TMI Blog2008 (6) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... . Naik, Mayur Shroff, Bharat Raichandani, V.M. Doiphode, K.P. Joshi, Cyrus Bharucha, Ms. Deepti Mishra, P.V. Patankar, Manoj Sanklecha, Ms. Shilpa Balani, A. Hidyatullah, MPS Joshi, Rohan Shah, A.J. Rana, S.N. Parikh, A.B. Nawal, for the Appellant. Shri B.K. Singh, Jt. CDR, for the Respondent. [Order per : K.K. Agarwal, Member (T)]. - These are 34 appeals arising out of orders passed by different Commissioner/Commissioner (Appeals). Since the issue involved in all the appeals is the same, i.e. regarding violation of post-import conditions imposed under Notification No. 64/88, leading to confiscation and demand of duty both under Section 28 of the Customs Act, 1962 and Sec. 125(2), they are being decided through a common order. 2. Briefly the facts of the case are that Notification No. 64/88, dated 1-3-88 provides exemption to hospital equipments imported by specified category of hospitals subject to certification from Director General of Health Services (DGHS) etc. It will be useful to reproduce some of the salient features of the notification which are subject matter of dispute before us. The notification reads as under : "In exercise of powers conferred by sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars and (iv) That such hospital when start functioning would be relatable to hospital specified in Para 1, 2, or 3 of this table, and the said Ministry of Health and Family Welfare certifies to that effect : provided that - (a) in case of a hospital relatable to para 3 of this table the importer produces evidence to the Assistant Collector of Customs............. (b) The importer shall give an undertaking in writing to the Assistant Collector at the time of clearance of the said hospital equipment that the importer shall furnish certificate from the said Ministry of Health and Family Welfare or from Director General of Health Services, Government of India, within such period as the Assistant Collector of Customs may specify in this behalf or within such extended period as the Assistant Collector of Customs, on sufficient cause being shown, may allow in each case to the effect - (i) that such hospital equipment has been installed in the hospital; and (ii) that such hospital started functioning (c) The importer shall furnish, at the appropriate time, the certificates referred to in (b). (d)..............." 3. In respect of all the appeals before us, the common all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Wockhardt Hospital and Bombay Hospital have been rendered per incuriam for the reasons that : (i) the High Court did not have jurisdiction to entertain the said appeals as the impugned order involve a question relating to rate of duty? and (ii) judgments of the Hon'ble Supreme Court declaring the law on the scope of Section 125 of the Customs Act were not considered? (ii) Whether obligations imposed under Notification No. 64/88 regarding provision of free treatment to 40% of the outdoor patients and to 10% of indoor patients having income less than Rs. 500/- per month etc. is a continued obligation us held by the Supreme Court in the Mediwell Hospital and Health Care Private Limited case 1997 (89) E.L.T. 425 (S.C.) = 1996 Indlaw SC 2044 or not and whether the demand or any other cause of action would lye after the recession of the Notification No. 64/88 on 1-3-94 or the obligation was required to be fulfilled only up to the date of rescission of notification No. 64/88 and not thereafter? (iii) Whether the demands of duty were sustainable even though the original show cause notice either did not seek to recover any duty whatsoever or the original show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided under Notification No. 64/88 and accordingly involved an interpretation of notification, it has to be considered as a matter relating to rate of duty and therefore the Hon'ble Bombay High Court had no jurisdiction to entertain the same. In support thereof, he referred to the decision of the Supreme Court in the case of Naveen Chemicals - 1993 (68) E.L.T. 3 (S.C.), wherein para 12, it has been held that a dispute as to the classification of the goods and as to whether or not they are covered by an exemption notification relates directly and proximately to the rate of duty applicable thereto for the purpose of assessment. In support of his plea that the decision which is rendered without noticing the provisions of the statute is to be considered as per incuriam and accordingly the decision non est having no precedent value, he referred to the decision of Apex Court in the case of State v. Rattan Lal Arora - (2004) (4) SCC 590 wherein it was held that where in a case the decision has been rendered without reference to statutory bars, the same cannot have any precedent value and shall have to be treated as having been rendered per incuriam. It was further stated that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 125(2) of the Customs Act, 1962. If the appellants were not interested in redeeming the goods, then, the Customs Act does not create liability to pay the customs duly. If the statute does not create liability to pay duty, one fails to understand how the appellant could be directed to make the pre-deposit. Therefore, the order of the Tribunal dated 17-1-2003 did suffer from a mistake or error apparent on the fact of record, as such it could rectify its order in exercise of its power......" It was submitted that in all the appeals before us, the appellants are not interested in exercising their option to redeem the goods and therefore as per this decision duty cannot be demanded from them. The Bombay High Court incorrectly ignored this decision by observing that it was a prima facie observation because the judgment disposed off the petition on merits. 