GEN/ADT/TAM/68/2025-GR 5B-O/O PR COMMR-CUS-ACC-CHENNAI I/2855904/2025
F. No. GEN/ADT/TAM/68/2025-GR 5B Dated: 18-04-2025
DIN: 20250473MU0000999F6E
Show Cause Notice No. 153/2025
(Issued under Section 28(4) read with Section 124 of the Customs Act, 1962)
Sub: Import of goods vide bill of entry No. 7320216/01.02.2022 and
others by M/s. B. BRAUN MEDICAL (INDIA) PRIVATE LIMITED – Non-
levy of Health Cess on import of Non-sterile Needle – Issuance of SCN–
Reg.
*****
M/s. B. BRAUN MEDICAL (INDIA) PRIVATE LIMITED, having office at Plot
No. P-11, First Avenue, Mahindra World City, Natham Sub Post, Chengalpet, Tamil
Nadu, 603002 bearing IEC No. 1788001770 (hereinafter referred to as
‘Importer’), had imported goods “NON-STERILE NEEDLE” and others under CTI
9018 3210 vide various Bills of Entry.
2. On scrutiny of the Bills of Entry during Post Clearance Audit, the CRA
observed the following points and their action thereof is detailed below:
2.1. As per Clause 139(1) of Fourth Schedule to Finance Bill, 2020 the Health
Cess (HC) is a Duty of Customs that is levied on certain goods imported into India
at the rate of 5 per cent for goods falling under headings 9018, 9019, 9020, 9021
and 9022. The value of the goods shall be calculated for the purpose of Customs
Duty under Section 14 of the Customs Act, 1962. In terms of Notification No.
08/2020-(Customs) dated 02-02-2020, exemption to Health Cess is available on
specified imported medical devices. The Exemption notification is not applicable to
Exports oriented Units (EOU), Advance Authorisation and Exports Promotion
Capital Goods Scheme.
2.2. Further, import of “Surgical needles falling under tariff item 9018 3210 for
use in manufacture of surgical sutures falling under tariff item 30061010” is
exempted from Health Cess was inserted into exemption Notification, vide Serial
No. 5 of Notification No. 15/2022-Customs dated 01.02.2022, (this notification
came into force on the 2nd of February 2022). However, Export Oriented Units
(EOU) are exempted from Health Cess under Notification No. 35/2024-Customs
dated 23.07.2024, with effect from 24.07.2024.
GEN/ADT/TAM/68/2025-GR 5B-O/O PR COMMR-CUS-ACC-CHENNAI I/2855904/2025
2.3. Moreover, it is observed that the said imported goods “Non-sterile
Needle”, are not used for manufacture of surgical sutures and not used for
surgical instruments. Non-sterile needles are typically made from plastic, while
surgical needles are made from stainless steel. Non-sterile needles are used to
prevent the introduction of bacteria and pathogens into a wound, while surgical
needles are used for procedures like tendon repair and use in manufacture of
surgical sutures falling under CTH 30061010.
2.4 In view of the above, it is observed that the importer had imported certain
goods vide various bills of entry as per the attached Annexure, under CTI
90183210 with exemption to Health Cess. However, “Non-sterile Needle”, are not
used for manufacture of surgical sutures and surgical instruments. Hence, the
subject goods have to be leviable to Health Cess at the rate of 5%. Social Welfare
Surcharge (SWS) would also be leviable @ 10% on Health Cess. It is found that
the importer had paid Health Cess for the period 03.04.2020 to 28.01.2022. The
importer is therefore, required to discharge applicable Health Cess (HC)
and Social Welfare Surcharge (SWS) with effect from 01.02.2022 onwards. Thus,
the assessable value of the goods for the period from 01.02.2022 to 23.07.2024
worked out to ₹ 108,45,56,779/- (Rupees One Hundred Eight Crores, Forty-Five
Lakhs, Fifty-Six Thousands, Seven Hundred Seventy-Nine only) as detailed in
'Annexure-II'. Therefore, the consequential differential duty (Health Cess + Social
Welfare Surcharge) works out to Rs. 5,96,50,623/- (Rupees Five Crores, Ninety-
Six Lakhs, Fifty Thousands, Six Hundred and Twenty-Three only) as detailed in
the 'Annexure.
