ORDER
G.N. Srinivasan, Member (J)
1. This is an appeal filed by the appellant against the decision of the Collector of Customs-II, Mumbai made in the impugned order captioned above, whereunder, the Collector denied the benefit of Notification No. 64/88-Cus., dated 1-3-1988. The appellant imported Hitachi Magnetic Resonance Imaging System Model MRP-20-2 by filing Bill of Entry No. 3394, dated 3-11-1989 and IGM No. 2789/259, dated 2-11-1989. They also imported spares for medical equipment valued at Rs. 3,54,188, vide B/E No. 1057, dated 3-4-1991 and spares for MRI vide B/E No. 2699, dated 9-6-1991. The appellant claimed benefit of Notification No. 64/88 on the ground that they furnished certificate from DGHS in terms of this notification. The department alleged by its show cause notice dated 11-11-1994 that intelligence was received by the Collectorate that the importers had cleared medical eqipments fraudulently. It is also specifically mentioned that M/s. Paramount Medicos P. Ltd. was a Diagnostic Centre without any indoor bed facility. The show cause notice alleges several other things. It indicated that as to why the duty amount of Rs. 2,25/42,421/- should not be recovered in terms of Section 28 of the Customs Act. The assessee appellant filed reply to the show cause notice and after hearing personally, the Collector at page 13 of the impugned order held that the appellant did not try to defraud the Customs department but yet he held that the MRI equipment and spares were not eligible for exemption and he confirmed the demand under proviso to Section 28(1) of the Act.
2. The ld. Counsel Shri S.N. Kantawala arguing for the appellant, states that it is a fact that they are running diagnostic Centre which he says is a hospital in terms of Notification No. 64/88. He says that the impugned show cause notice does not invoke proviso to Section 28 of the Customs Act, whereas, in the show cause notice it is only mentioned merely Section 28 of the Customs Act, wherein the instant case, the import had taken place in 1991 and the show cause notice has been given in 1994 and it is hit by limitation. He also emphasised the fact that unless there is a specific allegation of fraud, mis-declaration, collusion, the larger period of limitation could not be invoked. He also specifically stated that even if, for assuming without admitting, the larger period of limitation is invoked, for invoking the term fraud, the finding given by the Collector at page 13 viz., the appellant did not try to defraud the Customs department would go to show that there was no fraudulent action or intention on the part of the appellant to defraud the Government. He, therefore, submitted that the claim made by the department is squarely hit by limitation.
3. As against this the ld. DR adopted the reasonings in the impugned order.
4. We have considered the rival submissions. In the impugned order at para 13, the Collector has held as follows :
“Dr. Shah had emphasised that they have acted bona fides, obtained all the necessary certificates from the concerned authorities and produced all the documents to the Customs authorities for their satisfaction before grant of exemption. They have been unfailingly providing free treatment to at least 40% of the patients for past 5 years or so and continue to do so. Now since last year Central Government has totally exempted MRI equimpment unconditionally and hence the new comers are under no obligation and it creates an unfair competition. I find force in these arguments of Dr. Shah. They face an uneven competition with new comers as they are not obliged to follow any socially beneficial conditions like free treatment, etc. Also they did not try to defraud the Customs Department. They obtained necessary certificates from the concerned health authorities. They also have a tie up with Ruxmani Lying-in Hospital. In fact bed facility for this kind of diagnostic centre is not required. These facts will justify a sympathetic and lenient view to waive fine and penalty but they will not constitute legal ground for waiving of customs duty as the conditions of the notification are not fulfilled.”
5. In the show cause notice, the Collector has not specifically invoked the proviso to Section 28. But if we interpret term 28, we can explain the term 28 to include Section 28 viz., proviso to Section 28 as well. In para 3 of the show cause notice, there is a specific reference to the term ‘fraudulently’ therein. In the said paragraph it is stated “an intelligence was received by this Collectorate that the importers had cleared the aforesaid medical equipments fraudulently without payment of Customs duty”. It is possible for us to hold that Section 28 may include the entire provisions of Section 28 including the proviso thereof. The term fraudulently in paragraph 3 of the show cause notice may only indicate the views of the intelligence unit. Assuming for one moment, the term fraudulently is used for the benefit of the department, even then, can we held against the appellant? In our view, we cannot hold against the appellant. In para 13 of the order, the Collector specifically held that the appellant did not try to defraud the Customs department. When we look into the finding given by the Collector, we are of the view that facts found by the Collector cannot be questioned as there is no appeal filed by the department against such a finding. Hence, plea of invoking of larger period cannot be upheld. We are, therefore, of the view that the department has not made out any case. Hence, the appeal is allowed with consequential relief if any permitted by law.