5.2 Shri Rohan Shah, one of the advocates for the appellants submitted that even if the decision of the Bombay High Court in the case of Wockhardt Hospital and Bombay Hospital are not considered as per incuriam, the law on the subject has been laid down by the Supreme Court in the case of Mohan Meakin - 2000 (115) E.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal a decision is given per incuriam if it acted in ignorance of a previous decision of its own or of a court of coordinate jurisdiction which covers the case before it. Second, when it has acted in ignorance of House of Lords decision. Third, when the decision is given in ignorance of the terms of the statute or rule having statutory force. And fourth, in rare and exceptional cases, if it is satisfied that the earlier decision involved a manifest slip or error and there is no real prospect of a further appeal to the House of Lords. As regards the first proposition that the decision have been given in ignorance of the previous decision, he referred to the book on Jurisprudence by R.W.M. Dias which while dealing with the hierarchy of courts has referred to the decision of Young v. Bristol Aeroplane (1944) KB 718 wherein it has been held that "if a decision was given per incuriam i.e. in ignorance of statute or other binding authority, the court of appeal is not bound by it; nor may it be bound where the previous court has followed an incomplete report of a still earlier case. The incuria rule does not apply where the previous court, which is alleged to have overlooked to an ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deal with a situation where the option to redeem the goods is not exercised after clearance from docks. 5.6 Shri Singh submitted that even if it is presumed that the Bombay High Court decision in Wockhardt Hospital and Bombay Hospital cases were per incuriam but not admitted, the Tribunal is not competent to declare a decision passed by High Court as per incuriam. He referred to the decision of the Supreme Court in Kamlakshi Finance Corporation - 1991 (55) 433 E.L.T. (S.C.) in which it has been observed that the principle of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. If this healthy rule is not followed, the result will only be undue harassment to the assessees and chaos in administration of tax laws. He also referred to the seven member Bench decision of House of Lords in Cassell and Co. Ltd. v. Broome and another (1972) A.C. 1027, wherein, it was held that it is necessary for each lower tier including the court of appeal to accept loyally the decisions of the higher tiers. Where decisions manifestly conflict, the decision in Young v. Bristol Aeroplane offers guidance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows : "The question before us is whether duty is payable even in the event of the option not being exercised. The decision of the Supreme Court in Jadgish Canser and Research Centre cited supra does not address itself to this issue. No such argument was ever raised before the Apex Court....." Similarly in the case of Bombay Hospital in para 6, Tribunal framed the following questions. "(i) Whether action for recovery of customs duty for violation of the conditions of Notification No. 64/88-Cus. is required to be initiated by the Ministry of Health and Family Welfare/Directorate General of Health Services or by the Commissioner of Customs? (ii) Whether action initiated by the Commissioner of Customs towards payment of such duties, levy of penalty and payment of fines in lieu of confiscation of offending goods under the Customs Act was beyond his jurisdiction in terms of Notification No. 64/88? (iii) Whether the demands raised by the Commissioner of Customs were barred by time in terms of the proviso to Section? It was submitted that none of the questions framed by the Tribunal in the two decisions related to determination of rate of duty but only with liability to pay dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med by the Tribunal as well as the Hon'ble High Court in both the cases nowhere deal with the determination of the rate of duty and the only question was whether duty can be demanded from the importer in those cases where he chooses not to exercise his option to redeem the goods on payment of fine under Section 125(2) after having cleared the goods from the docks. Whether there is a violation of conditions of notification or not was nowhere determined by the Tribunal in any of the cases. The only bar against filing an appeal to the High Court is that the Tribunal should not deal among others with a matter relating to determination of rate of duty. Rate of duty and determination of rate of duty are two different things. Thus if as a consequence of confiscation the importer is required to pay duty for which the rate of duty is required to be determined, then this will be remote contingency and the CEGAT order cannot be said to have any direct or proximate relation to determination of rate of duty as has been observed by the Hon'ble Supreme Court in the case of Naveen Chemicals cited supra. 