S.S.SEKHON,J - (1.)THE appellants, M/s. INYS Medical Research Society (hereinafter referred to as Society), had imported medical instruments and equipment under the claim of exemption vide Notfn. No. 64/88 -Cus., dt. 1 -3 -88. The imports were as follows: - JUDGEMENT_63_LAWS(CE)2_20031.htm
(2.)CONSEQUENT to certain enquiries, the officers found that the Society had transferred the imported equipment to an adjacent premises belonging to Manav Charitable Hospital (MCH for short) and even though the Society had furnished the following treatment figures of the patients treated : -
1992 -931993 -941994 -951995 -961996 -97 OPD155451184207188456186040181708 IPD30553583432544784978 Camp - - -609129176771446111728

and also that MCH also fulfils the conditions of the notification and they were treating the patients free of cost, yet the equipment at MCH premises were seized as no permission to remove the same to close premises or their return was to be obtained from the Customs officers. Further enquiries were conducted and it appeared to the Department that the Society did not satisfy the post -importation conditions of the Notfn. No. 64/88 -Cus., dt. 1 -3 -88 inasmuch as : -

(i) The Research Society either had removed the said medical equipments outside the Research Society or installed directly at MCH, Bangalore, and also brought back the said medical equipments into the premises of Research Society. Thus there was a movement of medical equipments without taking permission and without following proper procedure as laid down under the Customs Act, 1962;

(ii) The Research Society failed to produce documentary evidence to show that they have actually provided free treatment to at least 40% of the out patients. They had also failed to produce any proof for having treated free all the in patients whose family income is less than Rs. 500/ - pm and also for having reserved 10% of the total beds for this purpose, as stipulated in the said Notfn. No. 64/88;

(iii) The Research Society had unauthorisedly used the said medical equipments for treating the patients of MCH. Therefore, it appeared that the said medical equipments imported under Notfn. No. 64/88 -Cus. by the Society totally valued at Rs.15,72,379/ -(assessable value) were liable for confiscation, and the Customs Duty to the tune of Rs. 21,58,681/ - (equal to duty foregone) was also liable to be recovered from the said Society under Section 28 of the Customs Act, 1962. The said Society were also liable for penalty under Section 114A of the Customs Act, 1962 and proceedings by issue of Show Cause Notice dt. 7 -2 -2000 were initiated.

(3.)THE Commissioner after considering the reply adjudicated the matter demanding a duty of Rs. 21,58,681/ - from the society on the three equipments imported by them in Air Cargo Complex, Bangalore and also ordered the confiscation of the same under Section 111(o) of the Customs Act, 1962. However, he allowed the redemption of the same on a fine of Rs. 2,00,000/ - under Section 125 of the Customs Act, 1962 besides imposing a penalty of Rs. 21,58,581/ - under Section 114A and demanded interest under Section 28AB of the Customs Act, 1962.
Aggrieved by the above said order, the Society preferred an appeal before CEGAT. CEGAT by its final Order No. C/51/2000 [2002 (149) E.L.T. 447 (Tri.) remanded the case back to the jurisdictional Commissioner for de novo consideration. In this Order, two major issues were discussed as under : -

(i) Whether the demand is time -barred; and

(ii) Whether the appellants were eligible to the exemption contained in Notfn. No. 64/88

In view of the difference in opinion amongst the 2 Members on the above issues, the matter was referred to a third Member who after considering all the facts of the case and the case laws clearly held that the demand is not time -barred. On the other question whether the appellants were eligible to the exemption contained in Notfn. No. 64/88 -Cus., dt. 1 -3 -88 the matter was remanded back to the original authority to be decided on merits and as laid down by Supreme Court in Mediwells case.