ORDER
V.K. Agrawal, Member (T)
1. In this appeal, filed by M/s. Choithram Hospital & Research Centre, the issue involved is whether the benefit of Notification No. 64/88-Cus dated 1.3.1988 is available to the goods imported by them.
2. Sh. A. Upadhyay, learned Advocate, submitted that the appellant is a Registered Charitable Trust and is running a hospital on no profit no loss basis; that they had imported certain medical equipments after availing the benefit of Notification No. 64/88-Cus dated 1.3.1988 and after obtaining the Customs Duty Exemption Certificate and Customs Clearance permit from the Director General of Health Services; that the Commissioner, under the impugned order, has confirmed the demand of duty besides confiscating the equipments and imposing penalty on the ground that the condition of the Notification regarding providing free treatment to the patients, has not been complied with by them. He, further, submitted that para 2 of the Table annexed to the Notification is not applicable to them as they are covered by para 3 of the Table annexed to the Notification; that, according to para 3, any hospital in respect of which the Ministry of Health and Family Welfare may, having regard to the type of medical, surgical or diagnostic treatment available there, or the geographical situation thereof, or the class of patients for whom the medical, surgical or diagnostic treatment is being provided, certify either generally or in each case, that the hospital, even though it makes a charge for the said treatment, is nevertheless run on non-profit basis and is deserving exemption from the payment of duty on the said hospital equipment, provided the equipment is imported by the hospital by way of free gift from donner abroad or has been purchased out of the donations received abroad in foreign exchange; that they had imported the equipments, in question, from the funds received as gifts from doners abroad in foreign exchange; that in support of their contention they had filed FC-3 return along with FC-9 Certificate duly issued by the Chartered Accountant which shows that they had imported the equipments from the funds received as donations in foreign exchange from abroad; that, accordingly, all the condition to be fulfilled by them for claiming the benefit of Notification No. 64/88-Cus.
3. Alternatively, the learned Advocate, contended that they are entitled for concessional rate of duty prescribed under Notification No. 138/88-cus dated 18.4.1988. He relied upon the decisions in the case of Polydyne Corporation v. CCE, Mumbai , and Decora Ceramics Pvt. Ltd. v. CCE, Rajkot wherein it has been held by the Tribunal that the assessee is entitled to question the rate of duty originally applied when assessment is reopened and differential duty is demanded from him.
4. Countering the arguments, Sh. Kumar Santosh, learned S.D.R., submitted that the benefit of para 3 of the Table to the Notification No. 64/88, is available only to those hospitals in respect of which the Ministry of Health and Family Welfare issued a certificate on the basis of treatment available there, or the geographical situation or class of patients to be treated; that they had not applied to the Director General of Health Services for Customs Duty Exemption Certificate in terms of para 3 of the Table to the Notification nor any requisite certificate was taken by them from the Ministry of Health and Family Welfare; that in view of this, the benefit of para 3 of the Table cannot be extended to them. He also mentioned that in all applications made by them for Customs Duty Exemption Certificate, they had declared that the hospital was treating more than 40 per cent of the out door patients free and also reserving 10 per cent of all the hospital beds for the patients in terms of para 2 of the Table to the Notification; that as they have not fulfilled the conditions specified in para 2 of the Table, the benefit has been rightly denied to them. He, finally, mentioned that the benefit of Notification No. 138/88-Cus, claimed alternatively by the appellants, is also not available as the conditions specified in the said Notification have not been fulfilled by them.
5. We have considered the submissions of both the sides. Notification No. 64/88-Cus exempts all equipments, apparatus and appliances, if the import has been approved by the Ministry of Health & Family Welfare or by the Director General of Health Services as essential for use in any hospital specified in the Table given below the Notification. The appellants had imported the medical equipments and availed the benefit of the Notification on the undertaking that they will fulfill the post-import conditions contained in para 2 of the Table. As per para 2, the hospital has to provide treatment not only without any distinction of caste, cread, race, religion or language but also – (a) free, on an average, to at least 40 per cent of all their outdoor patients; and (b) free to all indoor patients belonging to families with an income of less than rupees five hundred per month and keeping for this purpose at least 10 per cent of all the hospital beds reserved for such patients. As this post-import condition was not fulfilled by them, the Adjudicating Authority has denied the benefit of Notification and demanded the appropriate customs duty from them. Nothing has been brought on record before us also to show that the conditions contained in para 2 of the Table of the Notification have been complied with. Accordingly, we hold that the appellants have not established the fulfilment of post-import conditions contained in para 2 of the Table to the Notification No. 64/88-Cus. They have claimed that instead of para 2, their case falls within para 3 of the Table which exempts import of medical equipments if these are imported by way of free gift from donner abroad or had been purchased out of donations received abroad in foreign exchange. The appellants claim that they have submitted the requisite certificate from their Chartered Accountant in support of their contentions that they have received donations from abroad and these equipments had been purchased out of the said donations. However, the appellants have not brought on record a certificate from the Ministry of Health and Family Welfare permitting them the import of the medical equipments after availing the benefit of exemption under Notification No. 64/88-Cus. As per para 3 of the Table to the Notification, conditions require that the Ministry of Health and Family Welfare, may, having regard to the type of medical, surgical or diagnostic treatment, available there, or the geographical situation thereof, or the class of patients for whom the treatment is provided, may certify that the hospital is running on non-profit basis and is deserving all exemption from the payment. In absence of any such certificate, the appellants cannot be extended the benefit of Notification in terms of para 3 of the Table. Accordingly, we hold that the appellants are not eligible for exemption under Notification No. 64/88-Cus.
6. The appellants have, alternatively, claimed the benefit of Notification No. 138/88-Cus dated 18.4.1988, which also provides partial exemption to the equipments specified in the Table annexed to the Notification. We observe the partial exemption from payment of duty under Notification No. 138/88-Cus is available subject to the conditions specified in the Notification itself. According to the conditions specified in the Notification, CIF cost of the goods shall be paid for by an Indian citizen residing abroad for a minimum period of one year immediately preceding the shipment of the said goods and he affirms on oath before a Notary of the country where he is residing that he has been residing there fore a minimum period of one year and produces such an affidavit before the Assistant Collector of Customs along with a photo copy of his passport at the time of clearance. The other condition of the Notification is that the customs duty payable on the said goods shall be paid from the proceeds of foreign exchange remitted into India by such Indian citizen. The last condition of the Notification is that the evidence regarding compliance of first two conditions is produced to the Assistant Collector of Customs at the time of importation. There is nothing on record to show that these conditions, stipulated in Notification No. 138/88-Cus, have been complied with by the appellants. The benefit of Notification can be extended only when the conditions specified therein are complied with. In absence of any proof regarding compliance of the conditions, the appellants are not eligible to get the benefit of Notification No. 138/88. Accordingly, we reject the appeal.
(Operative part of order pronounced in open Court on 10.9.2004).