TMI Blog2010 (10) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... nts-hospital should be penalised for the reason that the hospital violated conditions of Notification No. 64/88 in 1994-95 and thereafter - This case of the Revenue is clearly unsustainable in law as it is diametrically against the ruling of the Hon’ble High Court in Apollo Hospitals Enterprise case - Therefore, held that the proposals in the show-cause notice are not sustainable in law. - C/1468/2002 - A/348/2010-WZB/C-II/(CSTB) - Dated:- 6-10-2010 - S/Shri P.G. Chacko, M. Veeraiyan, JJ. REPRESENTED BY : Shri J.C. Patel, Advocate, for the Appellant. Shri Manish Mohan, SDR, for the Respondent. [Order per : P.G. Chacko, Member (J).]. - In this appeal filed by the appellant, a hospital, the challenge is against the Commissioner s order demanding duty of over Rs. 76 lakhs on a few medical equipments which had been imported by the hospital during the period from August, 1988 to August, 1993, confiscating the said goods under Section 111(o) of the Customs Act with option for redemption thereof against payment of fine of Rs. 2 lakhs, and imposing a penalty of Rs. 50,000/- on the appellant under Section 112(a) of the Act. The above demand of duty is consequential to den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to question its validity in collateral proceedings like the present one. In this context, the learned counsel has claimed support from Hon ble Bombay High Court s judgment in Yeshwant Gajanan Joshi and Others v. Hindustan Petroleum Corporation Ltd., AIR 1988 Bombay 408 and the Hon ble Madras High Court s judgment in Nuwood Private Ltd. v. Superintendent of Central Excise, 1981 (8) E.L.T. 184 (Mad.). 3. However, the thrust of the arguments of the learned counsel today is on the effect of rescission of Notification No. 64/88-Cus. by Notification No. 99/94-Cus., dated 1-3-1994. It is contended that no liability can be cast on the appellant on the ground of breach of any of the conditions of Notification No. 64/88-Cus. for any period post-1-3-1994. It is pointed that, even in the show-cause notice, the allegations against the hospital pertain to 1994-1995 as also to certain years subsequent thereto and, therefore, neither the demand of duty nor the penal action of the Commissioner is sustainable in law. In this connection, learned counsel has relied on a commentary on Section 6 of the General Clauses Act, 1896 as also on the following decisions : (i) Apollo Hospitals Enterpri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. 12 (Bom.). It is submitted that the Hon ble High Court referred specifically to Section 159A of the Customs Act and held that the rescission of Notification No. 64/88-Cus. did not affect the liability incurred by the petitioners with regard to fulfilment of Clause 2(b) of the Notification. According to the learned SDR, this view taken by a Division Bench of the High Court should be preferred to the view taken by a learned Single Judge of the Hon ble Madras High Court in Apollo Hospitals Enterprise Ltd. (supra) case. It is argued that, if the Bombay High Court s decision in Shah Diagnostic Institute Pvt. Ltd. (supra) case is followed, the present appellant must be held to be liable to pay duty on the goods in question and be penalised on the ground of breach of conditions of Notification No. 64/88-Cus. Learned SDR has also claimed support from a decision of this Bench vide Central India Institute of Medical Science v. Commissioner, 2008 (231) E.L.T. 113 (Tri.-Mumbai). Learned SDR has relied on this decision for two purposes. Firstly, on the question whether any cause of action would be against the importer of medical equipments who availed the benefit of Notification No. 64/88-Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treatment at reasonable charges, either on the basis of the income of the patient concerned or otherwise to patients other than those specified in clauses (a) and (b). 7. Appellant produced the requisite certificates to the proper officer of customs at the time of clearance of each consignment. The medical equipments imported by them were accordingly allowed to be cleared duty-free in terms of the above Notification. This happened during the period from August, 1988 to August, 1993. Undisputedly, the DGHS monitored the conduct of the appellant apparently for a period up to 1994. The show-cause notice in question was issued on 10-9-1999 on the basis of the results of certain investigations which commenced with a visit of officers of customs (SIIB) to the hospital on 26-11-1998. During a subsequent visit of the officers, the medical equipments in question were physically inspected and records verified. At around the same time, copies of the relevant bills of entry and allied documents were also recovered from the hospital. A statement of the Medical Director of the hospital was recorded on 7-1-1999 under Section 108 of the Customs Act, wherein he inter alia stated that all the medi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation. The show-cause notice, therefore, proposed to confiscate the goods under Section 111(o) of the Customs Act and to impose penalty on the appellant under Section 112 of the Act. It also proposed to penalise the DGHS under Section 112 of the Act for the alleged abetment of the importer s offence. 