3. Legal Provisions
3.1 Section 46 (1) of the Customs Act, 1962 , the importer of any goods,
other than goods intended for transit or transhipment, shall make entry thereof by
presenting electronically on the customs automated system to the proper officer a
bill of entry for home consumption or warehousing in such form and manner as
may be prescribed.
3.2 Section 46(4) of Customs Act 1962 , the importer while presenting a bill of
entry shall make and subscribe to a declaration as to the truth of the contents of
such bill of entry and shall, in support of such declaration, produce to the proper
officer the invoice, if any, and such other documents relating to the imported
goods as may be prescribed.
3.3 Section 46 (4A) of the Customs Act, 1962 , the importer who presents a
bill of entry shall ensure the following, namely: — a) the accuracy and
completeness of the information given therein; b) the authenticity and validity of
any document supporting it; and c) compliance with the restriction or prohibition,
if any, relating to the goods under this Act or under any other law for the time
being in force.
3 . 4 Section 17(1) of the Customs Act, 1962 discusses the Assessment of
duty as follows:
1. An importer entering any imported goods under section 46, or an exporter
entering any export goods under section 50, shall, save as otherwise
provided in section 85, self-assess the duty, if any, leviable on such goods.
2. The proper officer may verify the entries made under section 46 or section
50 and the self-assessment of the goods referred to in sub-section (1) and
GEN/ADT/TAM/68/2025-GR 5B-O/O PR COMMR-CUS-ACC-CHENNAI I/2855904/2025
for this purpose, examine or test any imported goods or export goods or such
part thereof as may be necessary.
3. For the purpose of verification under sub-section (2), the proper officer may
require the importer, exporter or any other person to produce any document
or information, whereby the duty leviable on the imported goods or exported
goods, as the case may be, can be ascertained and thereupon, the importer,
exporter or such other person shall produce such document or furnish such
information.
4. Where it is found on verification, examination, or testing of the goods or
otherwise that the self-assessment is not done correctly, the proper officer,
may without prejudice to any other action which may be taken under this
Act, re-assess the duty leviable on such goods.
3.5 Section 28 (4) of the Customs Act, 1962 , where any duty has not been
levied or not paid or has been short-levied or short-paid or erroneously refunded,
or interest payable has not been paid, part-paid or erroneously refunded, by
reason of, - a) collusion; or b) any wilful mis-statement; or c) suppression of facts,
by the importer or the exporter or the agent or employee of the importer or
exporter, the proper officer shall, within five years from the relevant date, serve
notice on the person chargeable with duty or interest which has not been so levied
or not paid or which has been so short-levied or short-paid or to whom the refund
has erroneously been made, requiring him to show cause why he should not pay
the amount specified in the notice.
3.6 Section 28AA of the Customs Act, 1962 provides for levy of interest on
delayed payment of duty.
(1) Notwithstanding anything contained in any judgment, decree, order or
direction of any court, Appellate Tribunal or any authority or in any other provision
of this Act or the rules made there under, the person, who is liable to pay duty in
accordance with the provisions of section 28, shall, in addition to such duty, be
liable to pay interest, if any, at the rate fixed under sub-section (2), whether such
payment is made voluntarily or after determination of the duty under that section.
3.7 Section 111(m) of Customs Act, 1962 provides for confiscation of
improperly imported goods and the applicable sub-section is (m) which has been
detailed below,
(m) any goods which do not correspond in respect of value or in any other
particular with the entry made under this Act or in the case of baggage with the
declaration made under Section 77 in respect thereof, or in the case of goods
under
transshipment, with the declaration for transshipment referred to in the proviso to
subsection (1) of section 54.
3.8 Section 111 (o) of Customs Act, 1962 provides for confiscation of
improperly imported goods and the applicable sub-section is (o) which has been
detailed below,
(o) provides any goods exempted, subject to any condition, from duty or any
prohibition in respect of the import thereof under this Act or any other law for the
time being in force, in respect of which the condition is not observed unless the
non-observance of the condition was sanctioned by the proper officer.
GEN/ADT/TAM/68/2025-GR 5B-O/O PR COMMR-CUS-ACC-CHENNAI I/2855904/2025
3.9 Section 112 (a) of Customs Act, 1962 provides for penalty for improper
importation of goods, in respect of persons
(a) who, in relation to any goods, does or omits to do any act which act or
omission would render such goods liable to confiscation under section 111, or
abets the doing or omission of such an act.
