9911796707
TMI Blog2016 (8) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... tial declaration sought is that the Customs Duty Exemption Certificates (CDECs) dated 4th July 1988, 9th March 1992, 25th March 1992 and 23rd August 1993 are valid and binding upon the Respondents. 2. The background to the present petition is that the aforementioned entity (Petitioner No.1) is a registered firm of which Dr K. K. Aggarwal (Petitioner No.2), who is one of the two partners, is a Senior Consultant Cardiologist. The other partner Col. K. L. Chopra is also a renowned Senior Consultant Cardiologist and at the relevant time was Head of the Department of Medicine and Cardiology at Moolchand Khairati Ram Hospital (hereafter 'Moolchand Hospital') for over two decades. 3. It is stated that as a result of the training received by them abroad, the two doctors decided to bring new technology used in Echo Cardiography to India and with that objective formed the Petitioner No.1 institute. Dr. Agarwal also negotiated with Moolchand Hospital for the setting up of a "Colour Doppler Echo Cardiography" equipment in the Department of Cardiology of the Hospital. The understanding was that Petitioner No.1 would provide free diagnostic services to 40% of the outpatients and 10% of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd transmission to the DGHS which reads as under: "1. That the Institution undertaken to provide diagnostic aid/or treatment facilities to all citizens of India without distinction of caste, creed, race, religion or Language. 2. That the Institution will provide diagnostic, preventive or curative care free of cost to patients not less than 40% of all outdoor patients. 3. That the indoor treatment facilities will be provided free of cost to all families with income of less than Rs. 500/- per months and for this purpose not less than 10% of the total bed strength give institution will be reserved for such patients. 4. That the charges levied from other indoor patients will be reasonable either on the basis of the income of the patients/guardians or otherwise. 5. That the Hospital equipment/apportine [sic] and appliances imported/to be imported by the Institution will only be used in line Institution will not be removed the therefrom for private use & will not be sold or otherwise disposed for without prior permission of the Govt. of India (Ministry of Health & Family Welfare/DGHS). 6. That the institution has an appropriate programme for the establishmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hospital (Where this diagnostic Centre is located). Out of this, 149 were rendered free services. And during the period July 89 to December 89, out of the total of 1917 patients examined, 715 were the admitted in patients of the cardiology deptt. of Mool Chand K.R. Hospital. Out of which 83 were done free. Showing that they are rendering 11.5% free services. A visit was made on 21.8.90 to verify the facts. It is again pointed out that M/s Navin C. Nanda, National Institute of Echocardiography and Cardiac Research Office, MCKR Hospital, Lajpat Nagar, is a diagnostic centre where only OPD facilities are rendered. But, it is pointed out that the institute is rendering free services to the patients admitted in the cardiology department of Mool Chand K. R. Hsopital. Though, this institute does not have any indoor beds of its own, but that is being compensated by giving free services on the Alka Colour Doppler to the indoor patients of Mool Chand K. R. Hospital. And the percentage of free patients is more than 10%. Moreover, this institute has given an undertaking that they are ready to provide free services to all the referred patients from various hospital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lour Doppler Echocardiography The equipments Colour Doppler 860 and 870 are non functional; Aloka 860 since January 194 and Aloka 870 since March 1996. Both the models have been discontinued by the Aloka as spare parts are not available with the company. Apogee CX is presently being used for doing free diagnostic work. The machine is also been used for conducting various free diagnostic camps Mac 15 Electrocardiograph has been used now for over six years and as the technology over a period of time has changed the machine is not under commercial use for the last one year. The machine at present is being used for various free heart check up camps being organised by the Institute. Over a period of time the Institute has acquired newer models for doing the above diagnostic services." 13. In the meanwhile on 3rd July 1997 the DGHS issued a Show Cause Notice to the Petitioner No.1 referring, inter alia, to the decision of the Supreme Court in Mediwell Hospital and Health Care Pvt. Ltd. v. UOI AIR 1997 SC 1623 in which it had been noted that the Government had granted exemption in terms of the aforementioned Customs Notification No.24/98 with the object of providi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilities and therefore does not fulfil the conditions for availing and retaining CDEC." 17. On 9th November, 1997, the Petitioners addressed a letter to the DGHS pointing out that the Show Cause Notice had already been responded to in July 1997. A copy of the said notice was again enclosed with this letter. It was inter alia pointed out that "Mool Chand K. R. Hospital does not have Cardiac Lab of their own and hence the Cardiac Lab (NCNNI) cannot be considered as an independent unit within the hospital. We are also enclosing a copy of the agreement with Mool Chand K. R. Hospital where it is clearly mentioned in Clause-VII that 10% of the total number of cases treated by the centre as indoor patient shall be free and 40% of the outdoor consultation will be free. We hereby request your kindself to take the above into consideration and revised your decision to withdraw various CDEC's issued to us." 18. A letter was also addressed on 19th November, 1997 to the Secretary (Medical), Government of Delhi by the Petitioners requesting his personal intervention for him forward to the verified records of the institute to the DGHS at the earliest. 19. In response to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the indoor/outdoor patients". As a result of non fulfilment of the conditions stipulated in Customs Notification No.64/88, the Petitioner No.1 was asked to show cause as to why a duty of Rs. 5,05,796/- together with interest @ 20% should not be demanded apart from confiscation of the imported machinery. 23. The Petitioner replied to the above Show Cause Notice on 20th January, 1998 seeking for some time. The allegations of the Show Cause Notice were denied and it was stated that the Petitioner No.1 had furnished all the information and certificates as to the instalment of the machinery and that it had also started functioning in the stipulated period. It was pointed out that the case was decided against the Petitioners without granting an opportunity of personal hearing. 24. Thereafter, a further detailed reply was submitted by the Petitioners to the Commissioner of Customs on 24th January, 1998. 25. In the present writ petition, while directing notice to be issued, the Court on 4th February, 1998 passed the following interim order: "In the meantime, the respondents may proceed with the adjudication proceedings. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suant to the Show Cause Notice dated 3rd January, 1998. 30. A perusal of the Show Cause Notices issued to the Petitioner by the DGHS reveal that the action was triggered pursuant to the orders passed by this Court in W.P.(C) No.409/1996 (People's Union for Civil Liberties v. Union of India) as well as the Supreme Court in Mediwell Hospital and Health Care Pvt. Ltd. (supra). Those orders were based on the general apprehension of non-fulfilment of the conditions attached the CDEC Certificate in terms of Notification No.64/88 issued by the Customs. The Petitioners made a specific averment in para 27 of the writ petition that they had furnished a detailed reply on 16th July, 1997 to the Show Cause Notice. In response to the said averment, it is simply stated in the counter affidavit filed on behalf of the DGHS that this is a matter of record. In other words, there is no denial that the DGHS did receive the Petitioners' reply dated 16th July, 1997 and yet in the first impugned order dated 4th November, 1997, it is stated that the Petitioner had failed to file a reply before the dead line fixed by this Court in W.P.(C) No.409/1996, i.e., 15th September, 1997. It is only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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