Customs, Excise and Gold Tribunal - Tamil Nadu
Nagarjuna Hospitals vs Cc (Airport) on 5 August, 2003
Equivalent citations: 2003(89)ECC462, 2003(161)ELT971(TRI-CHENNAI)
JUDGMENT P.G. Chacko, Member (J)
1. The appellants had imported two medical equipments and cleared the same free of duty under Notification No. 64/88-Cus. vide Bills of Entry No. 44553 & 44555 dated 12.11.92. Such clearances were allowed on the basis of a Customs Duty Exemption Certificate (CDEC) produced from the Director General of Health Services. An Installation Certificate was also required to be produced by the importer as they were shown as a hospital of category 4 in the CDEC. However, this certificate was not produced. Moreover, the exemption certificate was withdrawn by the DGHS after finding that the importer had violated the conditions of the notification and had become ineligible for the exemption thereunder. The Commissioner of Customs, who passed the impugned order, considered the findings of the DGHS to the effect that the importer had not fulfilled the condition of free treatment of outdoor patients during the post-importation period. It was found by the DGHS, on enquiries, that during the period 1992-93 to 1997-98, the impo'rter had given free treatment to outdoor patients only to a limited extent ranging between 6% & 8% whereas the stipulated minimum was 40% under the notification. It was, further, found by the DGHS that all indoor patients whose family income was less than Rs. 500 per month had not been given free treatment in terms of the notification. These findings of the DGHS, duly communicated to the Commissioner, formed the basis for the finding of the latter that the importer had committed breach of the crucial post-importation conditions under the notification, thereby rendering the imported goods liable to confiscation as also rendering themselves liable to penalty. Accordingly, the adjudicating authority held that the goods covered under the two Bills of Entry were liable to confiscation under Section 111(o) of the Customs Act, and imposed a penalty of Rs. 10 lakhs on the party under Section 112(a) of the Act. Hence this appeal.
2. We have heard both the sides.
3. Ld. Counsel for the appellants reiterates the grounds of this appeal. When confronted with the decision of the Tribunal Larger Bench in Lady Amphthil Nurses Institutions v. Commissioner of Customs, 2002 (83) ECC 630 (LB) :2000 (150) ELT 776 as also with the relevant decisions of the Apex Court, learned counsel pleads for a lenient view.
4. Ld. DR strongly defends the impugned order on the strength of case-law.
5. We have examined the submissions. The Commissioner has recorded a finding that the appellants are also liable to pay duty of Rs. 7,68,445 on the equipments which were imported by them claiming the benefit of exemption under Notification No. 64/88-Cus. It has however been observed that it is not possible to demand the duty on account of limitation under the proviso to Section 28(1) of the Customs Act. This finding is not under challenge before us. The other two findings, which are now under challenge in the present appeal, are that the goods are liable to confiscation and the importer is liable to be penalised. The grounds for confiscation are irresistibly strong. The duty exemption certificate issued by the DGHS, on the strength of which the duty free clearances was effected, was subsequently withdrawn by that authority on the basis of results of a detailed enquiry. The enquiries conducted by the DGHS revealed that the party had neither fulfilled the condition of free treatment to the minimum extent of 40% of outdoor patients, nor the condition of free treatment of indigent inpatients with family income of less than Rs. 500 per month. This finding of the DGHS, based on the data collected by him, is not under challenge. The DGHS' communication to the Commissioner has also been incorporated in the impugned order, and we find that no finding of fact recorded thereunder is under challenge in this appeal. There is also a finding that Installation Certificate as required under the notification was not produced. There is no case for the appellants that the said certificate was produced subsequently. Thus the appellants have violated the crucial conditions prescribed under the aforesaid notification, disentitling themselves to the benefit of exemption thereunder. Such violation attracted Section 111(o) of the Act, which has been invoked by the Commissioner for holding the goods to be liable for confiscation. We do not see any reason to disturb the order of confiscation. The appellants have also been held to be liable to a penalty of Rs. 10 lakhs under Section 112(a) of the Customs Act. The facts and circumstances of the case do not call for any reduction of this penalty. We, therefore, have no option but to uphold the order passed by the Commissioner, and we do so. The appeal is dismissed.