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TMI Blog1995 (10) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... of customs duty on the strength of the Certificate issued by the Directorate General of Health Services (DGHS). The importer also executed Bond and furnished guarantee as stipulated in the notification. It was alleged in the show cause notice dated 15-12-1993 that the import had been effected on the strength of the Certificate obtained by wilful mis-statement and by suppression of facts; they were not eligible for duty free import and for import under open general licence (OGL), as they did not fulfil the various requirements as stipulated in the said notification dated 1-3-1988; and that the various post-importation conditions as contained in the said notification dated 1-3-1988 had not been fulfilled. The matter was adjudicated by the Collector of Customs, Sahar Airport, Bombay, who under his order dated 20-12-1993 held that the various conditions as contained in the notification of dated 1-3-1988 subject to which the facility of duty-free import was available, had not been satisfied. He demanded the customs duty of Rs. 46,57,556, and imposed a penalty of Rs. 2,00,000/ on each of the 3 Indian Resident Partners of M/s. GIRI. He also imposed a redemption fine of Rs. 8 lakhs in lieu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. For the purpose of that notification, it was explained in the notification itself that the expression `hospital' included any institution, centre, trust, society, association, laboratory, clinic and maternity home, which rendered medical, surgical or diagnostic treatment. The responsibility for approval of the import had been cast on the Ministry of Health and Family Welfare or the DGHS. It was for those authorities to ensure that the import was essential for use in the hospital as specified in the table annexed to that notification. They were required to certify/opine that the hospital was one of those which were specified in the table referred to above. With regard to any hospital, which was in the process of being established, the importer was required to give an undertaking in writing to the Asstt. Collector of Customs at the time of clearance that he shall furnish certificates from the above authorities to the effect that the equipment imported had been installed in the hospital and that such hospital had started functioning. 7. It is seen from the Certificate dated 9-2-1990 of DGHS, New Delhi at pages 53 -55 of the Paper Book that the various items mentioned in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal' includes an institution which renders diagnostic treatment. It has been clarified by the DGHS under their communication dated 28-12-1990 addressed to the Collector of Customs, Bombay at page 63 of the Paper Book that the diagnostic centres with no indoor patient treatment facility were eligible for availing the benefit of customs duty exemption certification issued by the DGHS under Notification No. 64/88-Customs, dated 1-3-1988. The same position also emerged from the communication No. Z-37037/8/92 MG, dated 23-12-1992 from the DGHS addressed to the Additional Collector of Customs, New Customs House, Bombay. 8. The Collector of Customs, Sahar Airport, Bombay had observed that for availing the benefit of the notification, the importer had to comply with the conditions as specified in Paras 1, 2 & 3 of the table annexed to notification, to establish hospitals and that the importer in question had done nothing to establish the above type of hospital within two years which could relate their organisation to the above paras of the said notification. According to him, the importer had to establish a hospital with indoor treatment facility with hospital beds. These observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od i.e. subsequent to the inquiry/checking/seizure. We do not consider that on this account, the demand for the customs duty or imposition of penalty/fine could be justified. 10. As established by the facts in the case the equipment had been installed in the diagnostic centre and the said diagnostic centre had started functioning. The patients were being regularly treated. In any case, the Bond and bank guarantee also appear to be available for furnishing the certificates from the Ministry of Health and Family Welfare or from the DGHS in case of any deficiency in fulfilment of the post-importation conditions. In the circumstances the case of the appellant appears to be covered by the provisions of the Notification No. 64/88 -Customs, dated 1-3-1988. 11. The adjudicating authority had imposed a penalty of Rs. 2 lakhs on each of the three Indian partners. The show cause notice was issued only to one of the partners. The appellants had contended that as the proceedings were not drawn against all the partners the penalty on each of the Indian resident partners without complying with the principles of natural justice was not sustainable in Law. This contention has also a fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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