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2016 (3) TMI 989 - DELHI HIGH COURT

2016 (3) TMI 989 - DELHI HIGH COURT - 2017 (345) E.L.T. 182 (Del.) - Applicability of Section 114A and 28AB of the Customs Act, 1962 to the imports - Medical equipment imported for use in the diagnostic centre cleared without payment of duty - Availed exemption from payment of customs duty under Customs Notification No.64/88 dated 1st March, 1988 on the strength of certificate issued by Director General of Health Services - Held that:- on the date of import of the seven consignments by the Petit .....

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provisions did not exist in the statute at the time of import of the seven equipments by the Petitioner. In other words, the Department is unable to deny that neither Section 114A nor Section 28AB could have been invoked as far as the SCN issued to the Petitioner was concerned. Therefore, in the interests of justice recovery of penal interest under Section 28AB as well as the penalty under Section 114A of the Act by the department is not sustainable. Decided in favour of petitioner - W. P. (C) .....

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Petitioner, inter alia, to pay a sum of ₹ 49,13,969/- which comprised duty, redemption fine, interest under Section 28AB of the Customs Act, 1962 ( Act ) and penalty under Section 114A of the Act. 2. The background to the petition is that between March 1990 to December, 1992, the Petitioner, which is a diagnostic centre engaged in providing diagnostic services, imported seven consignments of medical equipment for use in the diagnostic centre. On the strength of the certificate issued by th .....

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he exemption under Notification No.64/88 since the Petitioner had failed to fulfil the conditions subject to which such exemption was granted. The SCN proposed to recover the differential duty in respect of the said seven consignments. The SCN also proposed imposition of penalty on the Petitioner under Sections 112 and 114A of the Act along with penal interest under Section 28AB of the Act. 4. At this stage, it is required to be noticed that both Sections 28AB of the Act and Section 114A of the .....

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Act. The equipments imported by the Petitioner were confiscated under Section 111(o) of the Act and the redemption fine of ₹ 2 lakhs was imposed. Additionally, a penalty of ₹ 32,47,446/- (equal to the duty plus interest) was levied under Section 114A of the Act. Further, interest under Section 28AB of the Act was also imposed. 6. Aggrieved by the above adjudication order, the Petitioner preferred an appeal before the Customs Excise & Gold (Control) Appellate Tribunal (CEGAT) sub .....

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AT observed as under in para 11 of the said judgment: 11. As regards penalty under Section 114A and the interest demanded under Section 28AB, we find that the said provisions were enacted subsequent to the imports and therefore the said provisions will not be applicable in the facts and circumstances of the case. The penalty under Section 114A and interest demanded under Section 28AB cannot therefore sustain. 8. Aggrieved by the above order, the Customs Department, i.e., the Commissioner of Cust .....

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port), Mumbai v. M/s Jagdish Cancer & Research Centre decided on 2nd August, 2001. Since the matter stands covered by this judgment, as noticed above, the pleas raised by M/s Dewan Chand Satyapal Agarwal Imaging & Research Centre fail and the order of the CEGAT is not sustainable. In the result, the appeal is allowed, the order of the tribunal is set aside and that of the Commissioner of Customs, New Delhi is restored. There will be no order as to costs. 10. Following the above order a n .....

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nd penal interest was set aside by the CEGAT and that portion of the CEGAT order was not challenged by the Department before the Supreme Court. 12. The Petitioner also filed IA No. 2 in the disposed of Civil Appeal No.52/2001 before the Supreme Court on 5th December, 2001 seeking a clarification that the Petitioner would not liable to pay any penalty or penal interest under the aforementioned provisions. This application was disposed of by the Supreme Court on 22nd April, 2002 by the following o .....

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ated 17th January, 2003 informed the Petitioner that interest and penalty in the sum of ₹ 49,13,969/- remained unpaid and should be deposited within 15 days. On 27th March 2003, the Petitioner once again pointed out that the imposition of penalty and interest under the aforementioned two provisions was not warranted. A further representation was made on 9th April, 2003 by the Petitioner and, thereafter, the present writ petition was filed. 14. On 8th May 2003, this Court while issuing noti .....

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granted to the parties to apply for early hearing. CM No.5190/2003 We have heard learned counsel for the parties. Having perused the orders passed by the Supreme Court in Civil Appeal No.52/2001 and in petitioner s IA No.2/2001 dated 22nd April, 2002 and bearing in mind the ratio of the decision of the Apex Court in COMMISSIONER OF CENTRAL EXCISE Vs. ELEGE EQUIPMENT LTD., (2001) 128 ELT, 52 (SC), we are of the view that it is a fit case where interim relief needs to be granted to the petitioner .....

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e balance amount to the satisfaction of the Commissioner of Customs (Import & General), New Custom House, New Delhi. The applications stands disposed of. 16. It is stated that the Petitioner has furnished a security for the balance sum which remains stayed in terms of the aforementioned order. 17. This Court has heard the submissions of Mr M.P. Devnath, learned counsel for the Petitioner and Mr Satish Kumar, learned Senior Standing counsel for the Respondent. 18. The fact that, on the date o .....

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8. 19. It is perhaps for this reason that when the CEGAT by its aforementioned order dated 29th May 2000 set aside the levy of penalty and penal interest on the Petitioner, the Department Revenue did not question that portion of the CEGAT s order in its appeal before the Supreme Court. The Department was aware that Sections 28 AB and 114 A of the Act could not be made applicable to the Petitioner notwithstanding that the Petitioner may have not conformed to the conditions for availing the exempt .....

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dgment of the Supreme Court in Commissioner of Customs v. Jagdish Cancer & Research Centre (supra) was not a precedent for setting aside the order of the CEGAT and restoring the order of the Commissioner of Customs on the question of the applicability of either Section 114A or 128AB of the Act. 21. The question, therefore, that arises is whether as a result of the order dated 29th August 2001 of the Supreme Court, the entire order dated 30th September 1999 passed by the Commissioner of Custo .....

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shall not prevent the Petitioner from taking other steps in accordance with law if available . 23. The only issue raised before this Court by the Department is that instead of filing the present writ petition, the Petitioner should have again filed an appeal before the CESTAT against the order of the Commissioner dated 30th September, 1999. 24. However, the Court is unable to appreciate how the Petitioner could possibly have gone before the CESTAT when the order dated 30th September, 1999 of th .....

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