COASTAL DIAGNOSTIC SERVICES LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) EXAMINED the records and heard both the sides.

(2.) THE appellants had imported a Whole Body C.T. Scanner with accessories and cleared the same under Bill of Entry dated 30,10.89, free of duty in terms of Notification No. 64/88 -Cus dated 1.3.88, on the basis of Customs Duty Exemption Certificate (CDEC) issued by the Director General of Health Services. The DGHS, later on, cancelled the CDEC under intimation to the Customs authorities. The DGHS letter dated 31.10.2000 disclosed that the appellants had not fulfilled the free treatment conditions of the Notification. Elaborating the facts, the letter said that the minimum requirement of free treatment to 40% of outpatients had not been met by the appellants and also the condition of reserving 10% of the hospital beds for patients whose family income was less than Rs. 500 per month was not fulfilled. No proof of fulfilment of the post -importation conditions was furnished to the DGHS. Hence the CDEC was cancelled. On this basis, the Commissioner of Customs by show -cause notice dated 12.2.2001, proposed to:

(3.) WE have examined the submissions of both the sides. The issue involved in this case is whether the imported goods cleared without payment of duty in terms of Notification No. 64/88 -Cus is liable to be confiscated under Section 111(o) of the Customs Act on the ground of violation of post -importation conditions of the Notification. This issue is no longer res integra in view of the Tribunal's Larger Bench decision in the case of Lady Amphthil Nurses Institutions (supra), and so is the issue as to whether penalty is liable to be imposed on the importer under Section 112(a) of the Act. Both the issues stand settled against the importer -hospital. The only dispute before us is in relation to the demand of duty. It is true that the show -cause notice, which was issued far beyond the larger period of five years prescribed under Section 28, was issued under Section 124 of the Customs Act. Section 124 is an enabling provision, which enables the department to issue show -cause notice to an importer proposing to confiscate imported goods and to impose penalty on the importer when the goods are found to be liable to confiscation under the Act. While, in adjudication of such a notice, an order of confiscation of the goods is made under Section 111, a penalty is imposed under Section 112 of the Act. Where, in lieu of confiscation, an option is given to the importer to redeem the goods against payment of a fine, such fine is determined and imposed under Section 125. A demand of Customs duty is normally raised under Section 28 of the Act. In the subject show -cause notice, however, there is no mention of this provision of law. But it is pertinent to note that there is a specific proposal in the notice to recover interest on delayed payment of duty, under Section 28AA, which provision is relatable to Section 28 only. In this context, however, one has got to consider the Apex Court's rulings in the Mediwell Hospital case and in the case of Jagdish Cancer and Research Centre, 2001 (77) ECC 12 (SC) : 2001 (132) ELT 257 (SO which were considered by the Larger Bench of this Tribunal in the case of Lady Amphthil Nurses Institutions. The rulings are to the effect that, where a demand of Customs duty is raised against an importer in the context of confiscating the imported goods with option for redemption thereof on payment of a fine, such demand is under Sub -section (2) of Section 125 and not under Section 28(1) of the Act. The Apex Court's ruling is squarely applicable to the case on hand and, consequently, the demand of duty in this case is not hit by any limitation prescribed under Section 28. Hence the arguments advanced by the Consultant in relation to the demand of duty are not acceptable. In the result, we uphold the order of the Commissioner and reject the appeal.