Durgabai Deshmukh Hospital & Research Centre Vs Commissioner of Customs (CESTAT Hyderabad)
The appeal before the CESTAT Hyderabad challenged the Order-in-De Novo dated 20.05.2013, whereby the adjudicating authority confirmed the demand of customs duty, ordered confiscation of imported medical equipment under Section 111(o) of the Customs Act, 1962, and imposed redemption fine and penalties. The appellant had imported various medical equipment during 1990 to 1993 without payment of customs duty by claiming exemption under Notification No. 65/88-Cus. on the strength of Customs Duty Exemption Certificates (CDECs) issued by the Director General of Health Services (DGHS). The exemption was subject to post-import conditions requiring, among other things, free treatment to specified categories of outdoor and indoor patients and reservation of hospital beds for economically weaker sections.
The DGHS subsequently cancelled the CDECs by communication dated 02.02.2001 on the ground that the appellant had failed to fulfil the mandatory conditions attached to the notification. Customs authorities thereafter initiated proceedings to recover the customs duty foregone and confiscate the imported goods. Following earlier rounds of adjudication and remand by the Tribunal, the adjudicating authority again confirmed the duty demand, confiscation, redemption fine and penalties, leading to the present appeal.
The appellant contended that the adjudicating authority had relied solely on the cancellation of the CDECs without independently establishing violation of the notification conditions. It argued that substantial compliance with the notification had been achieved and that the findings regarding non-fulfilment were based on assumptions and incomplete verification. The appellant further claimed that, even if the benefit of Notification No. 65/88-Cus. was unavailable, the imported goods were independently eligible for exemption under Notification Nos. 65/88-Cus. and 208/81-Cus. It submitted that components, accessories and spare parts imported separately formed integral parts of the specified medical equipment and should also receive exemption.
