Custom, Excise & Service Tax Tribunal
Hurkisondas Nurrotumdas vs Commissioner Of Customs (Imports), ... on 28 December, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No.C/132/03 (Arising out of Order-in-Original No.S/26-Misc/283/2002 Gr.VB dated 22/10/2002 passed by Commissioner of Customs (Imports), Mumbai) For approval and signature: Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. S.K. Gaule, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
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Hurkisondas Nurrotumdas
Hospital & Research Centre Appellant
Vs.
Commissioner of Customs (Imports), Mumbai Respondent
Appearance:
Shri.J.C. Patel, Advocate for appellant
Shri.S.S. Katiyar, SDR, for respondent
CORAM:
Honble Mr. P.G. Chacko, Member (Judicial)
Honble Mr. S.K. Gaule, Member (Technical)
Date of Hearing : 28/12/2010
Date of Decision : 28/12/2010
ORDER NO
Per: P.G. Chacko
1. This appeal filed by the assessee is directed against the Commissioners order passed in adjudication of show-cause notice dated 07/02/2002. The appellant is a hospital. They had imported certain medical equipments during the period from August 1988 to August 1993 and cleared the same duty- free under Notification No.64/88-Cus dated 01/03/88 on the strength of Customs Duty Exemption Certificates (CDECs) issued by the Directorate-General of Health Services (DGHS), New Delhi. Many of these equipments were cleared through the Air Cargo Complex at Sahar and the rest through Customs House, Mumbai. The goods cleared through the Customs House are the subject matter of the present appeal. The goods cleared through the Air Cargo Complex were the subject matter of another show-cause notice, in adjudication of which the Commissioner of Customs (ACC), Mumbai passed order-in-original No.52/02 dated 07/08/2002 confiscating the goods under Section 111 (o) of the Customs Act with option for redemption thereof against payment of fine of Rs.2.00 lakhs and imposing a penalty of Rs.50,000/- on the importer under Section 112 (a) of the Act, apart from demanding duty of over Rs.76.00 lakhs from them. Appeal No.C/1468/02 filed by the hospital against the said order-in-original No.52/02 was allowed by this bench vide order No.A/348/10/CSTB/C-II dated 06/10/2010.
2. The operative part of order-in-original No.400/2002 dated 22/10/2002 passed by the Commissioner in adjudication of show-cause notice dated 07/02/2002 covering the medical equipments, which were cleared through the Customs House, Mumbai, read as follows:-
a) I order the confiscation of the goods valued at Rs.12,96,370/- mentioned in Annexure 1 to the present show cause notice under the provisions of Section 111 (o) of the Customs Act, 1962. However, the importer may redeem them on payment of a fine of Rs.2,00,000/- under section 125 of the Customs Act 1962 within thirty days of this order.
b) I impose a penalty of Rs.50,000/- on M/s.Hurkisondas Narottamdas Hospital and Medical Research Centre, Mumbai under Section 112 (a) of the Customs Act, 1962.
c) The benefit of Notification No.64/88-Cus dated 01/03/88 is denied and accordingly the hospital is directed to immediately pay the duty of Rs..5,16,153/-.
d) I also order payment of interest @ 24% per annum for deferred payment of duty.
e) The proceedings against the DGHS are dropped.
3. Reiterating the grounds of the present appeal against the above order of the Commissioner, the learned Counsel submits that the impugned order is only liable to be set aside by following order No.A/348/2010/CSTB/C-II dated 06/10/2010 inasmuch as the two show-cause notices were issued on the basis of the results of common investigations and the substantial issue involved in the present case is identical to the one settled by this bench in the earlier case. It is submitted that, as rightly held by this bench in order No. A/348/2010/CSTB/C-II dated 06/10/2010 ibid, the department has no jurisdiction to proceed against the appellant-hospital in terms of Notification No.64/88-Cus on the ground that they committed breach of conditions of Notification after the date on which it was rescinded . It is submitted that the relevant show-cause notice alleged breach of conditions of the Notification for 1994-95 and did not allege any such breach of conditions for any period prior to 28/02/94, the date on which the Notification was rescinded. Therefore, the above final order is squarely applicable to the present case.
