R.K. Singh, Member (T) - (1.) THE appeal has been filed by Revenue against Order -in -Appeal No. CC(A)/Cus/I&G/116/D -I/07 dated 22.6.2007 which set aside the order -in -original dated 24.11.2004 in terms of which a duty demand of Rs. 16,34,657/ - was confirmed against the respondents M/s. Moradabad Charitable Trust & Health Research Centre along with redemption fine and penalty.
(2.) THE brief facts of the case are as under: The respondents had availed of the benefit of Notification No. 64/88 -Cus. dated 1.3.88 on the medical equipment imported without payment of duty on the basis of customs duty exemption certificate issued by DGHS. This notification required the respondents to fulfil certain post -importation conditions such as, to use the medical equipment for free treatment on an average to at least 40% of their outdoor patients, free treatment to all indoor patients belonging to families with an income of less than Rs. 500/ - P.M. and keeping for this purpose at least 10% of all the hospital beds reserved for such patients. The said exemption certificate was withdrawn by DGHS vide letter dated 30.8.2000 for non -fulfilment of the conditions of grant thereof. As the benefit of exemption from Customs duty under Notification No. 64/88 -Cus was granted on the basis of Customs Duty Exemption Certificate issued by DGHS which stood cancelled/withdrawn, the impugned duty liability followed as a consequence in the wake of the Supreme Court's judgement in the case of Mediwell Hospital & Health Care Pvt. Ltd. Vs. Union of India : 1997 (89) ELT 425 (SC) in terms of which it was held that there was a continuing obligation on the part of the importer for discharging obligation under Notification No. 64/88 -Cus and therefore liability to pay customs duty also continues and failure to comply with the stipulations and conditions prescribed in the said exemption notification would amount to importing the impugned hospital equipment without discharging the duty liability due thereon. The Commissioner (Appeals) set aside the adjudication order essentially on the ground that the appellants are a charitable hospital run by a charitable trust and substantially run and funded by charitable organisation in the name of M/s. Moradabad Charitable & Health Research Center, Moradabad as recognised by the DGHS to the Govt. of India. This fact is clearly admitted in the show cause notice as well as in the impugned order. Commissioner (Appeals) further observed that none of the conditions stipulated under any of the other three paragraphs i.e. paragraphs 2, 3 and 4 of the said notification's table are related to the category of hospitals falling under category (paragraph) 1 of the Table of the said Notification. Essentially the Commissioner (Appeals) held that in the present case the hospitals fell under the scope of paragraph 1. Revenue has contended that CDEC was issued vide DGHS for the category of hospital covered under paragraph 2 of the Table in the said notification and that there is no evidence or substance on the basis of which the Commissioner (Appeals) held that the exemption given to the respondents by DGHS was treating them under the category of hospital covered under paragraph 1 of the Table.
(3.) THE ld. Counsel for the respondents contended that they are charitable institution and therefore fall in the category of hospital covered paragraph 1 of the Table in the Notification No. 64/88 -Cus and were therefore not subject to fulfillment of the conditions mentioned in paragraph 2 of the said Table. He however did not show any evidence that the duty exemption certificate by DGHS was issued to them treating them as running a hospital under paragraph 1 of the said Table appended to Notification No. 64/88 -Cus.;