3.10 Section 114A of Customs Act, 1962 provides for Penalty for short-levy
or non-levy of duty in certain cases
Where the duty has not been levied or has been short-levied or the interest has
not been charged or paid or has been part paid or the duty or interest has been
erroneously refunded by reason of collusion or any wilful mis-statement or
suppression of facts, the person who is liable to pay the duty or interest, as the
case may be, as determined under sub-section (8) of section 28 shall also be liable
to pay a penalty equal to the duty or interest so determined.
3.11 Board's Circular no. 17/2011 dated 08.04.2011 specifies that
'SelfAssessment' of Customs duty in respect of imported and export goods by the
importer or exporter, as the case may be. This means that while the responsibility
for assessment would be shifted to the importer/ exporter, the Customs officers
would have the power to verify such assessments and make re-assessment, where
warranted and further clarifies that "2..... The importer or exporter at the time of
self-assessment will ensure that he declares the correct classification, applicable
rate of duty, value, benefit of exemption notifications claimed, if any, in respect of
the imported/ exported goods while presenting Bill of Entry or Shipping Bill. and
that "6. In cases, where the importer or exporter is not able to determine the duty
liability/ make assessment for any reason, except in cases where examination is
requested by the importer under proviso to sub-section (1) of Section 46, a
request shall be made to the proper officer for assessment of the same under
Section 18(a) of the Customs Act, 1962. In this situation an option is available to
the proper officer of Customs to resort to provisional assessment of duty by asking
the importer/ exporter to furnish security as deemed fit by the proper officer for
differential duty equal to duty provisionally assessed and finally payable after
assessment.
In this regard, it is clarified that importer should not resort to this provision in a
routine manner and it is expected that this would be done in deserving cases only
where importer or exporter is not able to assess the goods for duty for want of
certain information/ documents etc.
As far as possible, steps should be taken to provide guidance to importers/
exporters so that they are able to self-assess and file the Bill of Entry. It should
however be made clear that such guidance is not legally binding.
4. Self-Assessment in Customs has been implemented with effect from
08.04.2011 vide Finance Act, 2011 by making suitable changes to Sections 17, 18,
46 and 50 of the Customs Act, 1962. The Central Board of Excise and Customs has
issued Circular No.17/2011-Customs dated 08.04.2011 regarding implementation
of Selfassessment in Customs. In order to sensitise the people of trade about its
benefit and consequences of mis-use, the Government of India has also issued
'Customs Manual on Self-Assessment, 2011'. Self-Assessment interalia requires
importers/ exporters to correctly declare value, classification, description of goods,
exemption notifications, etc. and self-assess the duty thereon, if any. With the
GEN/ADT/TAM/68/2025-GR 5B-O/O PR COMMR-CUS-ACC-CHENNAI I/2855904/2025
introduction of self-assessment, more faith is bestowed on the importers/
exporters, as the practices of routine assessment, concurrent audit etc. have been
dispensed with. Para 3(a) of Chapter 1 of the above Manual further stipulates that
the importer/ exporter is responsible for self-assessment of duty on
imported/exported goods and for filing all declarations and related documents and
confirming these are true, correct and complete.
5. Whereas, it appears clear from the foregoing narration that the importer has
willfully evaded payment of applicable duty in respect of the goods imported and
cleared the goods in contravention of the provisions of the Customs Act, 1962. As
per extant instructions, the onus of providing the correct declaration rests on the
importer and all facilitation is conditional to the same. With the introduction of
self-assessment under Section 17, more faith is bestowed on the importers, as
the practices of routine assessment, concurrent audit, etc. have been dispensed
with and the importers have been entrusted with the responsibility to correctly
self-assess the duty. However, in the instance case, the importer intentionally
abused this faith placed upon it by the law of the land. Therefore, it appears that
the importer has willfully violated the provisions of Section 17(1) of the Act
inasmuch as they have failed to correctly self-assess the impugned goods and has
also willfully violated the provisions of Sub-section (4) and (4A) of Section 46 of
the Act. Therefore, it appears that in respect of Bills of Entry mentioned in
Annexures, such evasion of payment of applicable Duty on the impugned goods,
on the part of the importer has resulted into short levy of duty amounting to Rs.