5.10 As regards Apex Court decision in the cases of Mohan Meakin and Hargovind Das cited su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eat 40% of patients free of cost would continuously be fulfilled. This direction was contained in para 14 of the Mediwell order and the Supreme Court has in the Sri Sathya Sai case has overruled the direction issued in this para. Similarly in the case of Faridabad CT Scan Centre cited supra the Supreme Court has stated that its decision in the Mediwell case extending benefit of Notification No. 64/88 and striking down refusal of CDEC by the DGHS on the ground of discrimination under Art. 14 was not correct as principle of equity enshrined under Art. 14 docs not apply when the order relied upon is unsustainable in law and is illegal. Shri Hidayatullah ld. Advocate accordingly submitted that Mediwell decision has been overruled by the above decisions and therefore nothing survives in this case and accordingly it cannot be said that the obligation imposed under Notification No. 64/88 are a continued obligation. 6.2 Ld. Jt. CDR Shri B.K. Singh submitted that the decision of the Supreme Court in the Mediwell case has not been overruled and only parts of it have been overruled. Thus while the decision in Faridabad CT Scan Centre overrules only grant of CDECs to diagnostic centre not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other cause of action would lie after the rescission of notification No. 64/88 on 1-3-94 or the obligation are required to be fulfilled only up to the date of rescission of notification No. 64/88 and not thereafter? 6.4 Shri Hidayatullah, ld. Advocate submitted that the obligations imposed under Notification No. 64/88 even if they are considered to be a continuous obligation, the liabilities arising out of such notification cease to exist once Notification No. 64/88 was rescinded by Notification No. 99/94, dated 1-3-94. Once the notification is repealed it has to be held that it is no longer a valid notification for any punitive action. It was submitted that the effect of the rescission of exemption Notification No. 64/88 was dealt with by the Madras High Court in the case of Apollo Hospital - 2001 (133) E.L.T. 58 (Mad.) and the observations thereon are to be found in para 32 onwards. The Hon'ble High Court has relying upon the decision of the Supreme Court in the case of State of Rajasthan v. Mangilal Pindwal - 1996 (5) SCC 60 held that the result of repeal of a statute is that the statute repealed ceased to exist with effect from the date of such repeal. But at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n even if it is detected after the rescinding of the notification. 6.6 It was submitted by Shri D.B. Shroff, ld. Advocate on behalf of the appellant that a notification is to be considered as if it contained in the Act itself as has been held by the Hon'ble Supreme Court in the case of Parle Exports - 1988 (38) E.L.T. 741 (S.C.) that exemption by notification under Rule 8 of Central Excise Rules, 1944 is to be treated as if contained in the Act itself because it has statutory force and validity and therefore the reference to the General Clauses Act by the Madras High Court in Apollo Hospital case regarding effect of rescission of notification was correct and the decision cannot be ignored just because it did not deal with provisions of Sec. 159A of Customs Act, 1962. 6.7 Shri B.K. Singh ld. DR, on behalf of the Revenue, submitted that the decision of the Madras High Court in Apollo Hospital case cannot be considered as a correct decision as while considering the effect of rescission of notification recourse cannot be made to the provisions of General Clauses Act as General Clauses Act applies only to a Central Act or regulation as has been held by the Supreme Court in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. 766 which have dealt with the effect of rescission of notification and have held that the liability incurred under notification 64/88 continued even after rescission of notification as the period involved in these cases is subsequent to the date of rescission. These decisions have considered the Madras High Court decision in the cases of Apollo Hospital and Mohan Meakin and have distinguished them. Reference was also invited to the decision of the Supreme Court in Jadgish Cancer Research Institute - 2001 (132) E.L.T. 257 (S.C.) wherein it has been held that the liability under Notification 64/88 is a continuous liability. It was mentioned that the Delhi High Court has appointed Rosha Committee in the case of People's Union for Civil Liberty in W.P. No. 409/1996 which was required to look into the violations even after rescission of notification and the CDECs were cancelled for post-rescission violations. In the case of National Heart Centre - 2005 (191) E.L.T. 249 also it was held that action can be taken for non-fulfilment of post-import conditions even after the rescission of notification. The effect of rescission of notification has been dealt with by the Karnataka Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing from the repeal of the notification is that future imports even when made by hospitals, who may otherwise have been eligible under the repealed notification will not be entitled to such exemption and further as observed by the Larger Bench of the Tribunal in Lady Amphthil Nurses Institution case 2002 (150) E.L.T. 776 the obligation under Notification No. 64/88 are coterminous with the destruction of the equipment. Issue No. (iii) Whether the demands of duty were sustainable even though the original show cause notice either did not seek to recover any duty whatsoever or the original show cause notice did not identify or invoke any specific provision to sustain the proposed demand or though the original show cause notice specifically demanded duty under Section 28, the demands were confirmed under Section 125, Section 18(2) read with Section 143(3) or any other provision or no provision at all? 7.1 It was contended on behalf of the appellants that in majority of the cases demands were issued under Sec. 28 but were confirmed either under Section 125(2) or without citing any