2003 (1) TMI 603 - AT - Customs

Summary

Issues:
1. Interpretation of exemption Notification No. 64/88-Cus.
2. Validity of DGHS certificate in relation to duty payment.
3. Non-profit status and charitable activities of the appellants.
4. Consideration of Karnataka High Court decision.
5. Compliance with conditions of duty-free import.

Interpretation of exemption Notification No. 64/88-Cus.:
The appellants, a Charitable Trust, contested that their case was wrongly equated with other importers under Rosha Committee recommendations despite fulfilling conditions of Notification No. 64/88-Cus. They argued that their non-profit status was evident from filed income tax returns and reserved beds for low-income patients. The Commissioner was criticized for not considering these aspects.

Validity of DGHS certificate in relation to duty payment:
The appellants relied on a Karnataka High Court ruling stating that duty cannot be demanded or goods seized unless the DGHS certificate is canceled post an inquiry. They emphasized that the Commissioner overlooked documents and selectively used a Customs Act statement, which actually confirmed compliance with Notification conditions.

Non-profit status and charitable activities of the appellants:
The appellants asserted their non-profit status and charitable endeavors, providing free treatment to a significant number of patients. They aimed to differentiate their case from misuse instances of duty-free medical equipment, urging a fair assessment based on their genuine intentions.

Consideration of Karnataka High Court decision:
The Revenue representative contended that duty payment was necessary as the appellants allegedly failed to prove compliance with Notification conditions, citing Supreme Court precedents. The Commissioner was supported for issuing the impugned order based on the appellants' purported inability to treat a specific percentage of patients free of charge post-duty-free import.

Compliance with conditions of duty-free import:
Upon review, the Appellate Tribunal noted the Commissioner's oversight of the Karnataka High Court ruling, the appellants' non-profit status, and their charitable activities. Consequently, the Tribunal deemed the appellants deserving of a more sympathetic consideration, directing a re-examination by the Commissioner to allow the appellants a chance to demonstrate fulfillment of obligations under the exemption Notification. The appeal was allowed for remand.