Custom, Excise & Service Tax Tribunal
Arogya Scan & Research Centre (P) Ltd vs Commissioner Of Customs on 8 September, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.C/1/2004
[Arising out of Order-in-Original No.1141/2003 dated 15.10.2003 passed by the Commissioner of Customs, Chennai]
For approval and signature:
Honble Ms. JYOTI BALASUNDARAM, Vice-President
Honble Dr. CHITTARANJAN SATAPATHY, Technical Member
1. Whether Press Reporters may be allowed to see 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 the Members wish to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Arogya Scan & Research Centre (P) Ltd.
Appellant/s
Versus
Commissioner of Customs,
Chennai
Respondent/s
Appearance :
Shri Hari Radhakrishnan, Advocate Shri C.Dhanasekaran, SDR For the Appellant/s For the Respondent/s CORAM:
Honble Ms. Jyoti Balasundaram, Vice-President Honble Dr. Chittaranjan Satapathy, Technical Member Date of hearing : 8.9.2010 Date of decision : 8.9.2010 Final Order No.____________ Per Jyoti Balasundaram The appellants herein imported Whole Body CT scanner with accessories and spares and sought clearance in terms of Notification No.64/88-Cus. dt. 1.3.88. The Customs Duty Exemption Certificate (CDEC) granted to the appellants was withdrawn vide the communication dt. 25.11.97. Show-cause notice dt.12.2.2001 was issued to the importers on the ground that the benefit of above notification was not available, proposing confiscation of the goods and imposition of penalty. The Commissioner of Customs confiscated the imported item under the provisions of Section 111 (o) of the Customs Act, 1962 with an option of redemption on payment of a fine of Rs.16 lakhs and discharge of duty liability, and imposed a penalty of Rs.4 lakhs under the provisions of Section 112 (a) ibid. Hence this appeal.
2. Ld. counsel for the appellants submits that the import is eligible for exemption as subsequent withdrawal or cancellation of the CDEC by the DGHS will not affect the eligibility to the benefit of the notification. In this connection, he relies upon the decision of the larger bench of the Tribunal in Lady Amphthil Nurses Instns. Vs Commissioner of Customs, Chennai [2002 (150) ELT 776]. His further submission is that even a diagnostic centre (the appellant is a diagnostic centre) falls under the definition of hospital as provided in the notification and, therefore, the finding of the Commissioner that the appellant is not a hospital, is contrary to the definition given in the notification. Reliance is placed on the decision of the Tribunal in Gujarat Imaging & Research Institute Vs CC Bombay [1996 (85) ELT 97] against which the department filed an appeal which was dismissed by the apex court as seen from 1998 (103) ELT A113 (SC). Another contention raised is that a diagnostic centre is only required to produce evidence of providing free diagnostic treatment at an average of 40% to poor patients and the appellants have established the above by production of a letter dt. 21.7.1994 of the District Medical Officer. The importers further submission is that they had entered into an agreement with M/s.Westfort Hospital, which is their sister concern, stipulating that Westfort Hospital shall reserve 10% of its total beds for giving free treatment to poor patients referred by the appellants. Ld. counsel lastly submits that confiscation and penalty are required to be set aside in the light of the decision of the Bench in Viswanadha Institute of Tech.of Management Vs CC ICD, Tughlakhabad, New Delhi [2008 (231) ELT 654], and in any event, the penalty requires to be reduced in the light of Tribunals decision on similar issue in Vinodhagan Memorial Hospital Vs CC Chennai [2007 (212) ELT 219].
3. Ld. DR reiterates the findings of the adjudicating authority and highlights the admitted position that the appellants do not have any inpatient department and inpatient facility is absolutely necessary for extending the benefit of the notification.
4. We have carefully considered the rival submissions. The issue stands decided against the appellants by the Tribunal in Vinodhagan Memorial Hospital cited supra holding that diagnostic clinic is not a hospital as it does not have any inpatient department and is, therefore, not eligible to the benefit of Notification No.64/88. Since the equipment imported was also not installed in the appellants premises but in the premises of Westfort Hospital, the benefit of the notification is not available to the appellants, as per the decision of the apex court in Commissioner of Customs (Import) Mumbai Vs Jagdish Cancer & Research Centre [2001 (132) ELT 257 (SC) holding that 10% of the total number of beds are supposed to be reserved for patients of the families having an income of less than Rs.500/- per month in the hospital where the equipment is installed and that the purpose of the notification for grant of exemption from payment of customs duty would not be served by making payment of expenditure incurred on some inpatients in some other hospital.
5. Following the ratio of the above decisions, we uphold the confiscation. The prayer for reduction in penalty also cannot be acceded to as the penalty imposed represents only 5% of the value of the goods (goods are valued at approx. Rs.80 lakhs). The impugned order is upheld and the appeal is dismissed.
(Operative part of the order was
pronounced in open court on 8.9.2010)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE-PRESIDENT
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