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TMI Blog2006 (2) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... notice is still said to pending for decision. 2. To check the fulfilment of other conditions prescribed under Notification No. 64/88-Cus., dated 1-3-1988, the office of the Accountant General (Audit), Haryana conducted an audit of this Hospital on 4-10-1996 and submitted their findings. On the basis of their findings, it was alleged that- (i) The percentage of outdoor patients to whom free treatment was given was far below the requirement of the said notification. (ii) Indoor patient facility was started after a lapse of two years from the date of import of scanner. (iii) It cannot be ensured that all the indoor patients whose monthly income was less than Rs. 500/- were treated free as the income of the patients/guardian was not found recorded in any of the records maintained by the hospital. (iv) The CT scanner was not necessary for running or maintenance of the hospital. Therefore it appeared that the hospital did not satisfy the post importation conditions of the Notification No. 64/8-Cus. and thereby making the machine liable for confiscation under Section 111(o) of the Customs Act and hospital b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner after issue of the letter dated 12-12-1997 by Directorate General of Health Services cancelling the Customs exemption certificate which should have been done by them if this letter was required to be relied upon. However, on this the Commissioner has not given any finding in his order and he simply relied on the letter dated 12-12-1997 issued by the Directorate General of Health Services. The Commissioner has also given finding that the percentage of outdoor patient to whom free treatment was given was far below the minimum percentage of 40% as prescribed in notification No. 64/88-Cus. and the indoor facility was started by the noticee after a lapse of two years from the date of import of scanner. It was argued that they had in reply to the show cause notice in para 3.3 had given information to Civil Surgeon, Haryana Government, vide their letter dated 30-1-1993 in which it was clarified that the scanner has been installed in the hospital and started functioning w.e.f. 28-11-1992. It was also argued that they have met the criteria of free treatment to more than 40% of the outdoor patients and more than 10% of the indoor patients. This information was supplied by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Section 111(m) of the Customs Act. The goods were also not imported contrary to any prohibision imposed and hence these were not liable for confiscation under Section 111(d) of the Customs Act. Therefore, the order of confiscation is bad in law. 3.2 It was argued that in the show cause notice penalty is proposed under Section 114A of the Customs Act and the Commissioner has imposed a penalty under the said provision. This provision of the Customs Act for imposition of penalty is not applicable in their case as this was introduced in the Customs Act by the Finance Act, 1996. The CT Scanner was imported in 1992, therefore, this penalty provision could not have been invoked for imposition of penalty for an Act of 1992. Therefore, the penalty imposed on the appellants may be set aside. It was also argued that Section 114A is for imposition of penalty where duty has not been levied or has been short-levied or interest has not been charged or paid or part paid or erroneously refunded by reason of the collusion or any wilful mis-statement or suppression of facts. In the present case, there is no collusion or wilful mis-statement or suppression of facts, therefore, provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it says that the hospital was required to give certificates to the extent of 40% free services outdoor patients and 10% to other patients. No allegation regarding requirement of certificate from Ministry of Health and Family Welfare was made in the show cause notice. The show cause notice alleges about non-fulfilment of conditions (a), (b) and (c) of para 2 of the table to notification. The Commissioner has gone beyond the terms of allegation made in the show cause notice. (d) Blue Blends (India) Ltd. v. Commissioner of Customs, Mumbai - 2001 (136) E.L.T. 411 (Tri. - Mumbai) - For the proposition that effect of cancellation is not to render the licence invalid for any imports of goods made before such cancellation. (e) Apollo Hospitals Enterprises Ltd. v. Union of India - 2001 (133) E.L.T. 58 (Mad.) = 2001 (46) RLT 249 (Mad.) - Where it was held in para 43 that the petitioner those who benefited the tax exemption are bound to discharge the liability during the period when the said notification No. 64/88 was in force. Hence it is always open to authorities to enforce such obligation only during the period when the Notification No. 64/88-Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate dated 4-9-1992 and its cancellation the appellants were not entitled for duty free import of the CT Scanner in dispute. Therefore, the Commissioner has correctly relied on this letter dated 12-12-1997 of Director General of Health Scheme withdrawing/cancelling the custom duty exemption certificate and he was not required to look into the other conditions of Notification No. 64/88-Cus., dated 1-3-1998 as the appellant has no Custom duty exemption certificate with them and accordingly they were not entitled for the exemption granted under Notification No. 64/88-Cus. It was also argued that the appellants have not fulfilled