Custom, Excise & Service Tax Tribunal
Mr. Ganesh Havanur, Additional ... vs Mr. Derrick San, Advocate For on 26 July, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL BENCH
AT BANGALORE.
Date of hearing: 26.07.2012
Date of decision: 26.07.2012
Customs Appeal Nos. 492 & 493 of 2006
[Arising out of Order (Original) Nos. 59/2005 dated 23.12.2005
and 61/2005 dated 30.12.2005, passed by the Commissioner of Customs, Cochin]
For approval and signature:
Honble Shri P. G. Chacko, Member (Judicial)
Honble Shri M. Veeraiyan, Member (Technical)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not ? Yes
3. Whether Their Lordships wish to see the fair copy of the Order? Seen
4. Whether Order is to be circulated to the Departmental authorities? Yes
Commissioner of Customs,
Cochin.
Vs.
M/s Medical Trust Hospital, Appellant
Respondent
Ernakulam.
Appearance:
Mr. Ganesh Havanur, Additional Commissioner (AR) for appellant Mr. Derrick San, Advocate for respondent CORAM Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. M. Veeraiyan, Member (Technical) ORDER NO. dated 26.7.2012 [Order per: P.G. Chacko] : The respondent in these appeals of the department is a hospital which imported medical equipments duty-free under Notification No. 64/88-Cus dated 1.3.88 during the period from November 1988 to September 1993. Under the said notification, the hospital had continuing obligation to provide free treatment to at least 40% of their outdoor patients and also reserve at least 10% of the hospital beds for indoor patients from poor families with income less than Rs. 500/- per month. Later on, the department conducted investigation to find out whether the hospital was duly discharging their continuing liabilities under the notification. In this process, the hospital was called upon to produce their records. Statements were recorded from the functionaries of the hospital, wherein they admitted that they had not maintained records with regard to free treatment to outdoor patients or reservation of beds for poor indoor patients. Whatever records available were supplied to the investigators. On the basis of the results of the investigations, two show-cause notices were issued, one covering their imports from November 1988 to June 1992 and the other covering the rest of the imports (September 1993). These show-cause notices sought to recover the duty of Customs foregone under the aforesaid notification, confiscate the imported equipments and impose penalties on the respondent. The demands and allied proposals were contested. In adjudication of the dispute, the learned Commissioner of Customs ordered confiscation of the equipments and imposed penalties on the hospital apart from demand of duty with interest, in two separate orders. These orders were taken in appeal to this Tribunal and both the appeals were allowed by remand vide Final Order Nos. 1013 to 1031/2003 dated 07.8.2003, wherein the Commissioner was required to undertake de novo adjudication of the cases in line with earlier Final Order Nos. 1550 - 1552/2002 dated 4.12.2002 of the Tribunal. The orders impugned in the present appeals of the department were passed in pursuance of the remand order.
2. In the impugned orders, the learned Commissioner dropped the demand of duty and allied proposals after holding that the hospital had substantially complied with the obligations attached to the Notification No. 64/88-Cus ibid.
3. In the present appeals, the department deals with the relevant conditions of the notification, discusses two judgments of the Honble Supreme Court vide Commissioner of Customs (Import), Mumbai vs. Jagdish Cancer and Research Centre [2001 (132) E.L.T. 257 (S.C.)] and Mediwell Hospital and Health Care Pvt. Ltd. vs. Union of India [1997 (89) E.L.T. 425 (S.C.)] and submits that the exemption was granted by the Government with the sole object that 40% of all outdoor patients of low income group should be able to receive free treatment from the hospitals claiming the exemption and, therefore, such hospitals must endeavour to achieve that objective at any cost. The appellant further points out that the very authority (Director General of Health Services) which had granted Customs Duty Exemption Certificates (CDECs) later on came to know that the respondents hospital had not been able to discharge their obligations under the notification. The appellant finally says that the respondents hospital has not fulfilled their continuing obligation under Notification No. 64/88-Cus.
4. In his endeavour to support grounds of this appeal, the learned Addl. Commissioner (AR) submits that, though the learned Commissioner of Customs found inadequacy of evidence of fulfilment of the relevant conditions by the hospital, he chose to hold in their favour on the premise that they had made all possible efforts to comply with those conditions. According to the learned Addl. Commissioner (AR), such a view was taken without sufficient evidentiary support and hence the conclusion reached by the adjudicating authority is untenable on facts and in law. In this connection, it is further submitted that the reasons stated by the learned Commissioner for granting exemption to the hospital is not in keeping with the relevant judgements of the Honble Supreme Court and High Courts dealing with the scope of applicability of the notification. In this connection, reliance is placed on the Honble Supreme Courts judgement in Mediwell case (supra) and the Bombay High Courts judgement in Shah Diagnostic Institute Pvt. Ltd. vs. Union of India [2008 (222) E.L.T. 12 (Bom.)]. In the latter judgement, it was held by the Honble High Court that, by virtue of Section 159A of the Customs Act, the continuing obligation of hospitals which had imported medical equipments by availing the benefit of the above notification continued to operate beyond the date of rescission of the notification (1.4.94). Finally, it is prayed that both the appeals be allowed.
5. The learned counsel for the respondent, per contra, submits that there is no forceful challenge to the findings recorded by the learned Commissioner and, therefore, at this stage, the prayer of the appellant is not liable to be granted. The learned counsel has produced a compilation of certificates issued by the State Health and other authorities from April 1993 to November 1999. He has also relied on certain decisions such as Apollo Hospitals Enterprises Ltd. vs. Union of India [2001 (133) E.L.T. 58 (Mad.)], Durabhai Deshmukh Hospital vs. CC, Hyderabad [2011-TIOL-333-CESTAT-BANG], etc.
6. After giving careful consideration to the submissions, we are not impressed with the grounds raised in these appeals. Apart from reiterating the conditions of the notification and dealing with certain select judgments of the apex court, the appellant has not put forth any objection vis-`-vis the categorical findings of facts recorded in the impugned orders. The learned Commissioner in the impugned orders clearly found that the hospital produced evidence of having complied with the conditions of the exemption notification. He categorically observed that the records submitted by the hospital bore testimony to the fact that they had planned and endeavoured to provide the prescribed outdoor and indoor treatment to those who had approached them. The learned Commissioner also took into account the free treatment given by the hospital to outdoor patients at free medical camps. None of these findings has been questioned, let alone with material support, by the appellant. It appears from the impugned orders that whatever records provided by the hospital were examined and the statements given by the hospital authorities were also considered and the evidentiary value of all these materials was duly assessed by the learned Commissioner. We would have appreciated, if the appellant had questioned the basis of such findings in these appeals. No such challenge is forthcoming. In the result, both the appeals get dismissed.
(Pronounced and dictated in open court)
(M. Veeraiyan) (P.G. Chacko) Member (Technical) Member (Judicial)
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