Full Judgment
3. The learned Counsel for the appellants would rely upon the ratio of this Tribunal's order in Surlux Diagnostics Ltd., v. Collector of Customs, Bombay "since DGHS itself has taken a view that diagnostic center need not have the beds but they are entitled for Notification No. 64/88, condition under para 2 of the said notification is not operational".
According to him the word "and" used therein should be read as "or" and the situation calls out for such an amendment/interpretation.
3.1. Further the learned Counsel for the appellant argued that in their case both customs as well as Special Secretary of the State Government had examined the issue after conducting necessary investigation and examining the records maintained by them and both of them had given them clean chit upto 1999 and hence the appellants cannot to said to have violated any of the conditions under the said notification now.
3.2. The learned Counsel would also rely upon a judgment in Hindustan Lever Limited and Anr. v. Union of India and Ors. passed by the Hon'ble Bombay High Court. This judgment which examined the Government promise by way of allowing duty free import required for the manufacture of export goods, held that it was a settled principle of equity and law that where public authorities make express and equivalent promise or representation, they are bound to carry out their representation/promise. It was argued that once the Government give a promise to work upon, they cannot go back or withdraw from the same as was done in the appellant's case.
4. For the learned authorized representative (DR) for the department the issue stands lit up in the following judgments of the Apex Court:Mediwell Hospital and Health Care Pvt. Ltd., v. Union of India "Para 13. It is needless to reiterate that all the persons including the appellant who had the benefit of importing the hospital equipment with exemption of customs duty under the notification should notify in the local newspaper every month the total number of patients they have treated and the 40% of them are the indigent persons below stipulated income of Rs. 500/- per month with full particulars and address thereof which would ensure that the application to treat 40% of the patients free of cost would continuously be fulfilled. In the event of default, there should be coercive official action to perform their obligation undertaken by all such persons. This condition becomes a part of the exemption order application and strictly be enforced by all concerned including the Police personnels when complaints of non-compliance were made by the indigent persons, on denial of such treatment in the concerned hospital or diagnostic centers, as the case may be.Commissioner of Customs (Import), Mumbai v. Jagdish Cancer & Research Centre outdoor patients should be provided free treatment and that at least 40% or may be above.Commissioner of Customs, New Delhi v. C.T. Scan Research Centre (P) Ltd. reported in 203 (155) ELT 3 (S.C.) Provisions of Section 28(1) of Customs Act, 1962 were not attracted because the said section covers cases of duty not levied, short levied or erroneously refunded etc. The proposition was that in the subject case, Section 28 has no application because the exemption notification contemplates continual obligation on the part of the appellantsHissar Medical Diagnostic & Hospitals Ltd., v. CC, New Delhi Tribunal had an occasion to hold that the failure to fulfill the criteria of giving free treatment to 40 per cent of the outdoor patients and 10 per cent of the indoor patients would amount to violation of post importation condition as contained in Notification No. 64/88-Cus.
4.2 The learned authorized representative (DR) for the department also submits that whatever data provided by the appellants have been relied upon by the Directorate General of Health Services and also by the Department. He referred to para 9 and 10 of the reply dated 18.8.2004 filed by the appellants to the show cause notice which contains year wise percentage of free patient treated taking into account OPD/free OPD and total figures. Here we find that the appellant had shown less than 40% free treatment for the years 1992, 1994, 1995, 1996, 1998 and 1999.
5. Having heard both sides and having soldiered on the copious record, it is clear that during the period the appellants barring three years, have not fulfilled one of the three conditions stipulated under the exemption notification as they had not given free treatment to at least 40 per cent of outdoor patients. We find that the appellant itself has admitted in para 10 of its reply that in six out of nine years during the relevant period of 1991-1999 free treatments given comes to less than 40 per cent. In this context, the guidelines of the Hon'ble Supreme Court judgment in Commissioner of Customs (Import), Mumbai v.Jagdish Cancer & Research Centre (supra) discussed above are of immense relevance. According to this judgment, at least 40 per cent of all outdoor patients should be provided free treatment in order to be eligible for the said exemption. The Apex Court in Mediwell Hospital & Health Care Pvt. Ltd., (supra) has also laid down similar guidelines.
According to these guidelines, those who have availed the said notification should ensure that the treatment of 40 per cent of the patient free of cost would continuously be fulfilled. It has further contemplated in the event of default, there should be coercive official action to perform this obligation undertaken by all such persons. In no unclear terms, the Court has directed that adherence to this condition should strictly be enforced by all concerned including the Police personnels when complaints of non-compliance were made.
5.1. In view of the clear guidelines available from the Apex Court on the matter, we hardly find any force in the various contentions made before us. Suggestion for modification of the notification by the word "and" occurring under para 2 being substituted by word "or" as contended before us, in our opinion, would be a futile exercise without any rhyme or reason.
5.2. We are not impressed with the argument that as both customs officers and Special Secretary of the State Government have given a clean chit for the appellant, no action could be contemplated now. With such clear guidelines from the Apex Court and with overwhelming evidence against the appellants which include the facts on record that the appellants themselves have prepared and presented the relevant data, based on which the demand has been raised in the show cause notice cannot be winked at. A plain reading of para 2 of notification makes it clear that all the terms and conditions there under were to be complied with in order to make an importer eligible for duty free concession. The show cause notice was issued only in that case for non-compliance of the condition of free treatment to 40 per cent of total outdoor patients and the reply was also confined to that allegation. We, therefore, do not find any necessity to go into the question of compliance or non-compliance of the remaining conditions under para 2 overlooking the issue raised before us, as stands answered in the foregoing paragraphs. It is clear that violation of any one of the condition would disentitle the appellant to the benefit of exemption under the said notification.
6. In view of the above reasoning, we do not find any warrant to interfere with the impugned order on any of the grounds raised on behalf of the appellant. Even the contention of promise prayed before us has no merit because there cannot be any such equity estopel against the provisions of a statutory notification.
7. In this context we also find that the exemption offered under notification does not stand withdrawn; only the appellant has been made ineligible due to non-fulfillment of the condition as discussed in the foregoing paragraphs.