the other conditions of the Notification. The CT Scan centre building have no facility for indoor patient. As per report of the team of Doctors (page 60) of the paper book, it is clear that the indoor patients ward was only in hospital wing. Reliance was placed on the following decision :- (a) Kailash Diagnostic & Rehabilitation Centre P. Ltd. v. D.G. of Health Services reported as 2003 (153) E.L.T. 281 (A.P.) - Where it was held that Diagnostic centre is not a hospital within the meaning of Notification No. 64/88-Cus. (b) &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly income is less than Rs. 500/- p.m. should be treated free. The appellants have failed to show any record regarding the income of the family of person to whom free treatment was given. Therefore, they have failed to establish that they have given free treatment to the indoor patients whose family income is less than Rs. 500/- p.m. Thus, appellants have failed to fulfil the condition of Notification No. 64/88-Cus. and they are not entitled for the exemption. 4.3 It was further argued that in para 5 of the show cause notice issued to the appellant, there is a mention of the fact that the hospital did not satisfy the post importation condition of the above notification thereby making the scanner liable for confiscation under Section 111(o) of the Custom Act, 1962. However, in para 9 of the show cause notice instead of 111(o) there is a mention of 111(d) of the Customs Act. This appears to be a typographical error as 111(d) is nowhere mentioned in the entire show cause notice except in para 9(ii) of the show cause notice whereas the proposal for confiscation under 111(o) has been made out in para 5 of the show cause notice. It was argued that even if there is a wrong mention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission on their part have rendered the goods liable for confiscation. Therefore, they were liable for penalties under Section 112(a) of the Customs Act. The penalty imposed by the Commissioner by wrongly mentioning Section 114A should be the penalty under Section 112(a) of the Customs Act. 4.4 Finally it was argued that it is a fact that the Commissioner has not taken into consideration the various documents regarding treatment given to the indoor patients and outdoor patients as he has decided the case only one ground that the Custom duty exemption certificate was withdrawn and cancelled by the Director General Health Services. Therefore, he had not considered the other grounds. On the appellants plea that the figure of indoor and outdoor patients and those who availed facility of CT Scanner are duplicated to some extent, it was argued that all these documents regarding free treatment given to outdoor patients and indoor patients as has been furnished by the appellant to Director General Health Services through Civil Surgeon, Hissar and submitted to the department in their appeal petition and also before the Commissioner. Now these figures cannot be changed as has been claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper book. The letter is addressed to the Superintendent, Central Excise, Hissar. Another letter addressed to the Commissioner and Secretary, Government of Haryana (pages 69 to 71) of paper book where they have mentioned that during the year 1992-93 free treatment was given to only 39% of the outdoor patients. During 1993-94, the appellants have added the figures of patients of associated hospitals. If the free treatment given to patients of Associated hospitals are taken out then the percentage is far below the minimum requirement of 40% and they have shown the percentage as 41% which is totally misleading. As regards to year 1994-95 the appellant have worked out the figure of the outdoor patients given free treatment to 40% whereas it actually worked out to 28% only. This was admitted by the appellant during the hearing that the 40% was wrongly shown the correct figure is 28%. 7. We also find that for giving free treatment to 10% of the patients whose family monthly income is less than Rs. 500/- p.m. no records were maintained by the appellant. They could not produced such records during the proceedings before the Commissioner. Therefore, the audit has correctly pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed which was although invoked in para 5 of show cause notice. Even otherwise wrong mention of Section has not prejudiciously affected the defence of the appellant as they were fully aware that the confiscation is also proposed under Section 111(o) of the Customs Act and actually dealt with in the show cause notice as pointed out above. Therefore, there is no valid reason to interfere with the findings of the Commissioner regarding confiscation of the CT Scammer machine which should be treated confiscated under Section 111(o) of the Customs Act. 10. Regarding imposition of penalty under Section 114A, we find that the show cause notice proposes penalty under the said Section. We find that penalty cannot be imposed under section 114A, as there was no misdeclaration at the time of clearance of goods at the time of import. The appellant has not fulfilled the post-importation conditions for which Section 112(a) was applicable. The ingredient of Section 114A are entirely different from the ingredients of Section 112(a) under which penalty was imposable. Since no proposal for imposition of penalty under Section 112(a) has been made in the show cause notice nor the same has been discu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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