2000 (11) TMI 230 - AT - Customs

Summary

Issues Involved:
1. Availability of exemption under Notification No. 64/88-Cus.
2. Compliance with post-importation conditions.
3. Validity of the show cause notice issued by the Assistant Commissioner.
4. Imposition of penalty and interest.
5. Time-barred demand under Section 28 of the Customs Act.

Issue-wise Detailed Analysis:

1. Availability of Exemption under Notification No. 64/88-Cus:
The primary issue is whether the "Lithotriper Model Triper X-1" and 'urological X-ray examination unit' imported by M/s. Chandigarh Lithotripsy Centre in 1991 are eligible for the exemption provided under Notification No. 64/88-Cus., dated 1-3-1988. The Appellants imported medical equipment against a custom duty exemption certificate issued by the Directorate General of Health Services (DGHS), New Delhi. The Commissioner of Customs confirmed the demand for customs duty, imposed a penalty, and confiscated the goods, citing non-compliance with the notification conditions.

2. Compliance with Post-Importation Conditions:
The Commissioner held that the Appellants failed to produce the installation certificate issued by DGHS, which is crucial for determining the hospital's operational status and compliance with para 3 of the Table annexed to the notification. The Appellants argued that they had sent installation reports to DGHS and followed the procedural requirements, but delays were due to governmental procedures. The Tribunal referenced the St. Stephens Hospital case, which clarified that the installation certificate requirement applies only to hospitals in the process of being established (para 4 of the Table). Since the Appellants fall under Serial No. 2, the installation certificate condition does not apply to them.

3. Validity of the Show Cause Notice Issued by the Assistant Commissioner:
The Appellants contended that the show cause notice issued in 1998 by the Assistant Commissioner for equipment imported in 1991 was void ab initio, as the Assistant Commissioner was not competent to issue it. They relied on the decision in Dewan Chand Satyapal Agarwal Imaging Research Centre v. C.C., New Delhi. The Tribunal did not address this point explicitly, as the appeal was allowed on merit.

4. Imposition of Penalty and Interest:
The Appellants argued that no penalty or interest is recoverable for imports made before the provisions of Sections 28AB and 114A of the Customs Act came into force. They cited the Dewan Chand case, which held that demand beyond the limitation period specified under Section 28 of the Act is time-barred. The Tribunal did not consider this argument, as the appeal was allowed on merit.

5. Time-Barred Demand under Section 28 of the Customs Act:
The Appellants claimed that the demand for duty was time-barred under Section 28 of the Customs Act. The Tribunal did not address this issue explicitly, as the appeal was allowed on merit.

Conclusion:
The Tribunal concluded that the Appellants are covered by paragraph 2 of the Table below Notification No. 64/88-Cus. and not by paragraph 4. Therefore, the condition of producing an installation certificate does not apply to them. The Tribunal noted that the Appellants had submitted the installation report to DGHS, which was forwarded through the State Health Department. The fact of installation of the imported equipment was not disputed. The show cause notice did not allege non-fulfillment of all conditions specified in the notification, only the non-submission of the installation certificate. Thus, the impugned order was set aside, and the appeal was allowed on merit, without considering other points raised by the Appellants.