2003 (8) TMI 151 - AT - Customs

Tribunal Upholds Post-Import Violations; Confiscation & Penalties; Redemption Fines Reduced

The Tribunal upheld the Commissioner's findings on violations of post-importation conditions under Notification No. 64/88-Cus., resulting in confiscation ... Confiscation and penalty - Redemption fine - Quantum of - Imported goods Issues Involved:1. Early posting of appeals for hearing.2. Fulfillment of post-importation conditions under Notification No. 64/88-Cus.3. Confiscation of imported goods under Section 111(o) of the Customs Act.4. Imposition of penalties under Sections 112(a) and 114A of the Customs Act.5. Demand of customs duty under Section 125(2) of the Customs Act.6. Quantum of redemption fine under Section 125 of the Customs Act.Detailed Analysis:1. Early Posting of Appeals for Hearing:The Department filed applications seeking early posting of the appeals for hearing. These applications became infructuous as the appeals were disposed of on the same day.2. Fulfillment of Post-Importation Conditions Under Notification No. 64/88-Cus:- Jaya Nursing Home (P) Ltd.: Imported a Whole Body CT Scanner without paying customs duty based on a certificate from the Directorate General of Health Services (DGHS) under Notification No. 64/88-Cus. The Customs authorities found that the hospital did not fulfill the free treatment conditions for outdoor patients and did not reserve 10% of beds for patients with family income less than Rs. 500 p.m. during 1993-1994 and 1994-1995. Consequently, a show cause notice (SCN) was issued.- Childs Trust Hospital: Imported a 'CO2 Surgical Laser System' without paying customs duty under the same notification. The Customs authorities found that the hospital did not provide the required free treatment to outdoor patients (40%) and indoor patients (10%) after 1990 and 1994, respectively. An SCN was issued for these violations.3. Confiscation of Imported Goods Under Section 111(o) of the Customs Act:- Jaya Nursing Home (P) Ltd.: The Commissioner of Customs upheld the SCN allegations, confirming the demand for duty, confiscating the imported goods with an option for redemption on payment of a fine of Rs. 10 lakhs, and imposing a penalty of Rs. 5 lakhs.- Childs Trust Hospital: The Commissioner confiscated the goods with an option for redemption on payment of a fine of Rs. 9,10,000/- and imposed a penalty of Rs. 1 lakh. The demand for duty was dropped as time-barred.4. Imposition of Penalties Under Sections 112(a) and 114A of the Customs Act:- Jaya Nursing Home (P) Ltd.: A penalty of Rs. 5 lakhs was imposed under Section 112(a).- Childs Trust Hospital: A penalty of Rs. 1 lakh was imposed under Section 112(a).5. Demand of Customs Duty Under Section 125(2) of the Customs Act:- Jaya Nursing Home (P) Ltd.: The duty demand was confirmed based on the Supreme Court's decision in CC v. Jagdish Cancer and Research Centre, stating that such a demand could be raised under Section 125(2) along with confiscation and penalty, without reference to Section 28 of the Act.- Childs Trust Hospital: No demand for duty was confirmed as it was considered time-barred.6. Quantum of Redemption Fine Under Section 125 of the Customs Act:- Jaya Nursing Home (P) Ltd.: The assessable value of the imported equipment was over Rs. 61 lakhs with a customs duty of over Rs. 24 lakhs. The market price was estimated to be around Rs. 85 lakhs plus profit. The redemption fine was reduced from Rs. 10 lakhs to Rs. 7.5 lakhs, and the penalty was reduced from Rs. 5 lakhs to Rs. 2 lakhs.- Childs Trust Hospital: The value of the imported equipment was Rs. 6,62,164/- with a customs duty of Rs. 9,09,068/-. The maximum redemption fine under Section 125 was around Rs. 6.6 lakhs plus profit. The fine was reduced from Rs. 9,10,000/- to Rs. 2 lakhs, and the penalty was reduced from Rs. 1 lakh to Rs. 25,000/-.Conclusion:The Tribunal upheld the findings of the Commissioner regarding the violation of post-importation conditions under Notification No. 64/88-Cus. and the consequent confiscation and penalties. However, the quantum of redemption fines and penalties were reduced based on the facts and circumstances of each case. The appeals were disposed of with these modifications.