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TMI Blog2001 (10) TMI 927X X X X Extracts X X X X X X X X Extracts X X X X ..... anav Charitable Hospital, Bangalore or removed the same from the premises of the Research Society to the premises of Manav Charitable Hospital, Bangalore and brought back to the appellant society and also unauthorisedly allowed the said hospital to use the said equipment to treat the patients other than the appellant Research Society patients. Accordingly, a Show-cause notice dated 7-2-2000 has been issued to the appellants as to why (a) The benefit of exemption of duty under Customs Notification No. 64/88 Cus, dt. 1-3-88 should not be denied in respect of the medical equipments valued at Rs. 15,72,379/- mentioned at para 3 supra (except Sl. No. 1 which has been imported through ACC, Chennai) and the Customs duty amounting to Rs. 21,58,681/- (Rupees Twenty-one Lakhs Fifty Eight Thousand Six Hundred Eighty-one only) equal to the duty foregone on the said medical equipments, imported through ACC, Bangalore, should not be demanded under Section 28(i) of the Customs Act, 1962. (b) The impugned goods i.e. medical equipments mentioned at Sl. No. 2 to 4 at para 3 above, seized on 22-9-1999 from the premises of Research Society, Bangalore, which had been removed unauthorisedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be raised within the stipulated time as envisaged under Section 28 of the Customs Act i.e. normal period of six months and maximum period under Section 28 is five years if there was suppression of facts by the importer and at any rate it cannot be extended beyond the period of 5 years. In the instant case, Show-cause notice has been issued on 17-2-2000 and accordingly there was no justification to raise the demand for the period relating to 91, after a decade. He contended that Statutory Authorities are to be exercised within the limitation provided for in the Statute, and it is well settled that no court is empowered to direct a Statutory Authority to ignore the period of limitation prescribed under a Statute to make an assessment as it was held by the Apex Court in the case of Hope Textiles Ltd. v. U.O.I. reported in [1994 (205) ITR 508 (SC)]. He submitted that while deciding the time bar issue, the Commissioner has grossly erred in relying upon the decision of the Karnataka High Court in the case of Medical Relief Society of South Kanara v. U.O.I. [1999 (111) E.L.T. 327] without taking note of the decision of the Division Bench of the same High Court in the case of Yellamma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of the import relying upon the various decisions including Markendeya Prasad Radha Krishnan v. CCE Cal-II reported in [1998 (102) E.L.T. 705 = 1998 (25) RLT 919]. It was also submitted that this view was upheld by the Supreme Court as reported in 1999 (107) E.L.T. at Page A 121 under Court Room Highlights. 8. Shri George Thomas, learned DR appearing for the Revenue justified the action of the adjudicating authority in denying the benefit in terms of Notification 64/88, as well as imposing fine and penalties. He submitted that Commissioner was right in holding that demand was not barred by time relying upon the decision of the Karnataka High Court in the case of Medical Relief Society of South Canara v. U.O.I. (supra). He said that if the post-import conditions are not fulfilled as specified in the Notification, proceedings for recovery of the exempted customs duty or the confiscation of the equipment in such circumstances does not fall foul of Section 28 as it was held therein. In this context, he referred to the decision of the High Court (supra) Para 43 of the said Order which is as under : A plain reading of the above would show that goods, which are exempted from pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and 7-7-91 respectively. On examining the bills of entry as well as relevant exemption certificate goods were assessed finally allowing exemption as claimed. It is not a case that the provisional assessment was made at the time of importation and/or enforcing the bond. If it was a provisional assessment the position would have been different. Show cause Notice has been issued only on 17-2-2000 on the ground that the party has failed to comply with the provisions of aforesaid notification. Demand was raised nearly after a decade as it was pointed out by the appellants counsel. The demand is made under Section 28 of the Customs Act. As per the provisions of the Section 28 of the Act, demand can be raised for six months in the normal circumstances and maximum of five years if there was allegation of suppression of facts. There is force in the arguments advanced on behalf of the appellants that statutory authorities are to be exercised within the limitation provided for in the statute. In the case of Miles India Ltd. [1987 (30) E.L.T. 641], Doaba Cooperative Sugar Mills [1988 (37) E.L.T. 478] and Raghuvar India Ltd. [2000 (118) E.L.T. 311 (S.C.)], the Apex Court held that appellate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he demand is barred by time. Accordingly appellants succeed on this issue. 14. Next question arises for our consideration is whether Department was right in denying the benefit of exemption in terms of Notification 64/88-Cus. on the ground of non-fulfilment of conditions. As can be seen from the show cause notice as well as impugned order, emphasis is on removal of equipments to Manav Charitable Hospital for a temporary period and accordingly failed to fulfil the condition of the notification. It was submitted that temporary movement to and from Manav Charitable Hospital did not result in mis-use of the equipment. It was also submitted that the notification having not laid down any procedure or formality of approval to remove the equipment, the appellant could not have followed any such procedure. We find that if there was any irregularity in not taking the permission, for removal of equipment that may be a case for penalty for not following such procedure. But the point to be considered in this case is whether such equipment has been misused during that short period or in other words whether appellant society has failed to discharge the obligation in treating the patients as spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submission made herein, which are brought out in the order of Member (J). However, after considering the same, I find - (a) The Apex Court in the case of Mediwell Hospital Health Care (P) Ltd., v. U.O.I. [1997 (89) E.L.T. 425 (S.C.)], at p. 432, while considering the very same Notification i.e. Notification No. 64/88-Cus, observed, in para 12 of this reported decision - ....Needless to mention the Government has granted exemption from payment of Customs duty with the sole object that 40% of all outdoor patients and entire indoor patients of the low income group