Down Town Hospital Ltd. Vs. Commissioner of Cus. (Airport) - Court Judgment

Excerpt:
1. vide the impugned order commissioner of customs has confiscated the clinical impedance audio-meter and dual channel evoked potential system imported by the appellant free of duty in terms of notification no.64/88-cus., dated 1-3-88 with an option to them to get the goods redeemed on payment of redemption fine of rs. 2,50,000/- (rupees two lakh fifty thousand). in addition penalty of rs. 50,000/- (rupees fifty thousand) has been imposed under the provisions of section 112(a) of the customs act. the amount of duty of rs. 9,12,329/-(rupees nine lakh twelve thousand three hundred twenty nine) has also been confirmed.2. as per the facts on record, the said goods were imported by the appellant free of duty in terms of the notification no. 64/88-cus.against customs duty exemption.....

Judgment:
1. Vide the impugned order Commissioner of Customs has confiscated the clinical impedance audio-meter and dual channel evoked potential system imported by the appellant free of duty in terms of Notification No.64/88-Cus., dated 1-3-88 with an option to them to get the goods redeemed on payment of redemption fine of Rs. 2,50,000/- (rupees two lakh fifty thousand). In addition penalty of Rs. 50,000/- (rupees fifty thousand) has been imposed under the provisions of Section 112(A) of the Customs Act. The amount of duty of Rs. 9,12,329/-(rupees nine lakh twelve thousand three hundred twenty nine) has also been confirmed.

2. As per the facts on record, the said goods were imported by the appellant free of duty in terms of the Notification No. 64/88-Cus.

against customs duty exemption certificates dated 10-9-90 issued by the Directorate General of Health Services (DGHS), New Delhi. The appellants were issued a show cause notice 10-3-2000 alleging that they were not fulfilling the post-importation conditions for providing free OPD treatment to 40% of its outdoor or free indoor treatment to all its patients whose family income is less than Rs. 500/- (rupees five hundred). After the issuance of the show cause notice the revenue also received communication from DGHS to the effect that the customs duty exemption certificates issued to the appellants have been withdrawn on the basis of the findings of central enquiry team, who inspected their records on various dates. On receipt of such a communication, a corrigendum to the show cause notice was issued to the appellant forwarding therewith the above communication of DGHS.3. During adjudication before the Commissioner, the appellants did not challenge the allegations, but submitted that their records have been seized by the income tax department and they are not in a position to rebut the allegations. The Commissioner, however, has not accepted the above defence of the appellant and has passed the impugned order.

4. After hearing Shri S.K. Roychowdhury, ld. advocate for the appellant and Shri A.K. Mondal, ld. JDR for the Revenue we find that the DGHS decision to cancel the customs duty exemption certificate is based on the following findings of the central enquiry team :- (b) The equipments imported under the CDECs were found to be installed.

(c) The hospital has no provision for free services in the 'out patient department'. No patients were registered unless fee was paid. The consultants in the hospital charge their own fee, which was not recorded in the hospital records. No patient received free medicines. The figures produced by the hospital as 'free OPD cases' were not verifiable.

(d) Among 'laboratory tests', 'Imaging Services' and special procedures, free cases have been found in negligible number.

(e) There were no designated free beds and no patients were being treated free at the time of visit. The records did not show even a single patient treated totally free in all the years since 1991 for which records were available. The number of free cases quoted by the hospital among indoor patients referred to discounts varying from 10% to 50% given from room charges etc. Patients were not admitted unless they paid the advance deposit. No medicines were issued to any patients without payment.

5. The appellants' contention is that the above findings are not correct and hence should not be accepted. However, we are of the view that we are not in a position to set aside the findings of the DGHS authority. The appellants have clarified that the said findings have not been challenged by them before the higher appellate forum available to them under the law. We also note that apart from stating that the said findings of the DGHS authority are not correct, the appellant has not produced any evidence on record to rebut the same. As such we are of the view that we are bound by the findings of the central enquiry committee of DGHS, who have withdrawn the customs duty exemption certificate granted to the appellant. We also note that the Hon'ble Supreme Court in the case of CC (Import), Mumbai v. Jagdish Cancer and Research Centre, reported in 2001 (132) E.L.T. 257 (SC) has held that the importers, who have claimed the benefit of Notfn. No. 64/88 are under a continuous liability to fulfill the conditions of the notification and if the same are contravened at any point of time, the importers have to pay the duty under the provisions of Section 125 and the goods are also liable to confiscation. In these circumstances we find no justification to interfere in the order passed by the adjudicating authority. The appeal is accordingly rejected.