St. Stephens Hospital vs CC, Delhi

Appeal has been filed against order-in-original dated 30.01.2006 in terms of which customs duty demand of Rs.36,91,763/- was confirmed, the

impugned goods were confiscated and allowed to be remeemed on fine of Rs.1 lakh and penalty of Rs.10,000/- was also imposed.

The facts of the case are as under:

The appellant imported medical equipment under two bills of entry claiming benefit of Customs Notification No.64/1988-Cus. dated 01.03.1988 which

was granted on the basis of Customs Duty Exemption Certificate (CDEC) issued by Directorate General of Health Service (DGHS). The said

notification exempted medical equipment from whole of Customs duty and CVD when imported by certain categories of hospitals, subject to

production of CDEC issued by DGHS, alongwith certain other conditions.

When the case was called today, there was no representation on behalf of the appellant nor has there been any request for adjournment.

Accordingly, we proceed to decide the case on merit. In its appeal the appellant has contended that it had treated patents free upto the level

prescribed in Notification No. 64/1988.

Ld. DR has contended that the issue is squarely covered by the judgment of the Hon'ble Supreme Court in the case ofB harat Diagnostic Centre

vs. Commissioner of Customs - 2014 (307) ELT 632 (SC) adding that in this case the DGHS withdrew the CDEC vide its letter dated 04.04.2001 as a

result of which the appellant no longer remained eligible for the benefit of Notification No.64/1988.

We find that CESTAT had earlier remanded this case for denovo adjudication after reverifying the data (now) furnished by the appellant regarding

free treatment of the patients and the Commissioner vide the (denovo) impugned order came to the same finding and passed similar order as was

passed earlier on 17.08.2004. However, this aspect does not remain of much significance in the light of the fact that the Supreme Court in the case of

Bharat Diagnostic Centre (supra) has since held as under:

Thereafter, the Custom Authorities issued a demand notice directing the appellant to pay the customs duty, which may have been for

some other reasons including the withdrawal of the exemption certificate by the DGHS. We cannot take exception to the demand so made by

them for the simple reason that the appellant would be eligible for exemption from payment of duty only if it had obtained an exemption

certificate from the DGHS. If the foundation on which the appellant was entitled to claim exemption, i.e. the exemption certificate before the

Customs Authorities was withdrawn by the competent authority, the natural consequences must follow, that being the non applicability of the

exemption from custom duty. As a consequence of the absence of a valid exemption certificate, the appellant would be liable to pay

appropriate custom duty.

In the instant case, the OGHS duly issued an exemption certificate but subsequently the same was withdrawn by the same authority. If

for any reason the appellant was aggrieved by such withdrawal, it should have questioned the same. Since having questioned the said

withdrawal and having withdrawn, it later on, we are of the opinion that the appellant cannot take exception to the duty demand made by

the respondent"".

Thus, the issue is no longer res-integra and is squarely covered against the appellant by the judgment of Supreme Court in the case of Bharat

Diagnostic Centre as in this case also CDEC was withdrawn by DGHS. Therefore, we do not find any infirmity in the impugned order. The appeal is

rejected.