AI Drafter 
TaxTMI 
TaxTMI 
2018 (8) TMI 1347
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....on 111(o) of the Customs Act, 1962. However, I give the option of redeeming the same under section 125(2) of the Customs Act, 1962 by paying redemption fine of Rs. 20,00,000/- (Rs Twenty Lakhs only) c) I impose a penalty of Rs. 20,00,000/- (Rs Twenty Lakhs) on the importer under section 112(a) of the Customs Act, 1962. d) I also order payment of interest for deferred payment of duty under Section 28AA of the Customs Act, 1962. e) This order is issued without prejudice to any other action that may b taken under any other law for time being in force." 2.1 Appellant had imported certain medical equipments duty free claiming the benefit under Notification No 64/88 dated 01.03.1988. The said exemption being an end use exemption was admissible subject to certain conditions of usage prescribed by the notification. The exemption was availed on the basis of Certificate issued by the Director General Health Services (DGHS). Subsequently since the Appellant did not fulfill the conditions as prescribed by the notification, the said Certificate issued by DGHS was cancelled and withdrawn. Thus a show cause notice was issued to appellant proposing to: i. confiscate the goods import....
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....r section 112(a) as they have not contravened any of the provisions of the Custom Act, 1962. ix. No interest is recoverable from them as the demand of duty cannot be sustained against them. 3.0 Have heard Shri T Viswanathan Advocate for the Appellant and Shri S R Nair Authorized Representative for the department. 3.1 Arguing for the Appellants, learned advocate submitted: i. The show cause notice in case of goods imported on 3^rd August 1992 has been issued on 18^th January 2001 and hence beyond the statutory period prescribed for issuance of the demand in terms of section 28 of the Customs Act, 1962 therefore barred by limitation [Dharampal Lalchand Chug Vs CCE [2015 (323) ELT 753 (Bom], C J Shaw Vs Union of India [2018 (359) ELT 22 Bom)]; ii. Demand of duty in terms of Section 125 (2) is not sustainable as they have not opted to redeem the confiscated goods and for this he relied on the following decisions- a. Fortis Hospital Vs Commissioner Customs [2015 (318) ELT 551 (SC)]; b. Jaslok Hospital and Research Centre Vs Commissioner Customs (Import) [2016 (12) TMI 568]; c. Sankar Shashtyabdapoorthi Memorial Hospital Vs Union of India [2016-T....
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.... writ petition filed by the Appellant. Since the conditions of exemption notification are not fulfilled by the Appellant the benefit of exemption Notification No 64/88-Cus is not admissible to them and accordingly the goods are liable for confiscation under section 111(0) of the Customs Act, 1962. Supreme Court has in case of Mediwell Hospitals supra, held that in case of non fulfillment of the conditions of exemption notification subsequent to the importation/ clearance of the goods from Custom would render the goods liable for confiscation. Hence we respectfully following the said decision of the Hon'ble Apex Court we uphold the order of Commissioner confiscating the goods and imposition of redemption fine. 5.0 Similarly in case of Jagdish Cancer & Research Centre supra, Hon'ble Apex Court held as follows: "2. M/s Jagdish Cancer and Research Centre, Hyderabad (to be referred as `Centre) applied for duty free clearance of a consignment importing Teletherapy Unit (Theratron780-C) for its use under Notification No.64/88 Cus Dated 1.3.1988, issued under Section 25(1) of the Customs Act, 1962. The Central Government under the aforesaid notification exempted all apparatus and app....
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....ndoor patients, and for providing free treatment to 40% of outdoor patients, their case is that the Centre had been providing free treatment accordingly and the shortfall was only marginal over the years. Therefore, no condition of the Notification was violated. 5. The Adjudicating Authority held that installation certificate in terms of Clause 4(iii) was not required to be submitted by the Centre but it failed to comply with other two conditions about providing free treatment as required and reservation of 10% beds in the hospital. It was also found that the Centre did not have inpatient facility at all. Placing reliance upon a decision of this Court in M/s Mediwell Hospital and Health Care Pvt. Ltd. Vs. Union of India, (1997) 1 SCC 759, it has been found that providing free treatment in terms of the Notification is a continuing obligation, therefore, limitation as provided under Section 28(1) of the Customs Act would not come into play. By order of the Adjudicating Authority the goods imported were confiscated under Section 111(o) of the Customs Act with an option to the Centre to redeem the same under Section 125(2) of the Customs Act on payment of fine of Rs. 50,000/-. A pen....
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....le to any duty and charges payable in respect of such goods. 9. Learned counsel for the Centre draws our attention to Chapter XIV of the Customs Act and submits that it relates to confiscation of goods and conveyances and imposition of fines. It does not relate to imposition or demand of customs duty. Section 124 and 125 also fall in Chapter XIV. Section 124 provides for issue of show cause notice before confiscation of goods and Section 125 relates to payment of fine in lieu of confiscation. Section 28 of the Act which falls in Chapter V provides for notice for payment of duties which has been demanded by the notice in this case. Therefore, it is submitted on behalf of the Centre that demand of customs duty and the order for payment of the same is relatable to only Section 28(1) of the Customs Act, as also found by the CEGAT. That being the position, the notice was beyond time and not by a competent officer authorized to issue the same. The argument, as advanced, though seems to be attractive but on scrutiny, we find no merit in it. Section 124 reads thus:- "124. Issue of show cause notice before confiscation of goods, etc.- No order confiscating any goods or imposing any pe....
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....lear that liability to pay duty arises under Sub-section (2) in addition to the fine under Sub-section(1). Therefore, where an order is passed for payment of customs duty along with an order of imposition of fine in lieu of confiscation of goods, it shall only be referable to Sub-section (2) of Section 125 of the Customs Act. It would not attract Section 28(1) of the Customs Act which covers the cases of duty not levied, short levied or erroneously refunded etc.. The order for payment of duty under Section 125 (2) would be an integral part of proceedings relating to confiscation and consequential orders thereon, on the ground as in this case that the importer had violated the conditions of notification subject to which exemption of goods was granted, without attracting the provisions of Section 28(1) of the Customs Act. A reference may beneficially be made to a decision of this Court reported in Mohan Meakins Ltd. Versus Commissioner of Central Excise, Kochi (2000) 1 S.C.C. 462 wherein it has been observed in Para 6 Therefore there is a mandatory requirement on the adjudicating officer before permitting the redemption of goods, firstly, to assess the market value of the goods and t....
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....at the treatment provided to outdoor patients is 39.8 per cent and instead of 10 per cent indoor patients it is 8.9 per cent. In connection with this submission, it may be observed that this aspect of the matter has been considered by the Commissioner as well as CEGAT in some details and ultimately it has been found that there was a shortfall which is also not disputed by the respondent. A perusal of the condition in the Notification indicates that on an average, at least 40 per cent of all outdoor patients should be provided free treatment. It is, thus, at least 40 per cent or may be above. It is submitted that condition nowhere indicates that within what period, the prescribed percentage is to be achieved. It is submitted that it should be during the life of the equipment imported. Thus, shortfall of particular year may be made good in the following year. We are not impressed by this argument. It would, not at all, be necessary to prescribe any period to achieve the given percentage of patients treated free. It should generally be all through the period. It being at least 40 per cent, there is hardly any occasion to say that in case there is more than 40 per cent in a given perio....