Customs, Excise and Gold Tribunal - Delhi
M/S. Ct Scan Research Centre (P) Ltd. vs Commissioner Of Customs, New Delhi on 28 March, 2001
ORDER
S.S. Kang, Member
1. Appellants filed this appeal against the adjudication order dated 30.3.2000 passed by the Commissioner of Customs.
2. Brief facts of the case are that appellants made import of One Computerized Axial Tomography Scanner and a spare C.T.X-ray Tube vide Bill of Entry dated 24.7.91 and claimed the exemption under Notification No.64/88-CUS. dated 1.3.88 and the same were cleared at the Nil rate of duty by extending the benefit of Notification No.64/88-Cus. dated 1.3.88. On 17.9.98 a show cause notice was issued to the appellants for confiscation of the above mentioned goods under Section 111(0) and penal Section 112 of the Customs Act on the ground that this had contravened the provision of Notification No. 64/88/Cus. dated 1.3.1988.
3. After considering the reply and after affording an opportunity of personal hearing of the appellants, the Commissioner of Customs ordered the confiscation of the goods imported by the appellants and gave an option to redeem the goods on redemption fine of Rs.25 lakhs. The Commissioner of Customs also demanded the duty of Customs as were applicable at the relevant time and penalty of Rs.2.5 lakhs was imposed on the appellants.
4. Learned Counsel appearing on behalf of the appellants submits that the show cause notice issued on 17.9.98 for the goods which were imported in the year 1990-91 is time barred. As per the provisions of Section 28 of Custom Act, 1962, the notice was to be served within six months as per the date of import. He submits that even assuming the condition of Notification No.64/88-Cus. had not been fulfilled, since the appellants had not been required to execute a Bond at the time of clearance of the goods, the action of Department asking the duty and confiscation of the goods and imposing penalty after 5 years is not sustainable. As regards the reliance placed by the Commissioner in the impugned order on the decision of the Hon'ble Supreme Court in the case of Mediwell Hospital and Health Care Pvt. Ltd. Vs. Union of India, reported in 1997 (89) E.L.T. 425 (S.C.) his submission is that the judgement had only stated that, if, the condition of the notification had not fulfilled, the duty become payable. The learned Advocate submits that such demand of duty will be governed by the provisions of Section 28 of the Customs Act. As the present show cause notice is issued even after the expiry of 5 years, no demand of duty is sustainable. He, further submits that the show cause notice was issued by the Assistant Commissioner of Customs after six months from the date of import. The provisions of Section 28 of Customs Act provides that where the show cause notice is issued after extending the period of limitation of six months, only the Commissioner of Customs is competent to issue such notice. He relies upon the decision of Hon'ble Supreme Court in the case of Collector of Central Excise, Indore Vs. Oil & Natural Gas Commission, reported in 1998 (103) E.L.T. 3 (S.C.). He, therefore, submits that the appeal be allowed.
5. Learned SDR appearing on behalf of the Revenue relied upon the decision of the Hon'ble Supreme Court in the case of Mediwell Hospital And Health Care Pvt. Ltd. Vs. Union of India, reported in 1997 (89) E.L.T. 425 (S.C.) and submits that the Hon'ble Supreme Court held that conditions and obligations under notification are continuous obligation. The notification provides certain conditions for availing the duty exemption. Therefore, the appellants are under obligation to observe and fulfil all the conditions contained in the notification and failure on his part render him liable for payment of duty and the goods are liable for confiscation. He, therefore, prays that the appeal be dismissed.
6. Heard both sides.
7. In this case the appellants made an import of the goods vide Bill of Entry dated 24.7.91 claiming the benefit of notification No.64/88-Cus. dated 1.3.88. As the appellants were found to be eligible for the benefit of this notification, the goods were cleared at the Nil rate of duty extending the benefit of notification. A show cause notice was issued on 17.9.98 on the ground that appellants not fulfil the port importation conditions of Notification No.64/88-Cus. dated 1.3.88. The contention of the appellants is that show cause notice was issued after 5 years, therefore, the demand of duty is time barred as per the provisions of Section 28 of the Customs Act. The Hon'ble Supreme Court in the case of Mediwell Hospital And Health Care Pvt. Ltd. Vs. Union of India (Supra) held that conditions imposed in the Notification No.64/88-Cus. dated 1.3.88 must be achieved and the authority who had given such certificate of exemption were ensured the obligation on the persons availing the exemption under the notification fulfil the said conditions and where the such conditions have not been fulfilled, they can enforce realisation of the customs duty from the importer. Section 28 of the Customs Act provides a time period for demand of duty of six months and in the case of fraud, collusion etc. 5 years. We find that since the show cause notice has been issued beyond the permissible period of 5 years provided under Section 28 of the Customs Act, hence the decision of the Hon'ble Supreme Court in the case of Mediwell Hospital And Health Care Pvt. Ltd. Vs. Union of India (Supra) cannot be said to apply to the facts of the present case as the demand is time barred.
8. Further, we find that in the present case show cause notice was issued (sic) by invoking the provisions of extended period of limitation by the Assistant Commissioner. Therefore, we find that the show cause notice is without jurisdiction as per provisions of Section 28(1) of the Customs Act.
9. In view of the above discussion, we find that the show cause notices is hit by limitation as well beyond the jurisdiction of authority who issued the notice, therefore, the impugned order is set aside and the appeal is allowed.