2003 (8) TMI 390 - AT - Customs

Summary

Issues:
1. Import of medical equipment under duty exemption.
2. Failure to produce necessary certificates.
3. Violation of post-importation conditions.
4. Confiscation of goods and imposition of penalty.

Analysis:

1. Import of Medical Equipment under Duty Exemption:
The appellants imported medical equipment and cleared them duty-free under Notification No. 64/88-Cus based on a Customs Duty Exemption Certificate (CDEC) from the Director General of Health Services. However, they failed to produce the required Installation Certificate as per the notification.

2. Failure to Produce Necessary Certificates:
The exemption certificate was later withdrawn by the DGHS due to the importer's violation of conditions. The Commissioner of Customs found that the importer did not fulfill the condition of providing free treatment to outdoor patients and indigent inpatients as required by the notification. The non-production of the Installation Certificate further indicated a breach of crucial conditions under the notification.

3. Violation of Post-Importation Conditions:
The DGHS reported that the importer had only provided free treatment to outdoor patients ranging from 6% to 8% instead of the mandated 40%. Additionally, not all indigent inpatients with family income below Rs. 500 per month received free treatment. These findings formed the basis for the Commissioner's decision to confiscate the goods under Section 111(o) of the Customs Act and impose a penalty of Rs. 10 lakhs under Section 112(a).

4. Confiscation of Goods and Imposition of Penalty:
The Tribunal upheld the Commissioner's order, stating that the grounds for confiscation were strong as the importer had violated crucial conditions for duty exemption. The failure to produce the necessary certificates and the non-compliance with post-importation conditions justified the confiscation of goods and imposition of the penalty. The Tribunal dismissed the appeal, affirming the Commissioner's decision on confiscation and penalty.

In conclusion, the Tribunal found the importer liable for confiscation of goods and imposition of a penalty due to the violation of post-importation conditions and failure to produce necessary certificates as required by the duty exemption notification.