INDIAN MRI DIAGNOSTIC AND Vs. COMMR. OF CUS.

JUDGEMENT

(1.) THE appellant had imported a whole body C.T. Scanner in the year 1990 -91, which was released provisionally without payment of duty under Notification No. 64/88 -Cus., dated 1 -3 -88 on execution of a bond which was, later on, cancelled on production of Customs Duty Exemption Certificate issued by the Director General of Health Services (DGHS). The exemption certificate was, later on, withdrawn by the DGHS, on finding that the appellants' institution was not a hospital but only a diagnostic centre, which was not eligible for the benefit of the Notification. A show cause notice was issued on 6 -3 -98 by the Asstt. Commissioner of Customs proposing confiscation and penalty on the ground of violation of post -importation conditions of the notification. In adjudication of this notice, the Commissioner of Customs, imposed a redemption fine of Rs. 23,61,039/ - in lieu of confiscation of the goods but did not impose any penalty. The present appeal is against the redemption fine.

(2.) WE have heard both the sides. Ld. Counsel reiterates the grounds of the appeal. Ld. DR submits that the issue involved in this case stands covered against the appellants by judicial pronouncements. The following decisions have been relied on by the DR : -

(3.) WE have examined the submissions and case law. It was found by the adjudicating authority that the appellants' institution was not a hospital but only a diagnostic centre as it was not, in any way, equipped to handle inpatients or outpatients. The claim of the assessee that, during 1991 -92, they had rendered free medical check -up to 45% of the cases referred to them by various hospitals was considered by the Commissioner, who found that the percentage of free medical check -up had come down drastically to 5% during 1996 -97. It was further found by the Commissioner that a hospital which was run by the appellants at a distance of 13 Kms. from the diagnostic centre was laying closed since August, 1997. These facts found by the Commissioner have not been rebutted in the present appeal. Further, it appears to us, the crucial finding recorded by the adjudicating authority is that the appellants' institution was only a diagnostic centre and not a hospital. The Andhra Pradesh High Court's judgment referred to above is relevant in this context. The High Court held that a diagnostic centre was not a hospital for purposes of Notification No. 64/88 -Cus. The facts of the instant case are similar to those of Kailash Diagnostic and Rehabilitation Centre, Following the High Court's ruling, we have to hold that the appellant's institution was not a 'hospital' within the meaning of the notification and, therefore, they were ab initio ineligible for the benefit of exemption under the notification. Even assuming to the contrary, we note that the Duty Exemption Certificate issued by the DGHS was withdrawn by the licensing authority and, consequently, the appellants ceased to be eligible for the exemption from payment of customs duty. A plea of limitation also appears to have been raised in this appeal, which does not seem to be of any relevance inasmuch as, under the impugned order, there is no demand of duty. The imported equipment was rightly confiscated by the lower authority on the ground of violation of the conditions of the notification. The quantum of redemption fine cannot be said to be unreasonable as it has not been challenged at the bar. In the result, the appeal fails and the same is dismissed.