section under which the duty was confirmed and even though the finding portion of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is true that the Tribunal in several cases has held that the duty is not payable under Section 125(2) if the option of redemption is not exercised. However, our view, it is not a correct interpretation. It was contended that the show cause notice issued in Customs Appeal No. 17 of 2005 did not seek to recover duty and, therefore, the duty demand cannot be sustained. As stated earlier, where the liability to pay duty is consequential to confiscation then on confiscation if the goods are permitted to be redeemed by imposing fine, then on such imposition of fine duty becomes payable. Therefore, the fact that the duty was not specifically demanded in the notice would not matter. The contention that where the option is not exercised, the goods remain vested in the government and in that event Section 125(2) is not attracted is also without any merit. As stated earlier, in respect of the goods confiscated under Section 111(o) with an option to pay fine in lieu of confiscation the duty becomes payable on passing an order under Section 125(1). In such a case, whether the option is exercised or not is wholly irrelevant. Admittedly, the only issue canvassed before the Tribunal was regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005 (188) E.L.T. 374 wherein in para 12 it was observed that as regards time limit under Sec. 28, both sides have agreed that since the demand of duty do not relate to short levy or non-levy but has arisen, subsequently on account of failure to fulfil the post-import conditions under Notification No. 64/88 Section 28 has no application to a duty demand of this kind. However, since no specific time limit is prescribed under any other provision of the statute, the notice of demand in such cases cannot be subjected to any limitation of time. This view is supported by the decision of the Bombay High Court in case of Prakash Cotton Mills - 1987 (32) E.L.T. 534 (Bom.) and Supreme Court decision in the case of Commissioiner v. Raghuvar India - 2000 (118) E.L.T. 311 (S.C.). The decision of Larger Bench was approved by High Court as reported in 2006 (201) E.L.T. 555. Similarly in the case of A.R Gupta v. Commissioner - 2005 (191) E.L.T. 1139 it was held a show cause notice can be issued in terms of a notification under which the goods were cleared subject to some conditions. If the notice is not issued under Sec. 28, the limitation prescribed therein will not apply (para 8). In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that since on the date of import the licence was valid, the imports cannot be questioned. Goods imported during pendency of licence cannot be considered as illegal. Reference was also invited to the Supreme Court decision in the case of Jaslok Hospital - 2007 (218) E.L.T. 170 (S.C.) wherein in para 17 while dealing with a communication dated 14-11-2000 issued by the DGHS cancelling the CDEC, the Supreme Court held that the effect of the communication is that the appellant is not entitled to the exemption under any of the clauses of the aforesaid notification on or after 14-11-2000. Similar views were expressed by the Bombay High Court in the case of Bussa Overseas - 1991 (53) E.L.T. 165 (Bom.). Reference was also invited to the decision of the Madras High Court in the case of Apollo Hospital wherein it was held that CDECs cannot be withdrawn after rescission of the notification or for violations subsequent to the rescission of the notification. 8.2 The ld. Jt. CDR Shri B.K. Singh submitted that a certificate issued by DGHS cannot be treated at par with a licence issued by DGFT. The facts in the East India case and others are different as in those cases the conditions for the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench has also held that if the violation of notification is noticed even after rescission of notification, action can be tsken against appellant and benefit of exemption can be denied. A similar view was taken in the case of Down Town Hospital - 2003 (159) E.L.T. 198. 8.3 As regards denial of principles of natural justice it was submitted that since CDECs have been cancelled by DGHS, till the same are restored the customs authorities have no jurisdiction to enquire as to whether the cancellation was validly done or not. The Karnataka High Court has in the case of Medical Relief Society of South Kanara - 1999 (111) E.L.T. 327 (Kar.) has referred to the constitution of Rosha Committee which was formed by Delhi High Court and certificates were ordered to be cancelled and duty required to be demanded in case certificates were incorrectly issued. All this clearly establish that once the certificates are cancelled duty is required to be demanded from the date of clearance. 8.4 We have considered the submission. We find that procurement of a certificate from DGHS is a requirement of the notification and the certificate certifies that the hospitals continue to carry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from patient does not mean that free treatment has not been given. Similar observations were made by the Tribunal in the case of Inlaks Hospital - 2005 (185) E.L.T. 385. 