9911796707
TMI Blog2004 (12) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... condition of free treatment of the poor patient to the extent of 40% as envisaged in the said Notification. 2. Shri S.K. Bagaria, ld. Advocate appearing for the appellants submits that the appellant is Charitable Society duly registered under the West Bengal Societies Registration Act, 1961. The C.T. Scanner and its spares were imported by the appellants during the years 1989 to 1992 and assessments were originally provisional. However, the provisional assessments were subsequently finalised. After a prolonged use for a period of 7 years, as the said CT Scanner had out-lived its utility and since technological advancements had also taken place in the meantime, bringing in the latest model which was highly sophisticated and advanced, the appellant decided to discard the said old CT Scanner and donate it to another hospital of a Charitable Society. 3. He submits that the proceedings were initiated against the appellants on the ground that as they had failed to fulfil the condition of Notification 64/88-Cus under which the goods were imported, the same are liable to confiscation and the appellants are liable to pay duty. He submits that though the continuous obligation placed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order on merits but submits that their duty liability would arise only when they choose to exercise their option to redeem the same, which stands confiscated by the order of the Commissioner. For the above proposition, they rely on the Tribunal's decision in the case of M/s. Indsu v. Commissioner of Customs reported in 1998 (100) E.L.T. 385. Para 2 of the said decision reads as under :- "2. We are unable to see how the liability to duty arises if the goods have been ordered to be confiscated and they were not redeemed after such confiscation. Liability to duty of goods confiscated would be governed by the provision of Section 125. Sub-Section (2) of this section makes it clear that where any fine in lieu of confiscation of goods is imposed the owner of such goods shall, in addition, be liable to pay duty and other charges. The logical corollary should be that if the goods are not redeemed, the liability to duty payment of duty will not arise. On confiscation the goods become the property of the Central Government. A notification issued under Section 25 of the Act cannot take precedence over the provision of this Section. Duty is therefore not leviable." 7. We find that the dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and not at the original import value of the same. We find that the Tribunal in the above referred case of M/s. Diascans (India) Ltd. has held as under :- "13. As far as the duty demand is concerned, in the absence of any specific provision under the Notification for demand of duty in such cases on depreciated value, we order that the duty be re-calculated allowing abatement on account of depreciation in value of the impugned scanner. We also order that the duty on RF Shield should also be re-calculated on its depreciated value." Following the ratio of the above decision, we direct the Revenue Authorities to re-quantify the duty demand on the depreciated value of the goods in question. 9. In the instant case, we see no reason to reduce the quantum of redemption fine or of penalty inasmuch as the Commissioner has already taken into account the fact that the subject goods have become old and their value has considerably fallen and as such he has fixed the fine and penalty on the lower side. No further interference is called for by the Tribunal. 10. Appeal is disposed of in the above terms. Sd./- (Archana Wadhwa) Member (Judicial) Dated 10-7-2003 11. [Contra pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be no time limit to be counted from the date of clearance of the hospital equipment, as held by the Hon'ble High Court of Karnataka in the case of Medical Relief Society of South Kanara as reported in 1999 (111) E.L.T. 327 (Kar.) wherein it was held as under : "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." 13. In the instant case CT scanner imported by the appellants was confiscated and a duty of Rs. 65,06,775/- under Section 17(2) of the Customs Act, 1962 read with Section 125(2) thereto was demanded with an option to redeem the same on payment of redemption fine of Rs. 5,00,000/- in terms of Section 125(1) of the Act. The appellants were also imposed with a penalty of Rs. 200,000/- under Section 112(a) of the Act. The appellants have fairly conceded that they have not fulfilled the terms of the Notification as they are not in a position to substantiate their contention that the continuous obligation cast on them have been fulfilled by them. However, they do not challenge the durability and confiscability of the goods in question, but their argument is that: (a) &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er : "Any goods exempted subject to any condition from duty or any prohibition in respect of the import thereof under this Act or any other act or any other law for the time being in force in respect of which condition is not observed unless non-observance of the condition was sanctioned by the proper officer such goods brought from a place outside India shall be liable to confiscation." The Hon'ble High Court of Karnataka in the case of Medical Relief Society of South Kanara v. UOI reported in 1999 (111) E.L.T. 327 (Kar.) as relied upon by the Larger Bench in Para 59 of their order has held that : "a plain reading of the provisions of Section 111(o) (supra) would show that the goods which are exempted from payment of duty subject to any condition are liable to be confiscated in case the conditions subject to which the same are exempted from duty are not satisfied unless non-observance there is sanctioned by proper officer. It was also further held by the Hon'ble High Court that failure to discharge that obligation was liable to expose the equipment to confiscation besides entitling this respondents to recover duty". 16. Neither the provisions of the Customs Act, nor the Notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en confiscated and if the appellants do not want to exercise the option of redemption of the goods, no duty can be demanded from the importer-appellants. While the appellants are liable to penalty for breach of the conditions of the Notification, I agree with the view taken by the learned Member (J) that so far as the quantum of penalty is concerned, the same is already on the lower side and no reduction is called for. In the result, the appeal is disposed of in the following terms : (a) Liability to duty on the goods arises on the full c.i.f. value at the time of importation and not on depreciated value. (b) Liability to duty arises only if the appellants-importers want to exercise the option to redeem the goods on payment of redemption fine. (c) Penalty confirmed under the impugned order is sustained. Ordered accordingly. Sd./- (Jeet Ram Kait) Member (T) Dated 2-9-2003 POINTS OF DIFFERENCE Whether in the facts and circumstances of the case, duty to be demanded on the imported goods is on the depreciated value, as held by Member (Judicial) for the reasons recorded in her order OR Whether in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and exercise of option would be the relevant one and not the original import value as held by the ld. Member (Judicial). 21. In reply, Shri T.K. Kar, ld. SDR for the Revenue, supports the views expressed by the ld. Member (Technical). 22. The basic question involved in this appeal is whether in the facts and circumstances of the case, duty to be demanded on the imported goods is on the depreciated value, as held by Member (Judicial) or duty is demandable on the full CIF value at the time of importation and not at the depreciated value, as held by Member (Technical). 23. To determine the above question, it is to be seen what is the nature of the licence. The licence is merely in leave to do a thing which enables licencee to do lawfully what he could not otherwise do except unlawfully. Licence is a contract. It is held in the case of R.M. ARAR. RM, AR, Arunachalam Chetiar v. Union of India reported in 1972 (2) MLJ 439-442 that "the licence, being one and indivisible, is granted for a particular thing envisaged under statute or contract, the benefit of licence therein is not severable simply because it is granted to more than one individual." In the present case, one of the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s authorities, therefore, have clearly taken an action under the provisions of Section 111(o). In the present case, the importers-appellants, have not fulfilled the conditions laid down in the Customs Notification No. 64/88-Cus., dated 1-3-88. When the appellants have failed to fulfil the condition of Notification, they have become an ordinary importer and required to pay duty as applicable at the relevant time. In the terms of Section 17 of the Customs Act, after importation of the goods, the goods shall be examined and tested by the proper officer and the duty if any, leviable on such goods shall be assessed. It is, therefore, clear that the duty is always relevant with the date of importation and not on a later date. In the present case, the obligation of the appellants was a continuous one and violation of any of the condition will render them liable for Customs duty for the imported articles. Now, what will be the rate of duty. I also observe that the Hon'ble Supreme Court in the case of Collector of Customs, Rajkot v. Sarabhai International Ltd. reported in 2000 (119) E.L.T. 6 (S.C) has held as under : 'The obligation of the respondents must be determined solely upon the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
