PUBLIC HEALTH CARE Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THIS appeal is against the order passed by the Commissioner (Appeals) upholding the original authority's order confirming a demand of duty to the extent of Rs. 2,82,360/ - on certain medical equipment imported and cleared under Bill of Entry dated 5 -7 -89 without payment of duty in terms of Notification No. 64/88 -Cus., confiscating the said goods with redemption fine of Rs. 3 lakhs and also sustaining the penalty imposed on the party by the lower authority to the extent of Rs. 10,000/ -.

(2.) WE have carefully considered the submissions made by both the sides. This case has a chequered history. The present proceedings originated from a show cause notice issued on 20 -1 -98 by the Department proposing demand of duty, confiscation and penalty on the ground that the post -importation conditions of Notification No. 64/88 -Cus. were not fulfilled by the importer. The original authority adjudicated the show cause notice on 29 -3 -99, confiscating the goods under Section 125 of the Customs Act with option to redeem the goods on payment of fine of Rs. 2,30,000/ -. It, however, did not impose any penalty; and found that no demand of duty was enforceable against the importer. The department preferred an appeal against the decision of the original authority, to the Commissioner (Appeals), aggrieved by the non -imposition of penalty as also by the alleged insufficiency of the redemption fine. The appellate authority found that all the relevant facts were not considered by the original authority, and hence remanded the matter. In the remanded proceedings, the original authority passed an order on 27 -1 -2001, in which the authority confirmed the demand of duty, imposed a redemption fine of Rs. 3 lakhs and a penalty of Rs. 30,000/ -. Aggrieved by that order, the importer, again, approached the Commissioner (Appeals) and the latter passed an order on 21 -12 -2001 confirming the demand of duty and redemption fine but reducing penalty to Rs. 10,000/ -. The present appeal is against the said order of the Commissioner (Appeals).

(3.) LD . Consultant submits that no question relating to demand of duty had arisen at all before the original authority in the remanded proceedings and, therefore, the order of that authority and the impugned order of the Commissioner (Appeals) insofar as they concern duty cannot be sustained. We find that the submission, which is not seriously opposed, is acceptable. The remand order passed by the Commissioner (Appeals) did not provide any scope for the original authority to examine the duty demand aspect of the show cause notice inasmuch as the demand of duty had already been held to be time -barred which decision of the original authority was not at all appealed against by the Department. What survived for consideration by the original authority in the remanded proceedings was only the questions relating to fine and penalty, but that authority raked up the duty demand and confirmed the same against the importer. This order passed by the original authority has been upheld by the Commissioner (Appeals). We are convinced that the demand of duty confirmed under Section 28 of the Customs Act does not survive in this case. In this context, we note that, in the impugned order, the Commissioner (Appeals) has made certain observations with reference to Section 125 of the Customs Act, Though it was beyond the scope of the proceedings before the Commissioner (Appeals) to make any such observations in his order with regard to the demand of duty, we find that those observations are nevertheless keeping with the Apex Court's judgment rendered in the case of Mediwell Hospital [1997 (89) E.L.T. 425 (S.C.)]. The Apex Court has held that, in a proceedings under Section 125 of the Customs Act, it would also be open to the Department to demand customs duty under Sub -section (2) of Section 125, without recourse to Section 28 of the Act. This legal position, settled by the Supreme Court will be relevant to any proceedings that might be taken by the Department to recover the duty of customs on the subject goods. In this context, however, it is asserted by the Consultant for the appellants that they do not propose to redeem the goods and hence there would be no occasion for payment duty thereon.