2003 (3) TMI 573 - AT - Customs

Summary

Issues:
1. Waiver of deposit of duty and penalty under Section 112(a) of the Act.
2. Compliance with conditions of exemption under Notification 64/88.
3. Specificity of demand for duty in the notice issued.

Analysis:

1. The appeal pertains to the waiver of a deposit of Rs. 5.16 lakhs and penalty under Section 112(a) of the Act amounting to Rs. 50,000. The Commissioner demanded duty on medical equipment imported by the appellant, claiming exemption under Notification 64/88. The appellant argues that the notice did not specifically demand duty, citing the Supreme Court judgment in Metal Forgings v. UOI. However, the departmental representative asserts that the intention to pay duty is evident from the notice, alleging fraudulent activities by the appellant.

2. The conditions of the exemption under Notification 64/88, related to the specified number of free treatments for inpatients and outpatients, were at the crux of the dispute. The notice accused the appellant of willfully suppressing facts regarding non-compliance with these conditions. It proposed confiscation of the medical equipment, penalties under Section 112(a), and involvement of the Director General of Health Services in aiding customs duty evasion. The Tribunal found the allegations insufficient to support a duty demand, noting the absence of a specific request for duty payment in the notice.

3. The Tribunal analyzed a previous order by another bench, which relied on the Supreme Court's judgment in Mediwell Hospital and Healthcare Pvt. Ltd. The Supreme Court emphasized the need for specific notice for duty payment in cases of non-compliance with exemption conditions. The Tribunal concluded that the notice in question lacked clarity in demanding duty, thus waiving the deposit and staying the recovery of duty and penalty. The judgment highlighted the necessity of adhering to legal provisions and issuing explicit notices for duty payment to ensure procedural fairness and compliance with the law.