2020 (1) TMI 1236 - AT - Customs

Benefit of N/N. 64/88-Cus. Dated1.3.1988 - import of one 9 Image Amplifier TV system for Urological Investigation - allegation that goods imported by them had not subsequently complied with the exemption Notification No.64/88 - HELD THAT - The Notification does not prescribe any registers to be maintained though it prescribes certain conditions as above. On going through the impugned order, it is found that the learned Commissioner s findings stress on the fact that the data submitted by the appellants was the secondary data and that original records of admission registers, discharge records of IPD and OPD, records of treatment given and evidence of income of patients. This is certainly beyond the scope of the Notification. It is also not the case of the Department that the proper authority has prescribed any such condition to maintain the records at the time of import. There are force in the appellant s contention that to maintain the records is not one of the statutory obligations and that even as per Code of Ethics Regulations, 2002 of Medical Council of India records are prescribed to be maintained for only three years. Therefore, it is not proper to call for such records even for the satisfaction of the adjudicating authority after a period 20 years. On going through the report, the allegations against the appellants appears to be that records have not been authenticated by any competent authority; records were submitted to Assistant Charity Commissioner, Sangli; no physical evidence was readily available and mandatory installation certificate duly certified by DGHS was not available and therefore, it was difficult to verify the compliance of the conditions of the notification - The Department has not established that the appellants are not entitled for the benefit of exemption notification. Department has not submitted any proof in this regard. Expression of inability to verify will not take away the benefit granted to the importer at the time of import, particularly looking into the facts of the case, wherein, the Department sought to examine records at a later date which is more than reasonable period of time. Appeal allowed - decided in favor of appellant.

Issues involved:
Import of medical equipment under Notification No.64/88-Cus dated 1.3.1989; Compliance with exemption conditions; Requirement of maintaining original records; Imposition of duty, redemption fine, and penalty; Verification of compliance with post-import obligations; Authentication of records by competent authority.

Analysis:

1. Compliance with Exemption Conditions:
The case involved the import of medical equipment under Notification No.64/88-Cus dated 1.3.1989. The key issue was whether the appellant complied with the conditions of the exemption notification. The Commissioner imposed duties, fines, and penalties alleging non-compliance. The appellants argued that they met the conditions by providing evidence of treating patients for free and at concessional rates, exceeding the required percentages. They also highlighted that the hospital catered to a rural population and had installed the imported equipment.

2. Requirement of Maintaining Original Records:
The Commissioner demanded original records of admission registers, discharge records, and treatment details to verify compliance with the exemption conditions. The appellants argued that maintaining such records after 30 years of import was unreasonable and not mandated by the notification or any statutory obligation. They provided documentary evidence and certifications to support their compliance, which the authorities failed to disprove.

3. Imposition of Duty, Fine, and Penalty:
The Commissioner increased the penalty in subsequent orders, leading to a significant penalty amount. The appellants contested the escalating penalties, arguing that the department failed to establish non-entitlement for the exemption benefit. The Tribunal found the penalties to be excessive and not in line with established legal principles, ultimately setting aside the impugned order.

4. Verification of Compliance with Post-Import Obligations:
The Tribunal directed the Chief Commissioner of Customs to examine the maintenance of records under the notification to resolve the dispute. The verification report highlighted challenges in authenticating old records, but the appellants provided a sworn affidavit and other reports to support their compliance. The Tribunal considered circumstantial evidence and the lack of proof from the department, concluding that the benefit of exemption should be extended to the appellants.

5. Authentication of Records by Competent Authority:
The verification report raised concerns about the authentication of records by a competent authority. However, the Tribunal noted that the records were submitted to the Assistant Charity Commissioner and that the department did not dispute their acceptance. The Tribunal emphasized that the inability to verify compliance did not negate the benefit granted at the time of import, especially considering the circumstances and the time elapsed since the import.

In conclusion, the Tribunal allowed the appeal, setting aside the impugned order and providing consequential relief as per the law. The judgment emphasized the importance of considering the specific conditions of exemption notifications, the reasonableness of record-keeping requirements, and the burden of proof on the department to establish non-compliance.

← Previous Next →