G.A. Brahma Deva, Member (J)

1. This appeal arises out of and is directed against the Order-in-Original No. 119/88 dated 30-8-1988 passed by the Additional Collector of Customs, New Delhi.

2. The appellant Company imported 5 consignments of disposable and sterile needles of "Misawa" make in the month of January, 1988 and sought for clearance through bills of entry as "Veni puncture control system needles (Haemodialysers and accessories/spares" as it is duty free under Notification No.208/81 dated 22-9-1981 as amended vide Serial NO. 8 (XXVI) and also under OGL vide appendix-6 list 2 Item No. 16, as haema filtration instrument/haemodialyser and Accessories/spares thereof of FTC Policy 1985-88. On examination by the Department, the goods imported by the Appellant Company were found to be of disposable needles, 10,000 pieces per carton/box and on the marking of these boxes were found to be as follows :-

xxx

According to the Department, the appellants misdeclared the goods with a view to clear the goods under OGL as also to claim examination under Notification No. 208/81 dated 29-8-1981 as the imported goods as per description given on L/C is different from the description of goods given on the bill of entry.

3. A show cause notice was issued calling upon them to show cause as to why the action should not be taken under the provisions of Import & Export Control, 1955 and why the goods should not be confiscated under Section 111(1) & 111(m) of the Customs Act for importing the goods without proper licence and for misdeclaration and to levy penalty under Section 112(a) of the Customs Act, 1962. This show cause notice was duly answered by the appellants contending that the imported needles having multiple applications and these types of needles are used in Haemo dialysers & therefore, considered as veni puncture control system needles or for femoral haemo dialyser set and alternatively claimed exemption as it was covered under OGL Appendix & serial No. 48 as these needles meant for dental purposes. Additional Collector of Customs who adjudicated the case held that the goods did not fall under any of the items mentioned above and not entitled for exemption and accordingly, he ordered for confiscation of the goods and gave option to redeem the goods on payment of fine for Rs. 1,50,000/- and a penalty of Rs. 25,000/- was also imposed.

4. We have heard Shri L.U. Balani with Shri R.R. Gupta, Advocates for the appellants and Shri Ramchandani, S.D.R. for the respondent.

5. Shri Balani, the learned counsel for the appellants submitted that imported goods, viz., Disposable and sterile needles have intravenous application in , Haemodialysis and as such, they are part of the veni puncture control system as appearing in serial No. 8 (XXVI) of Notification No. 208/81 dated 22-9-1981 and as such, benefit of exemption cannot be denied. Further he submitted that these needles find use in Femoral Haemo Dialysers as they answer the description "Accessories/spares of Haemodialysers" appearing in Item No. 16 of List 2 of Appendix 6 of Import Policy 1985-88 and therefore, qualify for import under the OGL. Further he submitted that the said needles also find dental application and as such also qualify for import as Disposable and Sterile needles used in Disposable Syringes vide Item No. 48 of List 6 of Appendix 6 of the said Import Policy. He showed us a sample of the product and stated that it is a needle which can be used in veni puncture system as well as dental application and the Adjudicating authority erred in observing that description given in the catalogue is not tallying with the sample. Further, he urged that it was the practice to allow such needle in the past clearance and in view of this past clearance and specific inclusion of the very item "hypodermic needles for Dental Cartridge system-disposable" under Item 50 of List 6 Appendix 6 of ITC Policy 1988-91. Hence, the goods should be cleared. In support of his argument, he cited a decision of