TMI Blog2018 (8) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... f import, to undertake to produce the prescribed certificate within such time as specified by the Assistant Collector of Customs and in paragraph 4(c) it is enjoined that the importer shall furnish the same - It was only in the show cause notice issued more than eight years after the import that this certificate was called for. The appellant did plead before the original authority that it would be well nigh impossible to secure such a certificate after this lapse of time. Moreover, with the Director General of Health Service having withdrawn the duty exemption certificate , there was a disclaimer of being obliged to issue such a certificate. The consequence of such withdrawal is an aspect that is moot to the eligibility for import with the privileges under the notification - eligibility at the time of import is clearly distinguishable from the obligation to fulfil post- importation condition with the attendant detriment of confiscation. The certification sought for by the adjudicating authority is clearly not applicable to importer and the non-production thereof is no ground for confiscation or denial of privileges of exemption. Whether appellant was derelict in extending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dispute is essential to a clearer appreciation of the proceedings. The imports were effected in 1991 and, while confiscation of goods may be proceeded with under section 111 without reference to elapse of time, recovery of duty is constrained by the limits that bind statutory authorities in section 28 of Customs Act, 1962. Furthermore, the exemption notification did not prescribe any time frame to determine compliance with the conditions prescribed therein. This conundrum was resolved judicially, particularly in the imports of medical equipment against conditional exemption, and sustained by the principle of continuing obligation enunciated in Mediwell Hospital Health Care Pvt Ltd v. Union of India and others [1997 (89) ELT 425 (SC)] and the alternative empowerment for recovery under section 125 (2) when goods are confiscated enunciated in Commissioner of Customs (Import), Mumbai v. Jagdish Cancer and Research Centre [2001 (132) ELT 257 (SC)]. In view of this, the challenge of limitation to recovery of duty in cases of open-ended conditional exemptions where goods are confiscated for non-compliance with post- importation conditions is not required to be gone into. 3. We ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r patients or outdoor patients and failure to produce evidence of reasonableness of charges collected from other patients. 6. Learned Counsel for appellant seeks relief primarily on the ground that the conditions in the notification had been complied with. Though Learned Authorised Representative, while reiterating the findings of the original authority, has relied upon a number of decisions, all of these do not have to be dealt with in view of the accepted premises on which proceedings were initiated. In the context of factual submissions, these are not of much relevance and, to the extent that they are, we shall, at the appropriate places, refer to them. 7. The first issue to be considered is the correctness on the part of the adjudicating authority to disentitle the appellant from the privilege of notification no 64/88-Cus dated 1st March 1988. This, in our opinion, is an incorrect finding. The appellant had, at the time of import in February 1991, cleared the said equipment upon presentation of all documents that qualified them to the benefit of the exemption; alleged subsequent failure to comply with post- importation conditions may lead to confiscation for non-complianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he confiscated goods. Only when this contingency is met, the duty becomes payable. In the present case, admittedly, such an option was not exercised and the confiscated machinery was not redeemed by the Institute. As a matter of fact, thus, no fine has been paid. xxxx 16. Indubitably, unless an option is exercised, fine does not become payable. Sub-section (2) of Section 125 uses the expression imposed by stating where any fine in lieu of confiscation of goods is imposed . In Black law dictionary (Tenth edition), the word impose is defined as To levy or exact (a tax or duty) . Thus, it has to be a levy or exact which is become payable and has to be paid. Likewise, the word impose is defined by Oxford English Dictionary, as relevant for the purpose of the present case, as Lay or inflict (a tax, duty, charge, obligation, etc.) (on or upon), esp. forcibly; compel compliance with; force (oneself) on or upon the attention etc. of. 17. In view of the above, we cannot agree with the submission of Mr. Radhakrishnan that fine been imposed in the present case. The stipulation contained in the adjudicating order was only contingent in nature which contingency would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble Supreme Court, though not dealing with appeal against the decision cited by Learned Authorized Representative, has, nevertheless, rendered the finding on the submission made on behalf of Revenue that 15. Mr. K. Radhakrishnan, learned senior counsel appearing for the Department, argued that even if an option was not exercised, the moment it was stated in the order of the Commissioner that fine is being imposed , sub-section (2) would get attracted. We do not agree with the aforesaid submission of Mr. Radhakrishnan. The order confiscating the goods has already been reproduced above. Insofar as the payment of fine is concerned, only option was given (and that was only course of action which could be visualized under Section 125). The order categorically states that the importer may redeem the confiscated goods on payment of fine of ₹ 1,00,000 (Rs. One lakh only) . which is the pith and substance of the decision of the Hon ble High Court of Bombay. Indeed, the goods, if available, upon confiscation vests with the Central Government in the possession of the adjudicating authority and it is only upon release by the Central Government, on redemption, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the notification. We have found supra that eligibility at the time of import is clearly distinguishable from the obligation to fulfil post- importation condition with the attendant detriment of confiscation. That is the clear thread in the decision of the Hon ble Supreme Court in re Jagdish Cancer Research Centre, the duty exemption certificate , being relevant to determine eligibility for import, is not material to action under section 111(o) of Customs Act, 1962 which is contingent upon non-conformity with germane post-importation conditions. Had the impugned order chosen, under section 28 of Customs Act, 1962 to recover duty that had not been collected at the time of import, owing to non-eligibility, this may have been sufficient cause. That is now an academic issue with the demand having been made under other provisions and the application of limitation of five years from date of import. Therefore, the subsequent withdrawal of a validly issued duty exemption certificate , has no consequence on the impugned proceedings. 13. We take note of another aspect that appears to have been overlooked by the adjudicating authority. The universal qualification to be eligible for ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indoor patients with income below the prescribed threshold stands on two limbs and the conjunction and makes it indubitably clear that these have be to viewed for compliance in terms of complementing each other. Accordingly, to conform to the condition, not less than a tenth of the beds must be earmarked for patients in this category and whose treatment must be effected without any charge. That a tenth of the beds had been so earmarked is clear from the data furnished to the adjudicating authority and has not been controverted. The charging of patients who occupied beds in excess of that so earmarked is not, therefore, a transgression from the stipulations prescribed for continual conformity. The finding of the adjudicating authority that the compliance is in conformity only when the beds so earmarked are relatable to treatment with the imported equipment is clearly executive overreach in the absence of any such delineation in the conditions appended to the privilege of exemption. The pre-requisites laid down by the Hon ble Supreme Court in re Mediwell Hospital and in Health Care Pvt Ltd v. Union of India [1997 (89) ELT 425 (SC)] are not set forth in the impugned order and the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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