TMI Blog1994 (3) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/90 dt. 14-3-1990 by M/s. High Tech Health Equipments Co., Hongkong. (vi) Packing list of M/s. High Tech Health Equipment Co., Hongkong relating to invoice No. NH-001/90 dt. 24-3-1990 indicating importer s reference number as SDL/HH/29/30. (vii) NMIC No. I/CC/5/88/397 dt. 25-5-1988 endorsed on application No. NMIC/1-88 dt. 15-4-1988 for CT-SE 600 Syner view Scanner and other items sought to be imported from M/s. Pickers International, USA against the order placed with them through M/s. U.B. Pickers Ltd., and to be consigned to Poona Hospital and Research Centre. (viii) DEC No. Z-37021/20/88-MG dt. 25-11-1988 by ADG/DGHS, New Delhi on the quotation No. UBP/BOM/761/88/Q dt. Nil of U.B. Pickers, Colaba, Bombay for Synerview C.T. Scanner to be consigned to Poona Hospital and Research Centre. (ix) Catalogue relating to Synerview series S.C.T. Scanner Model 600 SE of M/s. Picker International. The Importers had declared under Rule 10 of the Customs (Valuation) Rules, 1988 to the effect that the suppliers were M/s. High Tech Health Equipment Company, Hongkong and that they did not have any agent. They had not imported similar goods earlier and had furnished the contract No. as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of his statement taken by the Investigating Officers, that he had agreed to the suggestion that Shri A.P. Singh, Technical Person, had signed the examination report in concurrence to the fact that the machine imported was old one. It is further alleged that on inspection of DEC endorsement on quotation No. UBP/BOM/761/88 Q of M/s. U.B. Picker, application for NMIC/1-88 dt. 15-4-1988 and letter No. Z-37021/20/86-MG dt. 25-11-1988, submitted alongwith Bill of Entry, Shri Sarpotdar had stated : On scrutiny of these three documents, it is seen that the goods shown in the NMIC and DEC differs and also these certificates do not tally with the Bill of Entry with respect to the description . I am not aware as to why these certificates were attached to the subject Bill of Entry . It is also imputed to Shri Sarpotdar on the basis of his statement dt. 4-10-1990 the following facts : (1) They had diagnostic Centre at Poona under name and style Pune Diagnostic Centre" which is a unit of M/s. Surlux Diagnostics Ltd., Bombay which is situated inside the premises of Poona Hospital and Research Centre, 29, Sadhashiv Peth, Pune-30. (ii) Both these were separate legal entity a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to why the penal action should not be taken under Section 112 ibid. 7. The importer filed their reply dt. 2-5-1991 denying all the allegations made in the show cause notice. Inter alia, they submitted that the goods imported by them were not old but they were brand new ones, which had been imported as per the certificate issued by DGHS. They denied the allegation that they had admitted the goods to be old one. It is their contention that the examination report had been prepared with a preconceived general information that there was some mis-declaration. It is their contention that the report is vague, in as much it had stated appear to be old . It is stated by them that there is no evidence at all placed by the department in support of their allegation that the imported goods were old and used one. It is specifically stated by them that the price paid for the imported goods was the price of a new one, in as much they had paid about US $ 8,00,000.00. In this connection, they referred to the other importers, who had paid even less for a new machine and in this context, they referred to the department s evidence itself, which had been collected during the course of the investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the machine . In conclusion the ld. Collector has held that the machine in question was not a new machine and accordingly in view of the prohibition contained in clause 5(3)(iii) of the Imports (Control) Order, 1955, the import was unauthorised rendering the goods in question liable to confiscation under Section 111(d) of the Customs Act, 1962. In that view of the matter, the Collector has held that the charge of mis-declaration under Section 111(m) need be invoked but still it can be confiscated under Section 111(d) of the Customs Act, 1962. The ld. Collector has accepted the CIF value of the machine at Rs. 1,40,22,787/- and also to be a highly sophisticated machine and coming within the category of life saving equipment and in this regard has also held that it is not the case of anybody that such machines would be sold in the market for profit. Having regard to these facts and circumstances of the case this is a case where a lenient view in the quantum of fine would be merited. Having regard to this I give the importers an option to pay a fine of Rs. 14 lakhs only in lieu of confiscation... . The ld. Collector has accepted the description of the machine and held it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation has been taken from any person as regards the date of manufacture of this machine. He submitted that this number need not necessarily be date of manufacture and it could mean anything else like a part number. He submitted that the department had not investigated about the machinery from the Insurance Company or from the supplier or from any other source with regard to the age of the machine being old or new one. He submitted that the right course of action for the investigation authorities was to have called for information or clarification from the manufacturers and suppliers. Therefore, a mere physical examination and subjective opinion which is not emphatic or borne by any strong evidence and a vague report cannot be accepted against the importer. He pointed out to several statements of persons and demonstrated that contemporaneous import of similar machine had been valued at a lower price. He submitted that if this machine was an old one then the Department should not have accepted the CIF value of a new machine. In this context, he also relied on the ruling rendered in the following two cases : 1. B.K. Krishna, New Delhi v. Collector of Customs and Central