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1. M/s Hissar Medical Diagnostic & Hospitals Limited filed Bill of Entry No. 105274 dated 06.11.1992 for import of one Toshiba make TCT 300S Whole Body CT Scanning machine. It was cleared on 12.11.1992 without payment of duty on the strength of customs duty exemption certificate issued by the Directorate General of Health Services under Notification No. 64/88-Cus dated 01.03.1988. Show cause notice dated 24.5.1997 was issued to M/s Hissar Medical Diagnostic & Hospitals Limited that they were required to submit the installation certificate from Directorate General of Health Services within a reasonable period and no such certificate was produced by them demanding duty of Rs. 79,11,176/-. This show cause notice is still said to pending for decision.

3. On behalf of the appellants it was argued that the Commissioner has decided the issue on the basis of the letter of Directorate General of Health Services dated 12.12.1997 withdrawing the custom duty exemption certificate. There was no reference of this letter in the show cause notice which was issued earlier to this letter, therefore, the Commissioner should not have relied on this letter of Directorate General of Health Services. The Custom duty exemption certificate issued to them by DGHS was valid at the time of importation of the CT Scanner. Therefore, they have validly imported it under exemption at the time of clearance of the goods from the customs. The show cause notice was not amended by the Commissioner after issue of the letter dated 12.12.1997 by Directorate General of Health Services canceling the customs exemption certificate which should have been done by them if this letter was required to be relied upon. However, on this the Commissioner has not given any finding in his order and he simply relied on the letter dated 12.12.1997 issued by the Directorate General of Health Services. The Commissioner has also given finding that the percentage of outdoor patient to whom free treatment was given was far below the minimum percentage of 40% as prescribed in notification No. 64/88-Cus and the indoor facility was started by the noticee after a lapse of two years from the date of import of scanner. It was argued that they had in reply to the show cause notice in para 3.3 had given information to Civil Surgeon, Haryana Government, vide their letter dated 30.01.1993 in which it was clarified that the scanner has been installed in the hospital and started functioning w.e.f. 28.11.1992. It was also argued that they have met the criteria of tree treatment to more than 40% of the outdoor patients and more than 10% of the indoor patients. This information was supplied by the Civil Surgeon, Hissar to Director General of Health Services, Haryana under letter No. GI/94/2477 dated 12.07.1994 (page 125 of the paper book). They had submitted necessary evidences in the form of this letter and also the free camp held by them, through newspaper, advertisements and the list of patients before the adjudicating authority. It was also argued that they were admitting the patients in the hospital as is apparent from the hand bill placed on page 128 of paper book Annexure XXIII to the appeal petition. In the hand bill it is mentioned that on 21.02.1993 there will be a free camp and there is facility of admission in CT scan and neurology center. Necessary evidences in the form of photographs of free beds were also produced before the adjudicating authority. Affidavit was also filed by the Managing Director of M/s Hissar Medical Diagnostic and Hospitals Limited wherein, it was stated that a committee comprising of Doctors from Civil Hospital Hissar visited the hospital and the committee conducted a thorough inspection of the hospital-including its infrastructure, equipments and records showing details of indoor and outdoor patients treated by the hospital on payment of charges as well as free and after verification of the data Civil Surgeon, Hissar in letter No. GI/93 dated 1.7.1993 sent a report to Director General Health Services, Haryana indicating clearly that the data of patients furnished by the hospital is verified. The appellant also furnished to the Superintendent, Central Excise, Hissar a complete data of patients treated by the hospital during the year 1992-93 to 1996-97 and all the records containing the said data details were produced to him and on verification he did not find any discrepancy in the data. Thus, it was argued that they have fulfilled post importation conditions of notification No. 64/88-Cus.

(g) Commissioner of Central Excise, Coimbatore v. Elgi Equipments Ltd. 2001 (128) ELT 52 (SC) - to the effect that Section 11AC of Central Excise Act, 1944 is prospective in operation. Illegality committed prior to insertion of said section in the Act cannot be the subject matter of penalty under the said provision for the past period.

4. On behalf of the Revenue, it was argued that the order of the Commissioner is based on the fact and he has correctly decided the issue. The custom duty exemption certificate which was issued to the appellant was cancelled by the Director General of Health Services under his letter dated 12.12.1997. It was argued that in the said letter it is clearly mentioned that the appellants were given 15 days time by letter dated 09.07.1997 to send the data/information to State Government with copy to the D.G. Health Services, New Delhi for verification and sending their recommendation but no reply/recommendation was received from the State Government in their case for fulfillment of the conditions laid-down under notification No. 64/88. M/s Hissar Medical Diagnostic & Hospitals Ltd., is only a diagnostic center not having indoor treatment facilities and therefore it is not fulfilling the conditions for availing and retaining customs duty exemption certificate issued to it accordingly the certificate was withdrawn/cancelled. It was argued that this withdrawal/cancellation is in respect of the whole body CT Scanner model TCT 300 S Toshiba, Even though this withdrawal has been done at a subsequent date but it is in respect of only that certificate which was issued to them on 04.09.1997. Therefore, after withdrawal of this certificate dated 04.09.1992 and its cancellation the appellants were not entitled for duty free import of the CT Scanner in dispute. Therefore, the Commissioner has correctly relied on this letter dated 12.12.1997 of Director General of Health Scheme withdrawing/canceling the custom duty exemption certificate and he was not required to look into the other conditions of Notification No. 64/88-Cus dated 01.03.1988 as the appellant has no custom duty exemption certificate with them and accordingly they were not entitled for the exemption granted under Notification No. 64/88-Cus. It was also argued that the appellants have not fulfilled the other conditions of the Notification. The CT Scan center building have no facility for indoor patients. As per report of the team of Doctors (page 60) of paper book, it is clear that the indoor patients ward was only in hospital wing. Reliance was placed on the following decisions:

4.4. Finally it was argued that it is a fact that the Commissioner has not taken into consideration the various documents regarding treatment given to the indoor patients and outdoor patients as he has decided the case only one ground that the custom duty exemption certificate was withdrawn and cancelled by the Director General Health Services. Therefore, he had not considered the other grounds. On the appellants plea that the figure of indoor and outdoor patients and those who availed facility of CT Scanner are duplicated to some extent, it was argued that all these documents regarding free treatment given to outdoor patients and indoor patients as has been furnished by the appellant to Director General Health Services through Civil Surgeon, Hissar and submitted to the department in their appeal petition and also before the Commissioner. Now these figures cannot be changed as has been claimed by the appellant. This plea cannot be taken at this stage as the appellants right from 1992 till today have not taken this plea either in writing or oral before the various authorities including audit party wherever the figures were given by them.