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Issues:
Waiver of pre-deposit of penalty imposed on a charitable hospital for contravening conditions of Notification 64/88-Cus., dated 01-03-1988 regarding providing free medical treatment to patients. Analysis: The judgment concerns an application for waiver of pre-deposit of penalty of Rs. 50,000 imposed on a charitable hospital by the Commissioner of Customs (Import), Mumbai. The penalty was imposed for contravening conditions set out in clauses 2(a) and 2(b) of Notification 64/88-Cus., dated 01-03-1988. Clause 2(a) mandates providing free treatment to outdoor patients and clause 2(b) requires free treatment to indoor patients from families with income below Rs. 500/month. The hospital was charged with not maintaining income registers, but the show cause notice acknowledged that the hospital exceeded the 10% bed reservation for free indoor patients as required by the notification. The applicants argued that the show cause notice did not allege contravention of clause 2(a) and clarified that no registration fee was collected from incapable patients, thus complying with clause 2(a). They contended that they provided free treatment to indoor patients from families with income below Rs. 500/month, supported by the Assistant General Manager's statement. The lack of income records was not a valid ground for non-fulfillment of clause 2(b) as the notification did not mandate specific record-keeping. The Departmental Representative opposed the waiver, citing alleged contraventions of the conditions. However, the Tribunal found that the show cause notice did not specifically allege a breach of clause 2(a), and the hospital's claim of not collecting registration fees from needy patients was not disproven. The absence of income records for indoor patients did not automatically imply non-compliance with clause 2(b), especially when record-keeping requirements were not specified in the notification. Consequently, the Tribunal concluded that a strong prima facie case for waiver existed, and thus granted the waiver of pre-deposit of the penalty and stayed its recovery pending the appeal.
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