where income is less than Rs. 500/- p.m. would be able to receive free treatment in the Institute. That objective must be achieved at any cost, and the very authority who granted such certificate of exemption would ensure that the obligation imposed on the person availing of the exemption notification are being duly carried out and on being satisfied that the said obligation have not been discharged they can enforce realization of the Customs duty from them. and thereafter in para 13 of the same decision, the Hon ble Supreme Court has directed strict Coercive official action to perform the obligation undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to the time limits of Section 28(3)(a). This cannot be done, since under Section 111(o) and or 125(2), there is no limitation of time prescribed. (c) The impugned orders of the Commissioner, therefore resorting to recover duty, impose penalty and fine, without complying with the Supreme Court directions, are therefore, to my mind, not as per law, premature and hasty. The occasion for liability to confiscation for violation of Section 111(o) and duty liability has not come. Therefore the question of a demand of duty under Section 125(2) of Customs Act, 1962 has not arisen and the question of time bar does not arise. (d) The demands issued herein are therefore not barred by limitation prescribed by Section 28(3)(d), since the limitation prescribed therein is the outer limit and the demands could be made thereunder, even if the question of reckoning the time has not arisen. (e) I find no reason to uphold any penalty since liability for confiscation and demands are not being found to be upheld at this stage. 18. In view of my findings, I would respectfully agree with the order allowing the appeal as a remand for de novo adjudication on merits, after complying with the law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision in the case of HCL HP Ltd. v. Commissioner of Customs, New Delhi [1999 (112) E.L.T. 604 (T)] wherein it was held as under : Collector s reasoning to ignore Section 28 and demand duty on the basis of provisions of Section 125 of the Customs Act is not correct in law. A bare reading of Section 28 indicates that duty has to be recovered under Section 28 within the period of limitation laid down if there has been a short levy...... Simply because the goods duly cleared by the authorities are available for seizure and confiscation, Section 28 cannot be ignored for recovery of differential duty. Section 125 in our view will apply in the cases where the date of short levy or importation is not available and the confiscated goods are not proved to be duty paid. 22. Reliance was also placed on the decision in the case of Tata Infotech Ltd. v. Commissioner of Customs, 2000 (117) E.L.T. 252 (T)] wherein the following was held : Harmonizing the two, Section 125 would appear to come to play in cases where notice cannot be issued under Section 28 for the reason that there was no documentation relating to details of imports of the goods. In that event the provisions of sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l also submitted that the decision in the case of Mediwell Hospital and Health Care (P) Ltd. v. U.O.I., [1997 (89) E.L.T. 425 (S.C.)] was considered by, the Appellate Tribunal in the case of C.T. Scan Research Centre (P) Ltd. v. Commissioner of Customs [2001 (45) RLT 29]. In the said case the goods claiming benefit of Notification No. 64/88-Cus. was imported in July, 1991 and the show cause notice was issued in September, 1998 for non-fulfilment of post-importation conditions. The Tribunal held that Section 28 of the Customs Act provide a time period of 6 months for demand of duty and in the case of fraud, collusion, etc., 5 years. We find that since the show cause notice has been issued beyond permissible period of 5 years provided under Section 28 of the Customs Act, hence, decision of the Supreme Court in the case of Mediwell Hospital Health Care Pvt. Ltd. vs. U.O.I. (supra) cannot be said to apply to the facts of the present case as the demand is time barred. The learned Counsel, therefore, contended that the present show cause notice has also been issued much after the expiry of 5 years period the demand is time barred. Reliance was also placed on the decision in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out that Karnataka High Court dismissed the appeal with costs. He also mentioned that the Karnataka High Court has followed the decision of the Supreme Court in Mediwell Hospital case. He also relied upon the decision in the case of Yellamma Dasappa Hospital v. Commissioner of Customs, Bangalore [2000 (120) E.L.T. 67 (Kar.)] wherein the Karnataka High Court followed the decision of the Supreme Court in Mediwell Hospital case regarding continuing obligation of the hospital and the right of the Customs Department in demanding the Customs duty after following the procedure prescribed in law. The learned D.R. emphasised that in view of the decision of the Apex Court and Karnataka High Court, within whose jurisdiction the Appellants fall, there is continuing obligation on their part as they have imported equipments without payment of Customs duty; that as the Appellants have not complied with the post-importation conditions the Department is well within its right to demand the duty which is not time barred. He also mentioned that the decisions relied upon by the learned Advocate are of no avail in view of the decision of the Supreme Court and High Court directly on the issue involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t continuing obligation on the part of all those who have obtained the certificate from appropriate authority and on the basis of that have imported equipments without payment of Customs duty to give free treatment to atleast 40% of the outdoor patients as well as would give free treatment to all indoor patients belonging to the families with an income of less than Rs. 500/- per month. ........ If on such inquiry the authorities are satisfied that the continuing obligations are not being carried out then it would be fully opened to the authorities to ask the person who have availed of the benefit of exemption to pay the duty payable in respect of equipments which have been imported without payment of Customs duty. .......... that objective must be achieved at any cost and the very authority who have granted such certificate of exemption would ensure that the obligation imposed on the person availing of the exemption Notification are being duly carried out and on being satisfied they can enforce realisation of the Customs duty from them. 29. It is thus clear that the fulfilment of post-importation conditions has been considered by the Apex Court as a continuing obligation on th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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