Excise, Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r due compliance of the terms of the notification instead to infer a different intention then what is incorporated in the notification was without any jurisdiction. He also referred to question raised in the Parliament in this aspect and the answer given by the Govt., which clearly indicated the policy of the Govt. to allow diagnostic centre to import life saving equipment, even if they are merely attached to the hospital. He submitted that in the present case, the importer was a very much attached to the hospital with all the facilities provided by the hospital authorities. Therefore, the importer was placed in a better position than other importers who had no facility at all and who had been given clearance while importing similar machinery. In support of his arguments he relied on the following rulings : 1.Union of India v. Wood Papers Ltd., 1990 (47) E.L.T. 500 2.Rohit Pulp Paper Mills Ltd. v. Collector of Central Excise, 1990 (47) E.L.T. 491 (SC) 3.Tata Oil Mills Co. Ltd. v. Collector of C. Excise, 1989 (43) E.L.T. 183 (SC) 4.Collector of C. Excise v. Parle Export (P) Ltd., 1988 (38) E.L.T. 741 SC. 5.Indian Aluminium Co. Ltd. Another v. Union of India Another, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered the submissions made by both the sides and have gone through the records and the findings given by the ld. Collector. There are two issues involved in this case : (i) whether there is a mis-declaration and if so whether there is sufficient material on record to show that the machinery is an old and reconditioned one thus calling for imposition of penalty under Section 112(a) of the Customs Act, 1962, (ii) whether a certificate issued by the DGHS in favour of the importer is a sufficient compliance of the terms of the notification in question for granting the benefit. The only material on record in support of the first charge is the examination report. As can be seen from the said report, the appraiser has merely stated that the machinery appears to be old one . The ld. Collector has further added for his own that the machinery is old and reconditioned one . There is no evidence anywhere on record to show that the machinery was a reconditioned one and in that view of the matter, the findings given by the ld. Collector on this issue is certainly a far fetched one, drawn out of surmise and out of context. There is force in the appellant s contention that the report is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of the income of the patients guardians or other. 5. Certified that the Medical Surgical and Diagnostic equipments, apparatus and appliance to be imported by the institution will only be used in the institution and will not be removed here for private use and will not be sold or otherwise disposed off without prior permission of the Govt. 6.Certified that the institution has an appropriate programme for the establishment of the hospital. 7.Certified that there are sufficient funds and resources to establish the hospital. 8.Certified that the hospital will start functioning within a period of two years. 9.The certificate will be valid for two years from the date of issue. Sd/- Dy. Director of Health Services, Pune Circle, Pune-1". 16. Ld. Collector has accepted the genuinity of the certificate but he has a very strange doubt and that is he has held that the authorities have not fully applied their mind with regard to the intention of the notification and thus the certificate is not acceptable. Let us examine these aspects of the matter. The Notification 64/88-Cus., dt. 1-3-1988 reads here as under : * * * * * * *As the Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hospital equipment would be installed in the hospital and also give an undertaking of its functioning and in case if they fail to do so then they would find themselves to pay the duty leviable on the said hospital equipment. The explanation to the notification defines Hospital . This Explanation to the term Hospital clearly brings within its ambit any Institution, Centre, Trust, Society, Association, Laboratory, Clinic and Maternity Home which renders medical, surgical or diagnostic treatment . The Explanation to the notification being so very clear, it follows that the reading of the Clause 2 of the Notification cannot be done in such a way as to hold that a diagnostic treatment centre should be a hospital by itself and that both in-patient or out-patient facility should be available with the Importer. Such a reading as has been done by the ld. Collector, would make the notification otiose and also would place unnecessary burden on the importer, especially when the Importer has imported this life saving machinery for the purpose of rendering service to the needy patients and the Govt. of India has permitted hospitals and diagnostic centres to import life saving equipments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, Laboratory Clinic and Maternity Home, which renders medical, surgical or diagnostic treatment. It has been felt that the expression `any is an omnibus provision, and the term medical, surgical or diagnostic treatment means any one of or all three treatments. 3. Considering above, I realise that for diagnostic purpose no bed is required. Hence, the bed requirement cannot be essential for receiving the benefit of CDEC. Further, the diagnostic equipment which are very costly worth several crores of rupees cannot be afforded by the Government and such services are being provided by the private sector. These services do not require indoor facilities and are mostly located in private sector. This point may kindly be clarified, otherwise due to reasons stated above, it will not be possible to extend these facilities to such diagnostic clinics and the sufferers will be the patients only. 4. The letter attached as Annexure `D to the d.o. letter under reference pertains to calling for additional information with respect to certain `Cardiology equipments, hence it is felt that the same considerations may not be applicable in the case at point. 5. In case further clarificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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