2014 (11) TMI 738 - AT - Customs

Confiscation of goods - Redemption fine and penalty - import of medical equipment claiming the benefit of Notification 64/88-Cus dated 01/03/1998 - Held that - As per the records produced by the appellant before the investigating authority, the total number of OPD patients given free treatment amounted to 2.2%, 5.57% and 2.64% for the years 1997, 1998 and 199 respectively. Similarly, the number of in-patients given free treatment having income below ₹ 500/- were 1.2%, 0.36% and 0.81% for the above mentioned years. This position has been admitted by Dr. Y.C. Mahajan, Hospital Administrator in his confessional statement recorded on 13/12/1999. Therefore, it is clear that the appellant has not fulfilled the post-importation conditions of giving free treatment to 40% of the OPD patients and 10% of the IPD patients. As regards the reliance placed on a letter dated 16/02/2000 wherein the appellant has claimed to have furnished details of the OPD patients treated freely, we have perused an unsigned copy of the said letter. The said letter also gives certain details of the patient categories who have been given free treatment. However, there is no mention in the said letter as to from where this data have been obtained and what is the basis for these data and therefore, this claim of the appellant is only a mere averment without any basis or supporting evidence. Whereas, as per the records maintained by the appellant in the hospital, which was produced before the investigating authority, it was found that the appellant had not fulfilled the terms and conditions of the Notification 64/88-Cus. Notification 64/88 imposes a continuing obligation on the importer with regard to provisions of free medical treatment, as held by the hon ble apex Court in the case of Jagdish Cancer & Research Centre 2001 (8) TMI 113 - SUPREME COURT OF INDIA , the question of time-bar will not arise. In the present case, the imported goods were confiscated under Section 111(o) of the Customs Act, 1962 and allowed to be redeemed. The order for payment of duty under Section 125(2) would be an integral part of the proceedings relating to confiscation and consequential orders thereon, on the ground that the importer had violated the conditions of notification subject to which the exemption on goods was granted. adjudicating authority has very fairly considered applicability of Notification 65/88-Cus and extended the benefit of the same. We also note that the redemption fine and penalties imposed on the appellant are very reasonable - Decided against assessee.

Summary

Issues:
- Customs duty demand confirmation
- Goods confiscation and redemption fine
- Penalty imposition
- Compliance with post-importation conditions
- Benefit of Notification 64/88-Cus
- Applicability of Notification 65/88-Cus
- Time-bar for duty demand
- Treatment in medical camps as OPD patients

Customs Duty Demand Confirmation:
The appeal challenged the Order-in-Original confirming a customs duty demand of Rs. 95,92,213 on the appellant, along with goods confiscation valued at Rs. 1,07,71,002 and a redemption fine of Rs. 1 lakh, as well as a penalty of Rs. 25,000. The appellant contended fulfilling the conditions of free treatment but failed to provide substantial evidence to support the claim. The Tribunal noted the appellant's failure to meet the post-importation conditions and upheld the duty demand.

Compliance with Post-Importation Conditions:
The appellant imported medical equipment under Notification 64/88-Cus, subject to conditions of providing free treatment to patients. However, investigations revealed non-compliance with these conditions, leading to a show cause notice proposing duty demand, confiscation, and penalties. The appellant's arguments regarding fulfilling the conditions were found unsubstantiated, and the Tribunal emphasized the appellant's inability to provide concrete evidence supporting compliance.

Benefit of Notifications and Time-Bar for Duty Demand:
The Tribunal considered the continuing obligation imposed by Notification 64/88-Cus on the appellant to provide free treatment, rejecting the appellant's argument of the demand being belated. Citing precedents, the Tribunal emphasized the ongoing nature of the obligation, dismissing the time-bar contention. Additionally, the Tribunal recognized and extended the benefit of Notification 65/88-Cus while deeming the redemption fine and penalties imposed as reasonable.

Treatment in Medical Camps as OPD Patients:
The appellant argued that patients treated in medical camps should be considered as OPD patients, referencing legal precedents. However, the Tribunal rejected this contention, citing previous decisions and finding no merit in the appellant's claim. The Tribunal upheld the impugned order, considering the factual and legal aspects presented, and subsequently rejected the appeal.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's rationale for upholding the decision.