9.2 The ld. DR referred to the decision of the Karnataka High Court in the case of Medical Relief Society of South Kanara in which the scope of the word 'treatment' was explained and in para 14 it states that the word treatment is not confined only to examination or diagnosis as contended by the respondents but includes steps taken to effect a cure for a disease or injury. What is significant is that the expression is wide enough to include the application of remedies to the disease and not just its diagnosis. It would include medicines and therapies considered necessary for cure. In para 30 the court noted that the hospital is admittedly charging registration fee and cost of drugs and materials and it is only consultation which is given free to the patients. In para 37 it further noted that and admission fee of Rs. 25/- was being charged from general ward patients and the rate list published by the institution shows that a registration fee of Rs. 10/- per patient was also being charged from outdo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the High Court observed that the view taken by the Karnataka High Court is the correct one, wherein it was held that the treatment if any given to the persons attending the medical camps cannot be reckoned as treatment granted to the outpatients. 10.3 We have considered the submissions. Since the two High Courts in Maulana Hospital and Medical Relief Society cases have taken a view that treatment provided in free camps cannot be taken into account while calculating the limit of 40% and the decision in Maulana Hospital case has taken note of the Madras High Court decision in Apollo Hospital case, we follow the same and accordingly hold that treatments in free camps cannot be considered while calculating the limit of 40%. As regards Tribunal decision in the case of Assembly of God Hospital which noted the decision of Maulana Hospital, we find that the Tribunal has not interpreted the decision in the Maulana Hospital case but has only remanded the matter to the Commissioner for fresh decision on the ground that the directions contained in the Tribunal's earlier remand order based on the Madras High Court decision in Apollo Hospital case were not carried out as the remand order h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice. The assessment in this case could not have been considered as provisional as the assessment cannot depend upon a contingency which may or may not happen after clearance. However once the assessments have been held as provisional, demand cannot be raised before they are finalized as per Supreme Court decision in the case of Commissioner v. ITC - 2006 (203) E.L.T. 532 (S.C.). He also pleaded, denial of principles of natural justice as the copies of investigation report was not submitted and the person who made the investigation report was not allowed to be cross-examined. The order, therefore, needs to be set aside on this ground for which he referred to the decision of the Bombay High Court in the case Kellog India - 2006 (193) E.L.T. 385. They have submitted an affidavit affirming that they have rendered free service to OPD and indoor patients even for period subsequent to Notification No. 64/88 and the burden of showing that they have failed to treat the requisite number of patients was on the department as has been held in the case of Jaslok Hospital - 2004 (163) E.L.T. 449 and Inlaks Hospital - 2005 (185) E.L.T. 385. Reliance was also placed on Apollo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t duty shall be payable under Sec. 125(2) of the Customs Act only if the appellants exercises their right to redeem the goods on payment of fine and penalty. It was submitted that the matter has been decided by the Bombay High Court in the case of Wockhardt Hospital and Bombay Hospital, that once an order of confiscation with option to redeem is passed under Sec. 125, duty automatically becomes payable. The ld. Advocate for the respondent submitted that the issue has not been properly examined on merits and therefore it should be remanded back. 13.2 We have considered the submissions. We find that the issue is fully covered by the Bombay High Court decision in Wockhardt Hospital and Bombay Hospital cases and accordingly Commissioner (Appeals) observations to this effect are set aside and Revenues appeals are allowed. Since the respondents have not filed any cross-objection they cannot allege that the order has not examined the merits properly and therefore their plea of remand is rejected. 6. Appeal No. C/1193/01 - Sant Tukaram Hospital Medical Research Centre v. CC (I), Mumbai 14.1 On behalf of the appellant it was submitted that the benefit of Notification No. 64/88 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to OPD patients was not less than 40%. In view of the same the exemption has been correctly denied and we accordingly uphold the order of the Commissioner ordering confiscation of goods, demanding duty and imposing penalty and fine. Appeal is accordingly dismissed. 8. Appeal No. C/662/03 - Bombay Hospital v. CC, Mumbai : 16.1 It was submitted that the show cause notice nowhere demands the duty but only propose confiscation under Sec. 111(o). The duty nevertheless has been confirmed by Commissioner without citing any provision under which it has been confirmed and therefore it has resulted in denial of principles of natural justice and accordingly order needs to be set aside on this ground alone. It was further submitted that though they have been charging a token registration fee, they were under bona fide belief that this will not come in way of considering their treatment as not free. It was also admitted that they were charging for medicines but this was also under the impression that free treatment does not mean that medicines are not to be charged for. 16.2 The ld. DR submitted that since they were charging for registration and medicines, the decision of Karnata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oundation v. CC (I), Mumbai : 18.1 On behalf of the appellants, it was contended that the show cause notice issued to them recognizes that the assessments were made provisional and the goods were cleared duty free extending benefit of Notification No. 64/88 on the strength of PD bond with bank guarantee subject to production of CDEC and installation certificate. The show cause notice sought to enhance the value and demand duty by disallowing benefit of Notification No. 64/88 as they have failed to produce the installation certificate, CDEC certificate etc. The order-in-original does not demand duty but only confiscates the goods with an option to redeem the same on payment of Rs. 15,000/-. It was submitted that once the assessments were provisional the goods could not have been confiscated. He therefore requested to remand the matter to the Commissioner with a direction that he should first finalize the assessment and only then the duty can be demanded. The ld. DR does not oppose the prayer. 