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TMI Blog2001 (10) TMI 927X X X X Extracts X X X X X X X X Extracts X X X X ..... the Research Society to the premises of Manav Charitable Hospital, Bangalore and brought back to the appellant society and also unauthorisedly allowed the said hospital to use the said equipment to treat the patients other than the appellant Research Society patients. Accordingly, a Show-cause notice dated 7-2-2000 has been issued to the appellants as to why "(a) The benefit of exemption of duty under Customs Notification No. 64/88 Cus, dt. 1-3-88 should not be denied in respect of the medical equipments valued at Rs. 15,72,379/- mentioned at para 3 supra (except Sl. No. 1 which has been imported through ACC, Chennai) and the Customs duty amounting to Rs. 21,58,681/- (Rupees Twenty-one Lakhs Fifty Eight Thousand Six Hundred Eighty-one only) equal to the duty foregone on the said medical equipments, imported through ACC, Bangalore, should not be demanded under Section 28(i) of the Customs Act, 1962. (b) The impugned goods i.e. medical equipments mentioned at Sl. No. 2 to 4 at para 3 above, seized on 22-9-1999 from the premises of Research Society, Bangalore, which had been removed unauthorisedly from the premises of the Researc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. ACC [1987 (30) E.L.T. 641] and CCE v. Raghuvar India Ltd., reported in [2000 (118) E.L.T. 311]. He said that demand can be raised within the stipulated time as envisaged under Section 28 of the Customs Act i.e. normal period of six months and maximum period under Section 28 is five years if there was suppression of facts by the importer and at any rate it cannot be extended beyond the period of 5 years. In the instant case, Show-cause notice has been issued on 17-2-2000 and accordingly there was no justification to raise the demand for the period relating to 91, after a decade. He contended that Statutory Authorities are to be exercised within the limitation provided for in the Statute, and it is well settled that no court is empowered to direct a Statutory Authority to ignore the period of limitation prescribed under a Statute to make an assessment as it was held by the Apex Court in the case of Hope Textiles Ltd. v. U.O.I. reported in [1994 (205) ITR 508 (SC)]. He submitted that while deciding the time bar issue, the Commissioner has grossly erred in relying upon the decision of the Karnataka High Court in the case of Medical Relief Society of South Kanara v. U.O.I. [1999 (111 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty under Section 114A as well as penal interest under Section 28AB, on the ground that the said provisions were not in force at the time of the import relying upon the various decisions including Markendeya Prasad Radha Krishnan v. CCE Cal-II reported in [1998 (102) E.L.T. 705 = 1998 (25) RLT 919]. It was also submitted that this view was upheld by the Supreme Court as reported in 1999 (107) E.L.T. at Page A 121 under Court Room Highlights. 8. Shri George Thomas, learned DR appearing for the Revenue justified the action of the adjudicating authority in denying the benefit in terms of Notification 64/88, as well as imposing fine and penalties. He submitted that Commissioner was right in holding that demand was not barred by time relying upon the decision of the Karnataka High Court in the case of Medical Relief Society of South Canara v. U.O.I. (supra). He said that if the post-import conditions are not fulfilled as specified in the Notification, proceedings for recovery of the exempted customs duty or the confiscation of the equipment in such circumstances does not fall foul of Section 28 as it was held therein. In this context, he referred to the decision of the High Court ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quipments. They claimed exemption under 64/88-Customs, dated 1-3-88 to the extent of Rs. 21,58,681 by producing necessary customs duty exemption certificate. The imports were made on 4-4-90 and 7-7-91 respectively. On examining the bills of entry as well as relevant exemption certificate goods were assessed finally allowing exemption as claimed. It is not a case that the provisional assessment was made at the time of importation and/or enforcing the bond. If it was a provisional assessment the position would have been different. Show cause Notice has been issued only on 17-2-2000 on the ground that the party has failed to comply with the provisions of aforesaid notification. Demand was raised nearly after a decade as it was pointed out by the appellants counsel. The demand is made under Section 28 of the Customs Act. As per the provisions of the Section 28 of the Act, demand can be raised for six months in the normal circumstances and maximum of five years if there was allegation of suppression of facts. There is force in the arguments advanced on behalf of the appellants that statutory authorities are to be exercised within the limitation provided for in the statute. In the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y authorities cannot go beyond the provisions of statutes, we do not find any justification to raise the demand after the expiry of 5 years from the relevant date as per Section 28 of the Act. The demand is barred by time. Accordingly appellants succeed on this issue. 14. Next question arises for our consideration is whether Department was right in denying the benefit of exemption in terms of Notification 64/88-Cus. on the ground of non-fulfilment of conditions. As can be seen from the show cause notice as well as impugned order, emphasis is on removal of equipments to Manav Charitable Hospital for a temporary period and accordingly failed to fulfil the condition of the notification. It was submitted that temporary movement to and from Manav Charitable Hospital did not result in mis-use of the equipment. It was also submitted that the notification having not laid down any procedure or formality of approval to remove the equipment, the appellant could not have followed any such procedure. We find that if there was any irregularity in not taking the permission, for removal of equipment that may be a case for penalty for not following such procedure. But the point to be consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time bar issue". 