Custom, Excise & Service Tax Tribunal
Research Centre vs Acc, Mumbai on 4 September, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/448/2002
[Arising out of Order-in-Original No: SIIB/GEN-93/99 ACC // S/10-19/2001 SIIB // CC-3/2002 ADJN ACC dated 30/01/2002 passed by the Commissioner of Customs, ACC, Mumbai.]
For approval and signature:
Honble Shri P.R. Chandrasekharan, Member (Technical)
Honble Shri Ramesh Nair, Member (Judicial)
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 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
Sunitidevi Singhania Hospital & Medical
Research Centre
Appellant
Vs
Commissioner of Customs
ACC, Mumbai
Respondent
Appearance:
Shri M. Dwivedi, Advocate for the appellant Shri A.K. Singh, Addl. Commissioner (AR) for the respondent CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Ramesh Nair, Member (Judicial) Date of hearing: 04/09/2014 Date of decision: 17/09/2014 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
The appeal is directed against Order-in-Original No: SIIB/GEN-93/99 ACC S/10-19/2001 SIIB CC-3/2002 ADJN ACC dated 30/01/2002 passed by the Commissioner of Customs, Air Cargo Complex, Mumbai
2. Vide the impugned order, the adjudicating authority has confirmed a customs duty demand of ` 95,92,213/- on the appellant, M/s. Sunitidevi Singhania Hospital & Medical Research Centre, Thane. He has also ordered confiscation of the goods valued at ` 1,07,71,002/- seized under panchanama dated 09/10/2000 (which was released to the appellant for safe custody) subject to payment of a redemption fine of ` 1 lakh. He has also imposed a penalty of ` 25,000/- on the appellant. Aggrieved of the same the appellant is before us.
3. The facts relevant to the case are as follows:
3.1. The appellant imported between March and August 1991 certain medical equipment claiming the benefit of Notification 64/88-Cus dated 01/03/1988 on the strength of a Customs Duty Exemption Certificate (CDEC) No. Z.37024 issued by the Director General of Health Services. The CDEC was issued subject to the condition that (i) the appellant undertakes to give free treatment, on an average, to at least 40% of the outdoor patients; (ii) to give free treatment to all indoor patients belonging to families with an income less than ` 500/- per month, and to keep for this purpose, at least 10% of all the hospital beds reserved for such patients and to give free treatment at charges either on the basis of income of the patients concerned or otherwise to patients other than those specified above.
3.2. Investigation conducted by the department revealed that the appellant had failed to fulfill the above post importation conditions and, therefore, a detailed enquiry was made and statements of Dr. Y.C. Mahajan, Hospital Administrator was recorded. Dr. Mahajan submitted that the hospital conducted free OPDs outside the premises of the hospital in the form of medical camps but he was not able to quantify the attendance as a percentage of total OPD attendance in respect of such medical camps. Regarding reservation of 10% of the beds to inpatients having income less than ` 500/- per month, Dr. Mahajan submitted that occupancy of the hospital never exceeded 75% on any day and hence 10% of the beds were available to cater to the requirement in this regard. Thereafter, the records of IPD and OPD for the years 1997, 1998 and 1999 which were made available to the Investigating officers were examined and it was found that free treatment given to the OPD patients accounted for 2.2%, 5.57% and 2.64% for the years 1997, 1998 and 1999 respectively. Similarly, the free IPD treatment was found to be 1.2%, 0.36% and 0.81% for the above mentioned years. Thus it was found that the appellant had not fulfilled the terms and conditions of the Notification 64/88-Cus. It was also noticed that DGHS, who issued the CDEC certificate for availment of benefit under Notification 64/88 had lateron cancelled the same vide letter No. F Z-37024/3/92-MG.
3.3. Accordingly, a show cause notice dated 04/04/2001 was issued to the appellant proposing confiscation of the medical equipment valued at ` 1,06,71,002/- under Section 111(o) of the Customs Act, 1962; to demand duty of ` 1,32,75,742.63 along with interest on the medical equipment imported; to impose penalty under Section 114A and 112(a) of the Customs Act, 1962. The notice was adjudicated upon vide the impugned order and the duty demands were confirmed after granting benefit under Notification 65/88-Cus. It is this order which is in appeal before us.
4. The learned counsel for the appellant made the following submissions:
4.1. The appellant had submitted a letter dated 16/02/2000 wherein it had submitted details of OPD patients treated free of charge over a period of three years from 1997 to 1999 which shows that 40% of the OPD patients were treated free of charge. Since the records of the previous period are not available with the hospital, it is their contention that they have fulfilled the condition of free treatment as far as OPD patients are concerned. It is also argued that patients attended in outdoor medical camps should also be included under the category of OPD patients and reliance is placed on the decision of the honble Madras High Court in the case of Apollo Hospital 2001 (133) ELT 58 (Mad.). As regards the condition of keeping 10% of the beds reserved for inpatients whose income is below ` 500/- per month, it is submitted that all such patients have been admitted and given the beds and treated free and there is no complaint or resentment by any patient in this regard. It is also submitted that occupancy of the beds in the hospital never exceeded more than 75% of the beds available and, therefore, beds were always available for treatment to inpatients within the limit of 10% as stipulated in the Notification. It is argued that the conditions which are difficult to comply with cannot be imposed for availment of benefit under the Notification. It is also argued that the interest is not applicable under Section 18(3) and 28AB of the Customs Act, 1962. It is pleaded that the provisions of Notification 64/88-Cus were vague and at times difficult to comprehend and observe and the said Notification did not prescribe any format in which the records of the patients were to be maintained. It is also argued that Notification 64/88 has been rescinded by Notification 99/94 dated 01/03/1994 and the impugned notice demanding duty has been issued almost six years after the rescinding of the Notification. It is also pleaded that the appellant was doing philanthropic work and the appellant-hospital was situated in a remote village and is run by Charitable Trust with the sole objective of serving the poor and the needy villagers. Taking these facts into account, it is submitted that the impugned order be set aside and the appeal allowed.
