Customs, Excise and Gold Tribunal - Mumbai
Anu Fertility And Contraception ... vs Commissioner Of Customs on 24 May, 2004
ORDER S.S. Sekhon, Member (T)
1. The appellants had imported certain Hospital equipments and accessories during the period July 1993 and October 1993 and cleared the same under exemption notification No. 64/88.
2. A show cause notice dt. 24.1098 was issued alleging that the appellants did not adhere to the condition Serial No. 2(a) of the notification in as much as free services on an Average, to at least 40% of their out door patients, was not proved to have been provided accordingly duty demands, interest and penalty propositions under Section 112(a) of the Customs Act, 1962 were proposed along with penalties under Section 114A and the equipment was proposed to be confiscated.
3. The Ld. Commissioner came to a finding that it could not be established that the appellants had observed the conditions of notification No. 64/88-Cus, and the reasons however lofty like annominity etc. for non-observance of the same or its verification would not change the fact of their being complied to be established. He confirmed the duty of Rs. 5,04,647/- and adjusted the same as deposited vide letter dt. 12.7.96. He dropped proposed action of confiscation under Section 111(o) of the Customs Act, 1962 and held that appellants were not to pay any interest under the provisions of Section 28AB of the Customs Act, read with Section 28 (2) of Customs Act. He also observed that nothing was brought out involving Dr. Mrs. K. Anuradha, Managing Director of the importer personally. No penalty was imposed on her. The Ld. Commissioner imposed however a penalty of Rs. 5,04,647/- on the appellants under Section 114A of the Customs Act.
4. When the matter was heard today the Ld. Advocate appearing for the appellants did not press the appeal. He raised the issue that the treatment being offered by this importer was, in the line of Fertility Clinic, which requires confidentiality and since notification No. 64/88 did not specify any particular procedure for keeping the records and the fact that the appellants like any other hospital did not maintain the records due to the peculiar line of treatment being given in the field of human fertility. Therefore the objection of non issue of free bills for patients treated free of should/charge could be verified from other documents and just because free bills were not issued it should/could not be concluded that patients were not treated free. Since the Ld. Advocate did not press on the recovery of duty no findings are being arrived thereon.
5. The appellants submits that imposition of penalty under Section 114A of the Customs Act, 1962 during the order 1993 is totally unjustified and unwarranted and they place reliance on CCE v. Elgi Equipments Ltd. [2001 (128) ELT 52 (S.C.)] holding that illegality committed prior to insertion of the section in the act cannot be subject matter of penalty, under Section 11AC (which correspondence to Section 114A of the Customs Act or of Central Excise Act, 1944). The Tribunal in the case of Gujarat State Export Corporation Ltd. v. Commissioner of Customs, Ahmedabad [2002 (145) ELT 661 (Tri.Mumbai)] has held that Section 114A cannot be resorted for allegation of mis-declaration and under valuation for the period prior to introduction of the section. While in the case of M. Irshad Ali v. Commissioner of Customs [2001 (137) ELT 1041 (Tri.Chennai)] it held that Section 114A of Customs Act, 1962 incorporated in September, 1996 and prospective in operation while bill of entry filed and clearance taken place in June 1996, it could not be invoked in the case of B.P.L. Ltd. v. CC, Chennai [2004 (60) RLT 897 (CESTAT-Ban.)] the Tribunal held that penalty under Section 114A was not leviable as period of demand in that case was prior to 28.9.96 . In the present case it is found from the order impugned that the Commissioner has come to a definite finding about the duty demand being reduced from Rs. 23,06,856/- to 5,04,647/- and the importer having been paid the duty vide letter dt. 17.2.98 interest was not payable as the interest was payable under Section 28AB on the date of filing of bills of entry i.e. 20.7.93 to 26.10.93 and did not come to law for confiscation of the goods. The findings do not indicate how & why he is maintaining the mandatory penalty at 100% under Section 114A. In the facts and circumstances of this we do not find any justification to uphold this imposition of mandatory penalty. We also rely on the decision of the Supreme Court in the case of BHEL v. State of M.P. [1998 (99) ELT 33 S.C.] wherein it was held by the Apex Court that the assessing officer should arrive at reasons why the mandatory penalty is being kept at the levels arrived at by him. In this case there is no finding arrived at by the Ld. Adjudicator why the mandatory penalty of under Section 114A has been kept at the level of 100%. In that view of the matter and the Supreme Court decision and other decisions hereinabove the penalty as imposed cannot be sustained.
6. Consequently the appeal is partially allowed by setting aside the penalty imposed.
(Pronounced in Court)