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2005 (10) TMI 112 - AT - CustomsDemand - Confiscation of medical equipments, spares and accessories - wilful misstatements for obtaining customs duty exemption certificates - Non-fulfilment of the conditions of the Notification No. 64/88 - Exemption/Recovery - Redemption fine - HELD THAT:- We note that the impugned notification has not provided for obtaining any bond or bank guarantee for recovery of duty in the event of failure to fulfil the conditions of free treatment. However, it is the prerogative of the Government to grant exemption, as has been held in Sri Sathya Sai Inst.[2003 (9) TMI 94 - SUPREME COURT], and it is for the Government to incorporate appropriate provisions. Merely because some other exemption notifications incorporate provisions regarding bond etc. by way of extra precaution and this one does not (as the Government may have valid reasons not to burden hospitals doing genuine charitable work with bonds and bank guarantees), this cannot be a valid plea by the appellants not to pay the demanded duty when the conditions of free treatment are violated. We also do not think that it is necessary for an exemption notification issued u/s 25 to contain a recovery provision when the power to recover duty can be traced to Section 12, nor any mandate to provide such a recovery provision in an exemption notification is contained in the said Section 25. Thus, we are of the view that the duty in respect the impugned goods imported by the appellants during 1988-94 and used by them in violation of the conditions of the impugned notification is payable irrespective of whether they redeem the same or not independently of Section 125(2) as the duty is recoverable u/s 12 and the impugned notification as well as in terms of the Apex Court decision in Paragraph 12 of Mediwell [1996 (12) TMI 51 - SUPREME COURT]. We also find no merit in the argument of the ld. Senior Counsel that the adjudicating Commissioner could have imposed penalty equal to duty, but he has chosen to only impose a nominal penalty. We are of the view that the equal duty provision u/s 112 only provides a measure for the maximum penalty that can be imposed and it is not a provision for recovery of duty. We, however, do not agree with the observation in Lady Amphthil (supra) that the period of limitation in such cases will commence from the date of issue of notice. Since the time limit prescribed u/s 28 has been held to be not applicable to such cases, and since there is no other specific time-limit prescribed under the customs law to cover such cases, we are of the view that the notice of demand will not be subject to any limitation of time in such cases of non-fulfilment of post-importation conditions casting a continuing obligation as noted by us. Accordingly, we answer the reference as follows :- i) When a post-importation condition in an exemption notification is not fulfilled, the Department has the power to recover the escaped duty in terms of Section 12 of the Customs Act, 1962. Apex Court decision in Mediwell [1996 (12) TMI 51 - SUPREME COURT] also provides an authority for such recovery. (ii) Such demand notices will not be subject to any limitation of time. The case is returned to the Division Bench for deciding the Appeal on merit.
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