1999 (3) TMI 305 - AT - Central Excise

Summary

Issues:
1. Importation of CT Scanner and Ultrasound Scanner under Customs Notification No. 279/83.
2. Failure to fulfill post-importation condition of providing free treatment to outdoor patients.
3. Confiscation of scanners, imposition of fines, and challenge before Delhi High Court.
4. Interpretation of time limit for compliance with exemption conditions.
5. Verification of compliance with conditions by the adjudicating authority.

Analysis:
1. The case involved the importation of a CT Scanner and an Ultrasound Scanner by the appellants under Customs Notification No. 279/83. The Department alleged that the appellants did not fulfill the post-importation condition of providing free treatment to at least 40% of total outdoor patients, leading to adjudication by the Commissioner.

2. The Commissioner ordered the confiscation of the scanners under Section 111(O) of the Customs Act, with an option for redemption on payment of a fine. Additionally, penalties were imposed on the appellants for non-compliance. The parties challenged this order before the Delhi High Court, which granted a stay order and extended the pre-deposit period.

3. The Senior Advocate for the appellants argued that the exemption notification did not specify a time limit for compliance with the free treatment condition. Referring to relevant clauses, it was contended that the appellants had complied with the required norms within a reasonable period. The Counsel cited a similar Tribunal judgment to support the argument against the imposition of penalties in the absence of a specified time frame.

4. On the other hand, the Revenue representative justified the denial of benefits under the notification, emphasizing the non-compliance by the appellants even over a six-year period. It was argued that the lack of indoor facilities for patient treatment further indicated non-compliance with the notification conditions.

5. The Tribunal, after considering both sides, noted the absence of a specified time limit in the notification for compliance. Referring to the precedent cited by the Counsel, the Tribunal remanded the matter to the Commissioner for detailed examination of whether the appellants had, on average, treated at least 40% of outdoor patients for free. The adjudicating authority was instructed to verify compliance with the notification conditions and make a decision after providing the appellants with an opportunity to substantiate their claim during the readjudication proceedings.

Therefore, the appeals were allowed by way of remand for further examination and decision by the adjudicating authority.