1999 (11) TMI 86 - HC - Customs

Court sets aside seizure of medical equipment, orders release to appellant due to unlawful customs duty imposition

YELLAMMA DASAPPA Versus COMMISSIONER OF CUSTOMS, BANGALORE

YELLAMMA DASAPPA Versus COMMISSIONER OF CUSTOMS, BANGALORE - 2000 (120) E.L.T. 67 (Kar.) Issues involved: The appeal challenges the order of the learned Single Judge dated 25-6-1999 in W.P. No. 8244/99 regarding the seizure of medical equipment imported by the appellant under an exemption certificate.Facts: The appellant, a hospital operator, imported medical equipment between 1988 and 1996 under an exemption from customs duty. The equipment was seized by the Appraiser of Customs on the grounds of non-compliance with the conditions of the exemption certificate issued under a Ministry of Finance Notification dated 1-3-1988. The appellant challenged the seizure in W.P. No. 8244/99, which was dismissed by the Court due to the appellant's failure to fulfill the continuing obligation under the exemption. The Court ruled that without canceling the certificate, no coercive steps could be taken.Contentions: - Appellant's Counsel argued that confiscation cannot occur without canceling the exemption certificate and cited inconsistency in the Department's approach in similar cases.- Department's Counsel contended that violations by the appellant justified the seizure and relied on the Rosha Committee and Supreme Court judgment to support the confiscation.Judgment: After hearing both parties, the Court held that the seizure was not lawful as the exemption certificate had not been canceled. The Court emphasized that unless the certificate is canceled, customs duty cannot be imposed. The Court found no evidence of inquiry as per the Rosha Committee's recommendations and rejected the Department's reliance on it. Additionally, the Court highlighted the Supreme Court's ruling on continuing obligations and noted the absence of any notice or demand for customs duty from the appellant. The Court concluded that the Department erred in seizing the equipment without canceling the certificate and set aside the Single Judge's order, quashing the seizures and ordering the release of the machines to the appellant.Result: The writ appeal was allowed, the Single Judge's order was set aside, and the seizures were quashed with the machines to be released to the appellant. The Court clarified that this order does not prevent the Department from initiating proceedings for cancellation or demanding customs duty following the prescribed legal procedure. No costs were awarded in this matter.