17. I therefore proceed to record my order. Since I have had the privilege of going through the order prepared by learned Member (J), I am not repeating the issues involved and the submission made herein, which are brought out in the order of Member (J). However, after considering the same, I find - (a) The Apex Court in the case of Mediwell Hospital & Health Care (P) Ltd., v. U.O.I. [1997 (89) E.L.T. 425 (S.C.)], at p. 432, while considering the very same Notification i.e. Notification No. 64/88-Cus, observed, in para 12 of this reported decision - ".......Needless to mention the Government has granted exemption from payment of Customs duty with the sole object that 40% of all outdoor patients and entire indoor patients of the low income group where income is less than Rs. 500/- p.m. would be able to receive free treatment in the Institute. That objective must be achieved at any cost, and the very authority who granted such certificate of exemption would ensure that the obligation imposed on the person availing of the exemption notification are being duly carried out and on being satisfied that the said obligation have not been discharged they can en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be within the time prescribed with reference to Section 28(3)(a) then we would be fettering issuing of the liability of demand of duty under Section 125(2) and liability for confiscation under Section 111(o) to the time limits of Section 28(3)(a). This cannot be done, since under Section 111(o) and or 125(2), there is no limitation of time prescribed. (c) The impugned orders of the Commissioner, therefore resorting to recover duty, impose penalty and fine, without complying with the Supreme Court directions, are therefore, to my mind, not as per law, premature and hasty. The occasion for liability to confiscation for violation of Section 111(o) and duty liability has not come. Therefore the question of a demand of duty under Section 125(2) of Customs Act, 1962 has not arisen and the question of time bar does not arise. (d) The demands issued herein are therefore not barred by limitation prescribed by Section 28(3)(d), since the limitation prescribed therein is the outer limit and the demands could be made thereunder, even if the question of reckoning the time has not arisen. (e) I find no reason to uphold any penalty since liability for confiscation and demands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfiscation shall be in addition to any duty payable in respect of goods; that Section 125(2) does not contain any machinery for recovery of duty as provided in Section 28 of the Customs Act. He relied upon the decision in the case of HCL HP Ltd. v. Commissioner of Customs, New Delhi [1999 (112) E.L.T. 604 (T)] wherein it was held as under : "Collector's reasoning to ignore Section 28 and demand duty on the basis of provisions of Section 125 of the Customs Act is not correct in law. A bare reading of Section 28 indicates that duty has to be recovered under Section 28 within the period of limitation laid down if there has been a short levy...... Simply because the goods duly cleared by the authorities are available for seizure and confiscation, Section 28 cannot be ignored for recovery of differential duty. Section 125 in our view will apply in the cases where the date of short levy or importation is not available and the confiscated goods are not proved to be duty paid." 22. Reliance was also placed on the decision in the case of Tata Infotech Ltd. v. Commissioner of Customs, 2000 (117) E.L.T. 252 (T)] wherein the following was held : "Harmonizing the two, Section 125 would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other sphere of human activity. 25. The learned Counsel also submitted that the decision in the case of Mediwell Hospital and Health Care (P) Ltd. v. U.O.I., [1997 (89) E.L.T. 425 (S.C.)] was considered by, the Appellate Tribunal in the case of C.T. Scan Research Centre (P) Ltd. v. Commissioner of Customs [2001 (45) RLT 29]. In the said case the goods claiming benefit of Notification No. 64/88-Cus. was imported in July, 1991 and the show cause notice was issued in September, 1998 for non-fulfilment of post-importation conditions. The Tribunal held that "Section 28 of the Customs Act provide a time period of 6 months for demand of duty and in the case of fraud, collusion, etc., 5 years. We find that since the show cause notice has been issued beyond permissible period of 5 years provided under Section 28 of the Customs Act, hence, decision of the Supreme Court in the case of Mediwell Hospital & Health Care Pvt. Ltd. vs. U.O.I. (supra) cannot be said to apply to the facts of the present case as the demand is time barred. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recover the amount of duty payable on the same. Proceedings for recovery of the exempted Customs duty or the confiscation of the equipment in the above circumstances does not fall foul of Section 28." The learned D.R. pointed out that Karnataka High Court dismissed the appeal with costs. He also mentioned that the Karnataka High Court has followed the decision of the Supreme Court in Mediwell Hospital case. He also relied upon the decision in the case of Yellamma Dasappa Hospital v. Commissioner of Customs, Bangalore [2000 (120) E.L.T. 67 (Kar.)] wherein the Karnataka High Court followed the decision of the Supreme Court in Mediwell Hospital case regarding continuing obligation of the hospital and the right of the Customs Department in demanding the Customs duty after following the procedure prescribed in law. The learned D.R. emphasised that in view of the decision of the Apex Court and Karnataka High Court, within whose jurisdiction the Appellants fall, there is continuing obligation on their part as they have imported equipments without payment of Customs duty; that as the Appellants have not complied with the post-importation conditions the Department is well within its right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification. This Notification was considered by the Supreme Court in the case of Mediwell Hospital and Health Care (supra) and it was held by the Apex Court that "..................Notification granting exemption must be construed to cast continuing obligation on the part of all those who have obtained the certificate from appropriate authority and on the basis of that have imported equipments without payment of Customs duty to give free treatment to atleast 40% of the outdoor patients as well as would give free treatment to all indoor patients belonging to the families with an income of less than Rs. 500/- per month............... If on such inquiry the authorities are satisfied that the continuing obligations are not being carried out then it would be fully opened to the authorities to ask the person who have availed of the benefit of exemption to pay the duty payable in respect of equipments which have been imported without payment of Customs duty................. that objective must be achieved at any cost and the very authority who have granted such certificate of exemption would ensure that the obligation imposed on the person availing of the exemption Notification are being d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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