2005 (9) TMI 452 - AT - Customs

Summary

Issues:
1. Imposition of penalty under Section 112 of the Customs Act on the party for rendering imported goods liable for confiscation.

Detailed Analysis:

Issue 1: Imposition of penalty under Section 112 of the Customs Act on the party for rendering imported goods liable for confiscation

The appeal filed by the department was against an order of the Commissioner of Customs where the respondents had imported a "Whole Body CT Scanner" and the Commissioner confiscated it with an option for redemption upon payment of a fine. The Commissioner refrained from imposing any penalty on the party due to the circumstances and the fact that the party provided some free treatment to patients. The Tribunal, in a previous final order, upheld the confiscation and redemption fine. The present appeal by the Revenue was against the non-imposition of a penalty by the Commissioner.

During the hearing, the Revenue argued that the party should have been penalized under Section 112 of the Customs Act as they rendered the goods liable for confiscation through their post-importation conduct. The grounds for not imposing a penalty were not adequately explained in the impugned order. The party providing free treatment to patients was deemed insufficient to exempt them from penal liability. On the other hand, the respondents' counsel defended the Commissioner's decision regarding the penalty.

After considering the submissions, the Tribunal found that the respondents breached the post-importation conditions of Notification 64/88-Cus. related to the CT Scanner, leading to the withdrawal of the Customs Duty Exemption Certificate by the DGHS. The Commissioner determined that the institution using the machine was a diagnostic center, not a hospital as required by the Notification. These findings were upheld in the previous final order. The Tribunal concluded that the respondents' conduct rendered the goods liable for confiscation, and a penalty should have been imposed under Section 112. Therefore, a penalty of Rs. 1,00,000 was imposed on the respondents, considering the circumstances of the case.

In conclusion, the Tribunal allowed the Revenue's appeal and imposed a penalty on the party for breaching the post-importation conditions and rendering the imported goods liable for confiscation under Section 111 of the Customs Act.

(Operative part of the order was pronounced in open Court on 26-9-2005)