4. On the other hand, the learned SDR submits that, in the case of Central India Institute of Medical Science Vs. Commissioner 2008 (231) ELT 113 (Tri-Mumbai), this bench had, on a similar sets of facts, held that a hospital which had imported medical equipments duty-free in terms of Notification No.64/88-Cus could be proceeded against even after the date of rescission of Notification on the ground that they committed breach of the conditions of the Notification after such date. It is submitted that, in the said case, this bench had relied on the Honble Bombay High Courts decision in Shah Diagnostic Institute Pvt. Ltd. Vs. Union of India 2008 (222) ELT 12 (Bom.) after considering the Honble Madras High Courts decision in Appollo Hospitals Enterprises Ltd. Vs. Union of India 2001 (133) ELT 58 (Mad.). It is also submitted that this bench had also distinguished the Larger Benchs decision in the case of Bharat Diagnostic Centre Vs. Commissioner 2007 (207) ELT 113 (Tri-LB) in the above case of Central India Institute of Medical Science. In these circumstances, it is submitted that there is a clear conflict of views, on similar sets of facts, between the decision of this bench in Central India Institute of Medical Science case and order No.A/348/2010/CSTB/C-II dated 06/10/2010 passed by this bench in appeal No.C/1468/02 in the earlier case of the present appellant. It is suggested that the issue be referred to a Larger Bench.
5. The learned Counsel has opposed the plea for reference to Larger Bench. He submits that the decision of the Larger Bench in Bharat Diagnostic Centres case has already settled the same issue against the Revenue and the same is binding on this bench. There is no conflict of views in the face of the Larger Benchs decision and hence there is no reason for any reference as suggested by the learned SDR.
6. We have given careful consideration to the submissions. It is not in dispute that the facts of the case are similar to those of the same assessees case covered by final order No. A/348/2010/CSTB/C-II dated 06/10/2010 ibid. Both the show-cause notices were issued on the basis of the results of common investigations. The imports through the Air Cargo Complex and the imports covered by the present case were made during the same period (August 1988 to August 1993). The show-cause notices raised identical allegations and proposals. The substantive issue in both the case is essentially the same, i.e., whether it was open to the department to initiate action against the appellant after 28/02/1994 (date of rescission of the Notification No.64/88-Cus) on the ground that they violated the conditions of Notification after the said date. After considering the case law including the Madras High Courts judgement in the case of Appollo Hospitals Enterprises Ltd., the Bombay High Courts judgement in the case of Shah Diagnostic Institute Pvt Ltd., the Tribunals Larger Benchs decision in the case of Bharat Diagnostic Centre and the earlier decision of this bench in the case of Central India Institute of Medical Science, we answer the above question in the negative in favour of the appellant. The Larger Bench decision is squarely applicable to the present case.
7. There is no valid reason for any reference to Larger Bench inasmuch as our decision is supported by the following findings of the Larger Bench in Bharat Diagnostic Centre case.
A careful reading of the above? paragraphs reveal that the authorities can enforce the obligations only during the period when 64/88 was in force and not for the subsequent period. How to interpret this? The life of the Notification 64/88 is the period from 1-3-1988 to 28-2-1994. In the present case, the appellants imported the goods on 9-1-1992. The point is, by virtue of import of medical equipments free of duty under Notification 64/88, the appellants are under obligation to fulfill the conditions of the Notification. The period of the obligation is from the date of import to the date of rescission of the Notification. The violation of the Notification may be noticed by the authorities either during the life of the Notification or afterwards. It is the contention of the appellants that if the violation of the Notification during the period of its life is detected after the rescission of the Notification, no action can be taken by the authorities. This interpretation is not correct. There is nothing in the decision of the Apollo Hospitals case which warrants such inference. What all we can infer is that with the rescission of notification 64/88, there is no obligation on the part of the appellant after 1-3-1994.
8. Keeping in view the above findings of the Larger Bench, we find no surviving conflict of views warranting any reference.
9. In the result, the impugned order is set aside and this appeal is allowed.
(Pronounced in Court) (S. K. Gaule) Member (Technical) (P.G. Chacko) Member (Judicial) pj 1 2