2008 (5) TMI 37 - SC - Customs

Medical equipment imported for specified purposes, was exempted from the payment of customs duty equipment was not properly utilized as per conditions of exemption notifications - non-submission of the information in the prescribed format - large scale misuse of the medical equipment appellant was rightly refused the installation certificate for the imported medical equipment - it is essential that the authorities regulatory monitor the use of the equipment assessee s appeal dismissed

Summary

Issues Involved:
1. Validity of the order dated 9th December 1997 issued by the Director General Health Services.
2. Compliance with the conditions of the Customs Duty Exemption Notification.
3. Requirement of a show cause notice under Section 124 of the Customs Act, 1962.
4. Adequacy and format of information furnished by the appellant regarding the use of imported medical equipment and free services provided.

Detailed Analysis:

1. Validity of the Order Dated 9th December 1997:
The appeal challenges the Andhra Pradesh High Court's dismissal of a Writ Petition questioning the validity of the order dated 9th December 1997 issued by the Director General Health Services, New Delhi. The High Court had dismissed the Writ Petition, leading to the present appeal.

2. Compliance with the Conditions of the Customs Duty Exemption Notification:
The appellant, a private limited company, imported medical equipment under a government notification exempting customs duty for specified purposes. The appellant failed to provide adequate information regarding the use of the "Hand Held Recording Doppler" and the free services to the poor as required by the exemption notification. The appellant argued that the equipment had not been imported and that there was only a marginal deviation in providing free services. However, the court found that the appellant's conduct was unsatisfactory and that the information provided did not fulfill the requirements of the notification dated 10th August 1993. The court emphasized the importance of adhering to the conditions of the import and following guidelines to ensure proper utilization of the equipment.

3. Requirement of a Show Cause Notice under Section 124 of the Customs Act, 1962:
The appellant contended that the High Court judgment was not maintainable as no show cause notice was issued under Section 124 of the Customs Act, 1962. The court rejected this argument, stating that Section 124, which deals with the confiscation of goods, was not applicable to the present case.

4. Adequacy and Format of Information Furnished by the Appellant:
The appellant was required to furnish specific details regarding the use of the imported equipment and the free services provided to the poor. Despite repeated requests, the appellant failed to provide the necessary information in the prescribed format. The court found that the information furnished by the appellant did not remotely fulfill the requirements as per the proforma laid down in the notification dated 10th August 1993. The court cited the case of Mediwell Hospital & Health Care Pvt. Ltd. vs. Union of India & Ors., emphasizing the continuing obligation to provide necessary information and the importance of regulatory monitoring to prevent misuse of the exemption.

In conclusion, the court dismissed the appeal, finding no merit in the appellant's arguments and emphasizing the need for strict compliance with the conditions of the customs duty exemption notification and proper utilization of imported medical equipment.