and the internal paddles for making use as internal defibrillators were optional and in 99% cases they have sold only the D.C. Defibrillator for external use and this optional paddle for internal use was not sold. This fact was well known to the appellants despite that they did not disclose these facts to the Department, thus the intention to evade duty by misdeclaration Page 15 of 18 C/355, 356/2003 C/21182/2017 is clear. Taking into consideration the fact that the appellant was aware that these components imported by them were not meant for internal use continued to declare in their Bills of Entry that they are meant for internal use inspite of the fact that at the time end-use, the benefit of Notification was being denied to them. The Commissioner in the impugned order notes that the appellant had furnished undertaking from time-to-time for furnishing the end-use certificates and failed to produce the same nor availed any extension of time. It is also noted by the Commissioner that the appellant was very well aware of the fact that the Central Excise Authorities on investigation had issued the notice denying the benefit of the Notification, and the appellant knew that they could not have obtained end-use certificates from the jurisdictional Central Excise Authorities, but continued to claim benefit of the Notification.
5.4. In view of the above, this is a clear case of mis-declaration and suppression of facts by the appellant in order to claim the benefit of Notification which was not available to them.
6. In the instance case, there is absolutely no ambiguity in the Notification which clearly states that the products meant for only internal use are eligible for the exemption and the appellant mis-declared that they are meant for internal use knowing very well that they manufacture defibrillators only for external use. The appellants reliance 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 Page 16 of 18 C/355, 356/2003 C/21182/2017 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/Commissioner(Appeals) in the impugned orders that the appellant was not in a position to file end-use certificates as required by the exemption Notification was very well known to the appellant and non-compliance of the end-use benefit was equivalent to non-availability of the exemption Notification. In view of the above, in Appeal No. C/355/2003, the demand is confirmed for the period from 1997-99 along with interest and penalty on the appellant. However, taking into consideration that there is no evidence of the fact that the General Manager, Shri. S. Hariharan had a role in suppressing the facts before the Customs Authorities in claiming the benefit while filing the Bills of Entry, is not forthcoming; hence, the question of imposing penalty on him does not arise. Accordingly, the penalty under Section 112(a) of the Customs Act, 1962 on Shri Hariharan is set aside.
7. In Appeal No. C/355/2003, the show-cause notice was issued on 16.07.2002 by Directorate of Revenue Intelligence, Bangalore wherein the statements from various officials of the appellant M/s. BPL Ltd., Pallaghat, Kerala was relied upon. It also takes note of the fact that the Central Excise Authorities at Cochin had issued notice dated 23.09.1998 denying the benefit Page 17 of 18 C/355, 356/2003 C/21182/2017 of the Notification. Since, these facts were already known to the Department, the notice dated 10.02.2004 in Appeal No. C/21182/2017 cannot invoke suppression once again, hence the demand is barred by limitation and hence, the entire demand is to be set aside.
8. In the result, Appeal No. C/355/2003 is dismissed; Appeal Nos. C/356/2003 and C/21182/2017 are allowed.
(Order pronounced in Open Court on 04.06.2025.) (D.M. MISRA) MEMBER (JUDICIAL) (R. BHAGYA DEVI) MEMBER (TECHNICAL) rv Page 18 of 18