HISSAR MEDICAL DIAGNOSTIC AND Vs. CC

JUDGEMENT

(1.) M /s Hissar Medical Diagnostic and 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 and 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.

(2.) TO check the fulfillment of other conditions prescribed under Notification No. 64/88 -Cus dated 01.03.1988, the office of the Accountant General (Audit), Haryana conducted an audit of this Hospital on 04.10.1996 and submitted their findings. On the basis of their findings, it was alleged that -

(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.