4.2. The learned Additional Commissioner (AR) appearing for the Revenue relies on the decision of the Tribunal in the case of Central India Institute of Medical Science vs. Commissioner of Customs (ACC), Mumbai 2008 (231) ELT 113. The said decision also considered the issue whether treatment provided in medical camps can be taken into account while calculating the limit of 40% of OPD patients and it was held that treatments given to persons attending medical camps cannot be recognized as treatment to outpatients as held by the honble High Court of Kerala in the case of Maulana Hospital vs. Union of India 2007 (207) ELT 189 (Ker.) and Medical Relief Society of South Kanara vs. Union of India 1999 (111) 327 (Kar.) decided by the honble High Court of Karnataka. The learned AR further submits that since Notification 64/88 imposes a continuing obligation on the appellant to provide free treatment to OPD patients and IPD patients up to the limit specified in the Notification, question of any time-limit would not arise as held by the honble apex Court in the case of Mediwell Hospital and Health Care Pvt. Ltd. 1997 (89) ELT 425 (SC). Therefore, the question of time-bar for demand of duty for violation of post-importation conditions would not arise. The learned AR also relies on the decision of this Tribunal in the case of Dr. Babasaheb Ambedkar Vaidyakiya Pratishthan vs. Commissioner of Customs vide order No. A/581/14/CSTB/CI dated 27/03/2014 wherein an identical issue came up for consideration and it was held that benefit of Notification 64/88-Cus would not be available if post-importation conditions were not fulfilled. Accordingly, he prays for upholding the impugned order.
5. We have carefully considered the submissions made by both the sides. It is an admitted fact that as per the records produced by the appellant before the investigating authority, the total number of OPD patients given free treatment amounted to 2.2% , 5.57% and 2.64% for the years 1997, 1998 and 199 respectively. Similarly, the number of inpatients given free treatment having income below ` 500/- were 1.2%, 0.36% and 0.81% for the above mentioned years. This position has been admitted by Dr. Y.C. Mahajan, Hospital Administrator in his confessional statement recorded on 13/12/1999. Therefore, it is clear that the appellant has not fulfilled the post-importation conditions of giving free treatment to 40% of the OPD patients and 10% of the IPD patients.
5.1. As regards the reliance placed on a letter dated 16/02/2000 wherein the appellant has claimed to have furnished details of the OPD patients treated freely, we have perused an unsigned copy of the said letter. The said letter also gives certain details of the patient categories who have been given free treatment. However, there is no mention in the said letter as to from where this data have been obtained and what is the basis for these data and therefore, this claim of the appellant is only a mere averment without any basis or supporting evidence. Whereas, as per the records maintained by the appellant in the hospital, which was produced before the investigating authority, it was found that the appellant have not fulfilled the terms and conditions of the Notification 64/88-Cus. It is a settled position in law as held by the honble apex Court in the case of Mysore Metal Industries [1988 (36) ELT 369 (SC)] that it is for the person who is claiming the benefit of exemption Notification to lead evidence to show that he is entitled for the exemption. We find that the appellant has completely failed in this regard and the evidence available on records are contrary to the claim of the appellant.
5.2. As regards the contention that the demand is made belatedly, this contention is also not sustainable as Notification 64/88 imposes a continuing obligation on the importer with regard to provisions of free medical treatment, as held by the honble apex Court in the case of Jagdish Cancer & Research Centre [2001 (132) ELT 257 (SC)], the question of time-bar will not arise. In the present case, the imported goods were confiscated under Section 111(o) of the Customs Act, 1962 and allowed to be redeemed. The order for payment of duty under Section 125(2) would be an integral part of the proceedings relating to confiscation and consequential orders thereon, on the ground that the importer had violated the conditions of notification subject to which the exemption on goods was granted.
5.3. As regards the contention of the appellant that the patients treated in medical camps should be considered as OPD patients, this contention has been rejected by this Tribunal in the Central India Institute of Medical Science case (supra), relying on the decision of the honble Kerala High Court and of the Karnataka High Court and, therefore, we do not find any merit in the contention raised by the appellant in this regard.
5.4. We have also noted that while confirming the duty demand, the adjudicating authority has very fairly considered applicability of Notification 65/88-Cus and extended the benefit of the same. We also note that the redemption fine and penalties imposed on the appellant are very reasonable.
6. In this factual and legal scenario, we do not find any merit in the appeal and accordingly, the same is rejected.
(Pronounced in Court on 17/09/2014) (Ramesh Nair) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as 2