18.2 Since it is an admitted fact that the assessments were provisional and without finalizing the same, confiscation has been ordered. The matter is therefore remanded back to the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is not applicable. It was admitted that CDEC was withdrawn by DGHS on 22-7-99 which fact is mentioned in the show cause notice itself. It was submitted that the CDEC was issued under category 2 of the table to the notification even though they being a charitable trust qualify under Sr. No. 1 of table to Notification No. 64/88. They however have not applied for change in category nor contested the withdrawal of CDEC till now. The ld. Counsel referred to the decision of the Bombay High Court in the case of VXL India - 2006 (193) E.L.T. 396 (Bom.) wherein it was held that provisions of Sec. 125(2) are not intended to act as a substitute for provisions of Sec. 28, when circumstances prevent resort to that section. This decision has been confirmed by the Supreme Court as reported in 2006 (197) E.L.T. A121 (S.C.). Therefore no duty can be demanded. Interest cannot also be demanded unless they exercise their option to redeem the goods. They referred to the decision of the tribunal in the case of Khabros Steel India - 2006 (194) E.L.T. 117 in which it has been stated that upon confiscation goods belong to the Government and liability to fine and duty arise only if a person who has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicability of the Notification No. 65/88, we remand the matter back to the Commissioner to consider the request for extending benefit of Notification No. 65/88 and extend the benefit if found admissible. 13. Appeal No. C/522/02 - Bhailal Amin Central Hospital v. CC (ACC), Mumbai : 21.1 The ld. Advocate agreed that the benefit of notification no. 64/88 is not available to them as per the Bombay High Court decision and their limited plea is that the benefit of Notification No. 65/88 should be extended to them as the equipments are partly exempted under S.N. C-3 and C-59 of that notification. 21.2 We have considered the submissions. Since the appellants are not disputing the non-availability of exemption under Notification No. 64/88 and their limited pleas is to extend concessional rate of duty under Notification No. 65/88, we remand the matter back to the Commissioner with a direction that he should examine the admissibility of Notification No. 65/88 to the equipments imported by the appellant and to extend the benefit thereof if found admissible. 14. Appeal No. C/153/03 - Pravara Medical Trust v. CC, Mumbai : 22.1 Shri Bharat Raichandani, on behalf of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Sec. 28, the fact remains that the goods have been confiscated with option to redeem and therefore as already held, in view of the Supreme Court decision in the case of Jagdish Cancer, Mediwell and Bombay High Court in the case of Wockhardt, the duty has been rightly demanded and confiscation and fine has been rightly imposed. 22.5 As regards their alternate plea regarding availability of exemption under Notification No. 65/88 the matter is remanded back to the Commissioner with a direction that he should consider the claim of the applicants under Notification No. 65/88 and to extend the same if found admissible. 15. Appeal No. C/279/03 - N.M. Wadia Charitable Hospital v. CC (Import), Mumbai : 23.1 It was submitted by Shri Doiphode, ld. Advocate for the appellant that the show cause notice seeks to demand duty without citing any legal provision under which the duty was demanded and the same has also been confirmed without citing any provision. The CDECs were withdrawn without issuing a show cause notice and therefore such withdrawal cannot be considered as valid. DGHS is not competent authority to look into post-import violation of notification conditions. 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63/88 should be extended to them as they are a charitable trust. 25.2 We uphold the order of the Commissioner on the ground that the appellants have not produced any installation certificate and the condition of free treatment etc. has not been complied and that the CDECs have been withdrawn which order has not been challenged for the reasons mentioned in the earlier part of the order. As regards benefit of Notification No. 63/88 the matter is remanded back to the Commissioner with a direction that he should consider the legibility to Notification No. 63/88 and pass order as per law. 19. Appeal No. C/511/07 - DR. Balbhai Nanavati Hospital v. CC (ACC Import), Mumbai : 20. Appeal No. C/1106/2000 - DR. Balbhai Nanavati Hospital v. CC (Import), Mumbai : 21. Appeal No. C/1107/200 - DR. Balbhai Nanavati Hospital v. CC (Import), Mumbai : 26.1 The ld. Advocate admitted that there were no issues other than the common issues relating to all the petitioners for which they adopt the submissions made by other petitioners. It was admitted that the CDECs were cancelled but they have challenged the same. 26.2 We find that the CDECs have been cancelled and have not been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 219 wherein it was held that merely because the CDECs are still in existence does not mean that the exemption cannot be withdrawn as it is mandatory to satisfy conditions laid down under S. No. 2 of table to notification. 