8. Before any further discussion, we should make an endeavour to discern the scope of the allegations raised in the show-cause notice. It appears from the notice that the department issued a summons in September, 1998 to the hospital and, in response to that, hospital supplied certain records under cover of letter dated 14-10-1998. No copy of this letter is available on record, but the counsel has shown us a copy, from which it appears that income-tax assessment orders for the period from 1989 to 1997 and details of OPD and IPD registers (for what period?) were supplied by the hospital along with copies of the import documents. It further appears that the hospital submitted a chart indicating the percentage of IPD and OPD patients who where given free treatment for the period from 1988-89 to 1995-96, which indicated that free treatment was given to 40% to 45% of OPD patients and 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant on the ground that they did not fulfil the conditions of the Notification during 1994-95 and afterwards. It was this allegation which was denied by the appellant in their reply to the show-cause notice. In this scenario, we think it will be opportune for us to consider the learned counsel s arguments on the effect of rescission of Notification 64/88-Cus. The Notification was rescinded on 1-3-1994 by Notification No. 99/94-Cus., dated 1-3-1994. The question mooted by the learned counsel is whether the proposals in the show-cause notice can be sustained on the basis of alleged contravention of the Notification for any period after 28-2-1994. In this connection, learned counsel has referred to a commentary on Section 6 of the General Clauses Act vide Principles of Statutory Interpretation by Guru Prasanna Singh, Twelfth Edition, 2010 . He has invited our attention to the relevant paragraph of Chapter VII, on page 700, wherein it is said that the effect of clauses (c) to (e) of Section 6 of General Clauses Act is to prevent the obliteration of a statute in spite of its repeal to keep intact the rights acquired or accrued and liabilities incurred during its operation and permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Apollo Hospitals Enterprise Ltd. (supra). In that case, a learned Single Judge of the High Court considered the effect of rescission of Notification No. 64/88-Cus. and held as under : 43. Having denied such exemption whether it is open to the petitioners to contend that after the rescinding of Notification No. 64/88, it is not open to the authorities to enforce the liability. The answer is simple, in view of the judgments of the Supreme Court referred to above. The petitioners those who benefited the tax exemption are bound to discharge the liability during the period when the said Notification 64/88 was in force. Hence it is always open to the authorities to enforce such obligation only during that period when the Notification No. 64/88 was in force and not for the subsequent period. So it is for the authorities to establish that the petitioners had violated the conditions imposed under Notification No. 64/88 subsequent to their availing the benefit of the exemption of Duty and before the end of February, 1994, since Notification 99/94, rescinding the Notification 64/88 came into force on 1-3-94. Elsewhere in his judgment, his lordship made it clear that it was not op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch obligation for such period and not for any subsequent period. The Hon ble High Court s further finding in Apollo Hospitals Enterprise case is to the effect that it is for the authorities to establish that the hospital had violated the condition of Notification No. 64/88 subsequent to their availing of its benefits but before the end of February, 1994. These findings of the Hon ble Madras High Court in Apollo Hospitals Enterprise case are not in conflict with any decision of the Hon ble Bombay High Court or of the Hon ble Supreme Court in relation to Notification No. 64/88. This ruling is squarely applicable to the instant case wherein the Revenue s case is that the medical equipments in question should be confiscated and the appellants-hospital should be penalised for the reason that the hospital violated conditions of Notification No. 64/88 in 1994-95 and thereafter. This case of the Revenue is clearly unsustainable in law as it is diametrically against the ruling of the Hon ble High Court in Apollo Hospitals Enterprise case. We, therefore, hold that the proposals in the show-cause notice and the corresponding findings of the learned Commissioner are not sustainable in law. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
