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Showing contexts for: CDEC in Bharath Diagnostic Centre vs C.C., Air Cargo (I And G) on 17 November, 2006Matching Fragments
1. This appeal has been filed against the OIO No. 11/ADJ/RSS/2004 dated 22-6-2004 passed by the Commissioner of Customs AIR Cargo (Import & General), New Delhi.
2. The appellants imported certain medical equipments by availing the benefit of Notification No. 64/88-Cus., dated 1-3-1988. The benefit under the above said Notification was availed on the strength of the Customs Duty Exemption Certificate (CDEC) issued by the Director General, Health Services (DGHS). The DGHS, in his letter dated 12-12-1997 cancelled the above said CDEC issued to the appellants based on the Supreme Court's decision in "Mediwell Hospital and Health Care Pvt. Ltd. v. UOI and Ors. ". Consequent to the cancellation of the CDEC, the Revenue initiated action against the appellants by way of Show Cause Notice. The Adjudicating Authority, in his order dated 22-6-2004, confirmed a demand of duty of Rs. 30,57,789/-. Further, a redemption fine of Rs. 30,000/- and a penalty of Rs. 10,000/- were also imposed. The appellants appealed to this Tribunal. During the hearing, the learned Advocate made the point that Notification 64/1988-Cus dated 1-3-1988 was rescinded vide Notification No. 99/1994-Cus dated 1-3-1994. However, the CDEC Certificate was cancelled long after the repeal of the Notification, citing various case-laws particularly the decision of the Hon'ble High Court of Madras in the case of Apollo Hospitals Enterprises Ltd. v. UOI . It was urged that the effect of the repeal of the Notification is that after the repeal, the Notification ceased to exist and the right accrued under the Notification is unaffected by the repeal by virtue of Section 6(b) of the General Clauses Act. It was also urged that the Hon'ble Apex Court has not examined the effect of repeal of Notification 64/88 in the Mediwell case and as this is an important question, the same has to be decided by a larger bench. While acceding to the prayer of the appellants, this Bench, in the Misc. Order made the following observations -
Accordingly, a Larger Bench was constituted to decide the matter. The hearing before the Larger Bench was held on 18-9-2006.
3. S/Shri B.V. Kumar and B. Venugopal, the learned Advocates, appeared for the appellants and Shri K. Sambi Reddy, the learned JDR, for the Revenue.
4. The short point made by the learned Advocates, is that the liabilities, if any, under Notification No. 64/88-Cus., dated 1-3-1998, could be enforced only on or before the repeal of the said Notification by Notification No. 99/94-Cus dated 1-3-1994. In the present case, the import was effected on 9-1-1992. While importing the goods under the benefit of Notification No. 64/88, the appellants undertook to comply with the conditions prescribed therein. The CDEC Certificate was issued by DGHS on the execution of an undertaking by the appellant to the effect that the goods shall not be sold disposed or dealt without prior permission. The above CDEC certificate was issued on 3-4-1992. Afterwards, the appellants sold the goods to M/s Wipro GE Medical Systems (WGMS in short) and later, WGMS sold the goods to M/s. Mandakini CT Centre, Bombay. On 12-12-1997 the CDEC was cancelled by the DGHS as the appellant unit is a Diagnostic Centre not having in-patient facility. The contention of the Advocates is that the Notification was rescinded on 1-3-1994. Therefore, no action could be taken against the appellant after 1-3-1994. In other words, the learned Advocates question even the cancellation of the Certificate after 1-3-1994 for the reason that Norn. No. 64/88 ceases to exist w.e.f. 1-3-1994 and the rights accrued by the appellant cannot be taken away by the repeal of the Notification.
6. We have gone through the records of the case carefully. The appellants imported the medical equipments under Notification No. 64/88-Cus dated 1-3-1988. The Notification imposes various conditions. In the present case, the date of import is 9-1-1992. After various investigations, it was revealed that the appellants had wrongly availed the exemption under the said Notification. In fact, the CDEC was cancelled only on 12-12-1997. The point made by the appellants is that no action can be taken against them after the rescission of the Notification 64/88 on 1-3-1994. The learned Advocates laid great emphasis on the rights acquired by the appellants by virtue of the CDEC Certificate issued to them and if at all any action had to be taken with regard to the liabilities, it should be before 1-3-1994 and not after. The appellants mainly relied on the decision of the Hon'ble Madras High Court in the case of Apollo Hospitals Enterprises P. Ltd. (cited supra). A very careful reading of the Apollo Hospitals decision does not lead us to the conclusion that favoured the appellants. We are reproducing paras 42 and 43 of the Apollo Hospitals decision.
6.3 Coming to the specific facts of this case, it is very clear that even from the beginning, the appellant failed to fulfill the post import conditions of the Notification such as providing free treatment to 40% of the OPD patients treated every year, free treatment to all the indoor patient belonging to the salary group of less than Rs. 500/- p.m. and reserving 10% of their beds for such category of persons. The benefit was availed by them on the basis of the CDEC certificate dated 3-4-1992 issued by DGHS. The appellant, instead of using the equipment in the Centre, sold the equipments to M/s. WGMS. This is a blatant violation of the Notification. Such a violation of the Notification came to the notice of the authorities later leading to the cancellation of the CDEC Certificate. To argue that CDEC Certificate could not have been cancelled after the rescission of the Notification would amount to legitimizing the illegal acts of the appellant. There is no disagreement on the point that the appellant is duty bound to fulfill the conditions of the Notification at least during its life period. If it is found even after the rescission of the Notification that the appellant had blatantly violated the conditions of the Notification and was not at all entitled for the benefit of the notification even from the beginning, definitely action can be taken against the appellant. If it is held that after the rescission of the Notification no action can be taken, it would be a travesty of justice and all wrong doers would go scot-free. In these circumstances, the order of the Original Authority confiscating the medical equipments and demanding duty is correct and legal. Considering the value of the goods, the amount of Redemption Fine and penalty imposed on the appellant are very nominal. Hence, we uphold the Order-in-Original and dismiss the appeal.