ORDER
Jyoti Balasundaram, Vice-President
1. The above appeals arise out of the order of the Commissioner of Customs Air Cargo Complex by which he has –
(a) Confirmed duty demand of Rs. 7,24,808/- on the appellant hospital.
(b) Confiscated medical equipment imported by the hospital duty free under Notification No. 64/88-Cus., dated 1-3-1988 on the ground of violation of the condition relating to free treatment to indoor as well as out door patient from the hospital, of the table to the notification.
(c) Allowed the redemption of the goods confiscated on payment of fine of Rs. 5,02,095/-.
(d) Imposed penalties of Rs. 2,51,048/- on the hospital and its secretary under Section 112(a) of the Customs Act, 1962.
2. We have heard both sides. The undisputed position is that the hospital was charging Rs. 10/- per OPD Patient for case paper and Rs. 20/- per IPD patient for admission and was also charging Rs. 25/- from indoor patients for X-ray, sonography and other test. As per condition No. 2 of the table annexed to the relevant notification, the hospital is to provide medical/surgical/diagnostic treatment free, on an average, to at least 40 percent of all their outdoor patients and free to all indoor patients belonging to families with an income of less than Rs. 500/- per month, and keeping for this purpose at least 10 percent of all the hospital beds reserved for such patients. The argument of Id. Counsel for the appellants that collection of Rs. 10/- for case paper and Rs. 20/- for admission does not fall within the meaning of provision of free, surgical, medical or diagnostic treatment and therefore there has been no contravention of the conditions of notification, is not tenable for the reason that without the patients being provided case paper (indoor patient) and the patient being admitted (outdoor patient) the question of medical or surgical or diagnostic treatment, does not arise. Therefore the collection of the above mentioned charges would amount to a contravention of the conditions set out at Serial No. 2(a) and (b) of the table to Notification No. 64/88. We therefore hold that hospital was not entitled to import the medical equipment duty free. However, we agree with the appellants that the payment of customs duty as confirmed is required only in the event of their exercising the option to redeem the goods in which case not only redemption fine is required to be paid but also the Customs duty. The penalty under Section 112 on the hospital cannot be set aside entirely in view of our findings on the non-availability of benefit of duty free import. However in the facts and circumstances of the case, we are of the view that the penalty imposed is too high; we reduce it to Rs. 50,000/-. Penalty on Shri Noshir A. Patel Secretary of the Hospital is set aside as there is no evidence on record to show that the ingredients of Section 112(a) of the Customs Act, are made out against him.
3. In the result, Appeal No. C/32/200-Mum. filed by the hospital is partly allowed while Appeal No. C/33/2000-Mum. filed by Mr. Noshir Patel is allowed in full.