Refund granted for imported medical equipment by Tribunal in Cancer Hospital case

The Appellate Tribunal CESTAT MUMBAI upheld the Commissioner of Customs (Appeals) decision allowing the refund claim for imported medical equipment by the respondents, who were setting up a Cancer Hospital in Kolkata. Despite paying duty without protest and not challenging the assessment order, the respondents were granted the refund based on an ad hoc exemption order that was in place during import but unknown to them at the time. The Tribunal distinguished a previous Supreme Court decision cited by the Revenue and dismissed their appeal, emphasizing the need for the respondents to comply with the conditions of the exemption order.

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Issues:
- Appeal against the order allowing refund claim for imported medical equipment
- Entitlement for refund due to payment of duty without protest and not challenging assessment order

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI was filed by Revenue against the order passed by the Commissioner of Customs (Appeals) allowing the refund claim of the respondents for medical equipment imported by them. The respondents, setting up a Cancer Hospital in Kolkata, applied for ad hoc exemption for the imported medical equipment. Despite not being aware of the ad hoc exemption order at the time of import, duty was paid and the equipment was cleared. Subsequently, a refund claim was filed based on the ad hoc exemption granted. The adjudicating authority rejected the claim citing non-payment under protest and no challenge to the assessment order.

In response, the Revenue relied on a Supreme Court decision and argued that since duty was paid without protest and the assessment order was not challenged, the respondents were not entitled to a refund. Furthermore, the Revenue mentioned a Delhi High Court decision currently under challenge before the Supreme Court. The respondents contended that they had applied for ad hoc exemption, which was later granted but not known to them during import. They argued that the duty was paid despite the existence of the exemption order, and the refund claim was filed upon becoming aware of it.

The Tribunal found that the refund claim was based on an ad hoc exemption order already in place during the import, albeit not communicated to Customs due to the respondents' lack of awareness. The Tribunal distinguished a previous Supreme Court decision cited by Revenue, stating it was not applicable in this case where goods were assessed to duty regardless of the exemption order. Consequently, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeal. However, the Tribunal emphasized that the respondents must comply with the conditions of the ad hoc Exemption Order they are claiming.

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