27.3 We have considered the submissions. We find that the conditions of Notification No. 64/88 are not fulfilled as treatment in camps cannot be computed towards limit of 40% free treatment as per Karnataka High Court decision in the case of Medical Relief Society cited supra and also that verifiable records were neither maintained nor produced in spite of the obligation to maintain the records during the full life period of the equipments as held in Lady Amphthil Nurses Institution case. As regards valuation since the duty is being demanded under provisions of Section 125(2), the limitation under Section 28 does not come into play. In view of this the Commissioner's order is upheld. 27.4 As regards availability of exemption under Notification No. 65/88 and auxiliary duty etc. the matter is remanded back to the Commissioner to examine the eligibility to the notification and to pass suitable orders thereon as per law. 23. Appeal No. C/676/02 - Poona Hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were a charitable institution and were entitled to exemption under S. No. 1 of table to Notification No. 64/88. It was further submitted that the Commissioner has extended the benefit of Notification No. 208/81-Cus., dated 22-9-81 in respect of ventilator but has still confiscated the goods for violation of conditions of Notification No. 64/88 which is incorrect and therefore the redemption fine should be brought below Rs. 50,000/-. 29.2 The ld. DR submitted that the validity of the show cause notice has been upheld by the Madhya Pradesh High Court as observed in para 17 of Commissioner's order. Benefit of Notification No. 64/88 has rightly been denied and order required no interference. 29.3 We have considered the submissions. Since the conditions of the notification have been violated and the CDECs have been withdrawn, the duty has been rightly demanded and fine and penalties have been correctly imposed. As regards confiscation of incubator, it is correct that the goods valued at Rs. 4,86,082/- have been confiscated including value of ventilator amounting to Rs. 2,79,893/-. We, therefore, reduce the redemption fine from Rs. 50,000/- to Rs. 25,000/- only. But for this the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision in the case of Bharat Diagnostic - 2007 (207) E.L.T. 113 has been referred by the Supreme Court to the Larger Bench and therefore the decision on the issue should be kept in abeyance till the decision of the court. Benefit of notification no. 65/88 was also claimed in alternative. 30.4 The ld. DR submits that it is an admitted fact that free treatment was not given in the year 1999 and since the obligations are continued they were required to be given in the year 1999 also. The treatment given in the free camps cannot be taken into consideration as held by the Kerala High Court in Maulana and Karnataka High Court in Medical Relief case. Even though the withdrawal of the certificate has been challenged the fact remains that as on today there is no certificate which is one of the conditions of the notification. 30.5 We have considered the submissions. We find that all the pleas taken by the appellants are considered in our findings on the common issues and for the reasoning given therein we uphold the decision as firstly the records were required to be maintained till the life period of the equipment as per Larger Bench decision in the case of Lady Amphthil Nurses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Notification No. 63/88 to the appellants and to allow the same if found admissible. In case they are found to be ineligible a speaking order should be issued to this effect after communicating to the assessee the reasons for denial and after affording an opportunity of hearing to them. 27. Appeal No. C/455/02 - Sheth P.T. General Hospital v. CC (Air Cargo), Mumbai : 32.1 Shri Sanklecha, ld. Advocate admitted that the CDECs have been withdrawn by DGHS which order has not been challenged. In this case also the show cause notice did not specifically demanded duty though it was quantified indicating the extent of loss to Revenue. The duty was demanded without citing any notification. He reiterated the submissions made in relation to common issues. Alternatively benefit under Notification No. 65/88 and auxiliary duty was claimed. 32.2 We have considered the submissions. We uphold the order of the Commissioner as the pleas raised are involving common issues on which we have already given our findings. 