Tribunal strikes down fine, penalties imposed on medical equipment importer

KARACHI: The Customs Appellate Tribunal has set aside the order-in-original along with the fines and penalties imposed by Adjudication on a medical equipment importer.

M/s Medico Health Care imported medical equipment, Anesthesia and Spinal chord needles and sought clearance under PCT 9018.3950.

However, the appraising authority found that importer had mis-declared the goods and HS Code to avoid proper levy of duty and taxes. The assessment authority deemed PCT 9018.3200 to be appropriate.

A show cause notice was issued by the Customs Collectorate to the appellant following which the goods were confiscated by the order of Customs Adjudication. The importer was however given an opportunity to redeem the consignment on payment of 20 percent redemption fine. A penalty of Rs100,000 was also imposed.

The importer approached Tribunal and maintained that it imported Spinal Needles used for surgical and epidural anesthesia and the respondent Collectorate West has wrongly classified the surgical needle as tubular needle without considering the structural  difference between the two i.e  tubular metal needle and surgical needle and that consignment be treated under HS 9018.3950 instead of HS 9018.3200.

During hearing of appeal, the tribunal ordered a comparative study of imports identical in nature by different firms and from different countries. The data  collected  during study  for the period November 2014 and December 2014 revealed that respondent Collectorate wrongly classified the spinal needles under heading 9018.3200 which attracted custom duty of 20 percent while in similar cases (import by other firms /companies) Custom Duty has been charged at a rate of 5 per cent.

The tribunal held that treatment with appellant company was against the principles of natural justice and equity. As the error of classification and resultant delay in clearing of the consignment was due to the respondent Collectorate of Customs West, the appellate tribunal also ordered waiver of the wharfage, storage and demurrage charges.

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