5,96,50,623/- (Rupees Five Crores, Ninety Six Lakhs, Fifty Thousands, Six
Hundred and Twenty-Three only) which is recoverable from the importer under
the provisions of Section 28(4) of the Customs Act, 1962, along with interest as
applicable under Section 28AA of the Act. In view of the willful evasion of
payment of applicable duty during self-assessment by the importer in respect of
the impugned goods, resulting into short-levy of duty, it appears that the
importer has rendered the goods mentioned in Annexure, liable for confiscation
under Section 111(m) &(o) of the Customs Act, 1962. For such acts/ omissions
and the said deliberate wrong self assessment of duty, the importer also appears
to have rendered themselves liable to penalty under Section 112(a) and/or
Section 114A ibid
6. In view of the above, the importer M/s B. Braun Medical (India) Private
Limited, is hereby called upon to Show Cause within 30 days of receipt of this
notice, to the Principal Commissioner/Commissioner of Customs, Chennai-VII
Commissionerate at New Custom House, Meenambakkam, Chennai-600 016, as
to why:
i. The exemption of Health Cess claimed for the goods imported under CTI
90183210 should not be rejected in respect of the impugned goods,
declared as “NON-STERILE NEEDLE”, imported vide various bills of entry and
why they should not be re-assessed and levied to Health Cess at the rate of
5% and Social Welfare Surcharge (SWS) at the rate of 10%, since “Non-
sterile Needle” are not used for manufacture of surgical sutures and surgical
instruments by the importer.
ii. Consequent to the above re-classification and re-assessment the total
differential duty amount of Rs. 5,96,50,623/- (Rupees Five Crores, Ninety Six
GEN/ADT/TAM/68/2025-GR 5B-O/O PR COMMR-CUS-ACC-CHENNAI I/2855904/2025
Lakhs, Fifty Thousands, Six Hundred and Twenty-Three only) (as detailed in
the 'Annexure II') for the period from 01.02.2022 to 23.07.2024, should not
be demanded under Section 28(4) of the Customs Act, 1962, along with
applicable amount of interest under Section 28AA of the Customs Act, 1962.
iii. The impugned goods valued at Rs. 108,45,56,779/- (Rupees One hundred
eight crores, forty-five lakhs, fifty-six thousands, seven hundred seventy-
nine only) (Assessable Value) should not be held liable for confiscation under
Section 111(m) of the Customs Act, 1962.
iv. Penalty should not be imposed under Section 112(a) of the Customs Act,
1962, for rendering the goods liable for confiscation.
v. Penalty should not be imposed under Section 114A of the Customs Act, 1962,
for willfully evading the payment of applicable duty by way of mis-
classification.
7. In their reply, the noticee should state whether they would like to be heard
in person or not before the case is decided. If no reply is received within the
stipulated time or the noticee does not appear for personal hearing on the date
and time intimated, the case will be decided based on the facts available on record
without any further notice/ reference to the importer in this regard.
8. This notice is issued without any prejudice to any other action or proceedings
which may be initiated against the noticee under the Customs Act, 1962 or any
other law for the time being in force in India.
9. The Department reserves the right to add, alter, amend, modify or
supplement this notice on the basis of any evidence mentioned and material facts
related to the case instant, which may come to notice of Department after
issuance of this notice and prior to adjudication of the case. The documents relied
upon as per list are enclosed.
10. Attention is invited to Section 28(5) and 28(6) of the Customs Act, 1962
according to which, if the amount of duty along with interest payable thereon
under Section 28AA ibid and 15% penalty has been paid in full within thirty days
from the date of receipt of the notice, then, the proceedings against such person
to whom the notice is issued under Section 28(4) shall be deemed to be
concluded.
Encl. as above.
सीमाशु क आयु , चे ई -VII
Commissioner of Customs, Chennai-VII
To
M/s. B. BRAUN MEDICAL (INDIA) PRIVATE LIMITED,
Plot No. P-11, First Avenue,
Mahindra World City, Natham Sub Post,
GEN/ADT/TAM/68/2025-GR 5B-O/O PR COMMR-CUS-ACC-CHENNAI I/2855904/2025
Chengalpet, Tamil Nadu, 603002.
Copy to:
1. The Dy./Asst. Commissioner, IAD-CRA, Air Cargo Commissionerate,
New Custom House, Chennai – 600 016.
2. The Assistant Commissioner (CAU), Air Cargo Commissionerate,
New Custom House, Chennai – 600 016
3. Notice Board
4. Office Copy