32.3 As regards extending benefit of Notification No. 65/88 and auxiliary duty the matter is remanded back to the Commissioner to consider the eligibility of exemption u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision is called in question. No one can dispute that in our judicial system it is open to a court of superior jurisdiction or strength before which a decision of a Bench of lower strength is cited as an authority, to overrule it. This overruling would not operate to upset the binding nature of the decision on the parties to an earlier lis, for whom the principle of res judicata would continue to operate." In view of this it was submitted that the decision in Wockhardt case would not affect them as in the very same facts the decision in their own case is binding on Revenue once it is not challenged. It was submitted that breach of obligations have been cited in the show cause notice only for the post-rescission period and not earlier to that. The breaches are that they have charged registration fee of Rs. 50/- from OPD patients as was also mentioned in their internal circular 24-7-99 and from the bill fodders (sic) relating to the year 1995 recovered from them. He submitted some records showing that free treatment was given in respect of the patients who could not afford the same. It was submitted that registration charges were not recovered from patients in casuality except f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case has held that even where there is no demand of duty in the show cause notice, duty becomes payable as soon as an order of confiscation with option to redeem the same is passed under Sec. 125 of the Customs Act, 1962, confirmation of demand cannot be assailed on grounds of denial of principles of natural justice. As regards violation of conditions of notification, once the CDEC certificates have been withdrawn the effect of the same as already held, is that the exemption becomes in admissible ab initio. However, we find that in the appellant's own case which is subject matter of dispute before us, the Bombay High Court has held that duty can be demanded only if upon confiscation of goods, option to redeem is exercised. Since the Revenue has not challenged this decision, the same has to be considered as final between the two parties. i.e. Harkishan Das Hospital and the UOI though it may not bind others. In view of the same we hold that if the appellants have chosen not to exercise their option duty cannot be demanded. 29. Appeal No. C/814/2000 C/815/2000 - Sarvajanik Medical Trust M. Siddiqui Moesa Alnla v. CC (ACC), Mumbai : 34.1 The ld. Advocate for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only allegations in show cause notice with regard to non-fulfilment of conditions of Notification No. 64/88 are that they were charging a nominal fee of Rs. 10/- on pretext of maintaining medical records and secondly they have not kept any beds reserved for the purpose of treating indoor patients whose monthly income is less than Rs. 500/- p.m. and that they have not kept any separate record of free treatment of these patients. It was contended that the show cause notice nowhere alleges that they have failed to provide free treatment up to 40% of the OPD patients and the Commissioner's finding on the same is therefore beyond the purview of the show cause notice and therefore cannot be sustained. It was submitted that as per the practice prevalent in the hospital if any OPD patient approaches them for free treatment, a nominal fee of Rs. 10/- is charged as registration fee which up to 1993 was Rs. 1/- only and in 1994 it was enhanced to Rs. 3/- and after 1994 it was further enhanced to Rs. 10/-. After registration the patient is seen by the doctor, wherein no consultation fee is charged and if any investigation is required like x-ray, pathological tests then the patient has to appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended to them. 35.6 The ld. DR contented that once it is admitted that the CDECs were withdrawn in the year 2000, the cancellation will have effect from the date of clearance irrespective of the fact whether the same was withdrawn before or after issue of show cause notice or order-in-original and in support thereof he referred to the decision of the Karnataka High Court in the case of Chaparral Health Services - 2001 (130) E.L.T. 34 (Kar.) (paras 6, 7 and 8). As regards charging registration fee he referred to the decision of Medical Relief Society case and Kerala High Court decision in Maulana Hospital wherein it has been observed that treatment starts with registration and therefore charging of registration fee will amount to violation of notification. He also referred to the Tribunal decision in Bai Jerbai Wadia Hospital for Children - 2005 (188) E.L.T. 306 (T) where charging of registration fee at the rate of Rs. 10/- from outdoor patient and Rs. 20/- from indoor patients was held as amounting to violation of conditions of Notification No. 64/88. As regards reservation of beds it was submitted that it was mandatory that 10% beds are specifically reserved as has been held b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 15%. Consultation fees was also being charged. As per the bed summary the percentage of free treatment to poor patients was 5% only as against 10%. The order-in-original also observed that CDECs were withdrawn. 36.2 Ld. Advocate submits that the Commissioner has in his order-in-original accepted the Apollo's decision that violations of conditions after rescission of notification in 1994 cannot be looked into but as the hospital expressed its inability to produce records prior to 1994 the same could not be verified. It was submitted that in view of the same the post-rescission violations cannot be looked into. As regards pre-rescission, it was their submission that they were never called upon to submit the particulars and in fact they have submitted statements from the records maintained during the period 1988-97 as per para 13 of their letter dated 14-8-2001 in reply to the show cause notice issued to them. Alternatively benefit of Notification No. 65/88 was claimed in respect of some equipment, the list of which was handed over. 36.3 The ld. DR submitted that CDECs were withdrawn on 17-3-2003 and this was not challenged by them. The fact that free treatment given to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
