9911796707
TMI Blog2003 (8) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, at the time of clearance, the importers had produced a certificate from the Directorate General of Health Services (DGHS) certifying that the equipment was necessary for running/maintenance of the hospital in terms of Notification No. 64/88 and that the hospital fell in Category 4 specified in the notification; that later on the importers approached the DGHS with a request for a change from category 4 to category 2 under the notification claiming that they had already set up the hospital; that the DGHS did not issue any fresh certificate; that the Customs authorities, on their part, made enquiries as to whether the post-importation conditions of the Notification had been fulfilled by the importer whereupon it was found that the hospital had not fulfilled the free treatment conditions (in respect of outdoor patients) of the notification during 1993-1994 and 1994-1995 and that they did not reserve 10% of the total number of beds for indoor patients with family income less than Rs. 500 p.m. as required under the notification; and that, on the basis of the investigative results, the department issued a show cause notice (SCN) to the hospital on 14-7-1998, alleging that they had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 111(o) of the Customs Act with option for redemption thereof on payment of fine of Rs. 9,10,000/- under Section 125 of the Act. He also imposed a penalty of Rs. 1 lakh on the hospital under Section 112(a) of the Act. Hence the appeal of the Childs Trust Hospital. 4.We have heard both the sides. Ld. Counsel Shri Murugappan on behalf of M/s. Jaya Nursing Home (P) Ltd. and ld. Counsel Smt. Maithili on behalf of the Childs Trust Hospital have argued in similar lines. At the outset, they have contended that any liabilities or obligations under notification No. 64/88-Cus., had come to an end on 1-3-1994, the date on which the notification was rescinded by the Central Government. In the case of Jaya Nursing Home (P) Ltd., the medical equipment was imported and cleared sometime in the last week of April 1993. The Counsel for this hospital submits that the main allegation in the SCN was that free treatment to outpatients had fallen below the 40% limit during 1993-1994 and 1994-1995, whereas during the subsequent period the required minimum was admittedly attained by the hospital. He submits that, the notification having been rescinded on 1-3-94, any obligation to fulfil suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods confiscated. It is also claimed that the quantum of fine imposed on the appellants is unreasonably high, having been worked out without regard to the bona fides of the transactions. Ld. Counsel for Jaya Nursing Home (P) Ltd., referring further to the facts of his case, submits that the hospital's application for a fresh Duty Exemption Certificate is pending with the DGHS and therefore it was premature on the part of the adjudicating authority to decide the matter in spite of the appellant's plea of pendency of the DGHS proceedings. Ld. Counsel for the Childs Trust Hospital, on her part, submits that the hospital was set up as a wholly charitable institution and has ever continued as such. It is pointed out that one of the objectives of the Childs Trust is to provide free medical treatment to poor children. 5.Ld. SDR seeks to rely on the Apex Court's decision in Mediwell Hospital case and the Tribunal's Larger Bench decision in the case of Lady Amphthil Nurses Instns. v. CC, Chennai reported in 2002 (150) E.L.T. 776. Ld. SDR submits that, on the facts found by the adjudicating authority, none of the appellants has fulfilled the obligations under the notification. While the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material time, not available in the Indian market and, therefore, any market enquiry would have yielded no result. In such a situation, one could only take into reckoning the assessable value plus the duty payable thereon in the matter of determining the quantum of redemption fine. At this stage, Counsel for the appellants point out, with reference to the facts of the case considered by the Supreme Court in Commissioner of Customs Mumbai v. Jagdish Cancer Research Centre (supra), that the redemption fine of Rs. 50,000/- imposed by the Commissioner in that case, wherein even the duty demanded on the goods was over Rs. 64 lacs, was affirmed by the Apex Court. 7.We have examined these submissions carefully. We shall first address the arguments advanced by both the sides with reference to the rescission of the notification. The subject notification was rescinded on 1-3-1994. It is stated that in the successor Notification, there was no provision or saving clause to keep alive any provision of the rescinded notification. In this connection, we should immediately refer to Section 159A of the Customs Act. That Section was enacted on 11-5-2001 with retrospective effect from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sisted beyond 1-3-1994. We further find that Section 114 of the Finance Act, 2001 accorded to Section 159A of the Customs Act overriding effect on judgments/orders/decrees of court/tribunal contrary to the purport of the said Section 159A. In the result, the provisions of Section 159A override the Hon'ble High Court's ruling in Apollo Hospitals case. Therefore, the learned Counsel's plea of cessation of operation of obligations under the notification cannot be accepted. The learned SDR's argument that such obligations continued to operate beyond the date (1-3-1994) of rescission of the notification is well-founded. The question, now, is whether the appellants fulfilled their obligations under the notification. To decide on this question, we shall have to examine the facts of the case. In both these appeals, there is no contest of the facts recorded by the adjudicating authority. In the case of Jaya Nursing Home (P) Ltd., it is stated that, during 1993-1994 and 1994-1995, free treatment was given by the hospital only to the extent of less than 40% indigent outpatients per year, which amounted to violation of one of the crucial conditions of the notification, which had required that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fine which shall not exceed the market price of the goods confiscated. Their lordships were considering imported goods covered by clauses (d) and (m) of Section 111 of the Customs Act. Before us are cases involving imported goods which attracted clause (o) of Section 111 of the Act. This provision of law renders such goods liable to confiscation, which are imported and cleared free of duty in terms of an Exemption notification and in respect of which the importer subsequently violates the post-importation conditions of the notification. As rightly pointed out by the SDR, one of the conditions of notification No. 64/88-Cus. was that the medical equipment to be imported thereunder should be one not manufactured in India. If that be so, the medical equipment cleared, duty-free in terms of the notification is one which is hard to find in the domestic market, leaving no scope of market enquiry in India. Such a situation, apparently, had not arisen in the case of Mohan Meakin. Nevertheless, the principle embodied in the proviso to Section 125(1) has to be taken into account by the adjudicating authority while confiscating such goods as well. In our view, the Commissioner's order has to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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