Cus - Notification 64/88 - Re-appreciation of evidence on debatable point cannot be said to be rectification of mistake apparent on record - through ROM application, appellant is seeking to take contrary view on a point of law which was considered and disposed of: CESTAT
By TIOL News Service
MUMBAI, MAR 27, 2015: THE CESTAT - 2014-TIOL-2062-CESTAT-MUM while rejecting the appeal had held as under -
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Cus - Notfn. 64/88-Cus - It is a settled position in law that it is for the person who is claiming the benefit of exemption Notification to lead evidence to show that he is entitled for the same - Appellant has completely failed in this regard and the evidence available on record is contrary to the claim of the appellant - Appeal rejected: CESTAT
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Resultantly, a customs duty demand of Rs. 95,92,213/- was confirmed against the appellant apart from confiscation of the imported medical equipment valued at Rs. 1.07 crore with an option to redeem the same on payment of a fine of Rs. 1 lakhs and imposition of a penalty of Rs. 25,000/- for violation of the post importation condition stipulated in notification No. 64/88-Cus dated 1-3-1988 leading to denial of duty exemption under the said notification.
Against this order, the appellant has filed an application for rectification of mistake on the ground that there is an error apparent in the said order.
It is pointed out that the appellant, in their appeal memorandum, had clearly stated that the Commissioner of Customs failed to follow the Madras High Court order in the matter of Apollo Hospital - 2003-TIOL-375-HC-MAD-CUS wherein the High Court had held that after the rescinding of notification No. 64/88-Cus on 1-3-1994, it is not open to the customs authorities to enforce duty liability for non-compliance with the conditions of the said exemption for the period post 1-3-1994. That the Tribunal in Sir H.N. Hospital & Research Centre - 2011-TIOL-111-CESTAT-MUM had followed the decision in the Apollo case and had held that there is no jurisdiction vested with the customs to proceed against the importer on ground of breach of conditions of the said notification post 28-2-1994. Reliance is also placed on the decision of the Bombay High Court in NTB International Pvt. Ltd. - 2014-TIOL-262-HC-MUM-CX wherein it was held that where the findings of a Tribunal are a result of ignoring the facts on record or failing to consider the averments made in the memorandum of appeal, then such an error is an error apparent on record.
The AR submitted that there is no error committed by the Tribunal as contended by the appellant inasmuch as in para 5.2 of the order it has been clearly observed that the question of time-bar for demand of duty will not arise as notification 64/88-Cus imposes a continuing obligation on the importer with regard to the provisions of free medical treatment as held by the apex Court in Jagdish Cancer & Research Centre - 2002-TIOL-119-SC-CUS; that the appellant had executed a bond for complying with the conditions stipulated in notification 64/88-Cus and it is in terms of the provisions of the said bond, the duty can be demanded for violation of the post-importation conditions, even after rescinding of notification 64/88-Cus. It is also submitted that accepting the rectification application would amount to review of the order by the Tribunal &which is not permissible.
The Bench narrated the conditions of notification 64/88-Cus & inter alia observed -
++ When the investigation was conducted to see whether these conditions were complied with, the appellant produced the records of IPD and OPD for the years 1997, 1998 and 1999 which revealed that free treatment was given to OPD patients to the extent of 2.2%, 5.57% and 2.64% for the aforesaid years as against the requirement of 40% stipulated in the notification. Similarly free IPD treatment was found to be 1.2%, 0.36% an 0.81% as against the statutory requirement of 10%. The appellant did not produce any account whatsoever with regard to the compliance of the notification for the previous years. These facts of the case are not in dispute. Therefore, the medical equipment imported by the appellant were confiscated for violation of post importation conditions under section 111(o) of the Customs Act, 1962 with an option to redeem the same on payment of fine under section125 of the Customs Act. As observed by us in para 5.2 of the impugned order, payment of duty under section 125(2) would be an integral part of the proceedings relating to confiscation and option for redemption thereafter.
++ The contention of the appellant that they need not follow the conditions stipulated under notification 64/88-Cus after its rescission is not acceptable for two reasons. The appellant executed an undertaking and a bond at the time of importation while availing the exemption to comply with the terms and conditions of exemption. The said undertaking was not for any particular period or till the rescinding of the notification. The undertaking given is in respect of the goods imported and during the period of its use. Therefore, so long as the goods are in use, the appellant is bound legally to fulfil the terms and conditions of exemption.
Noting that the apex court decision in Mediwell Hospital and Health Care Pvt. Ltd. - 2002-TIOL-69-SC-CUS in this regard was re-iterated in the Jagdish Cancer case which the Bench had relied upon, the CESTAT observed that it had not committed any error while passing the impugned order as the same is based on the Apex Court decision which prevails over all other decisions.
The Bench also took cognizance of the LB decision in Bharat Diagnostic Centre wherein it was held that rescission of Notification does not debar the authorities from taking action against the offenders notwithstanding the fact that detection of the offence was, long after the rescission of the notification& which view was affirmed by the apex court - 2014-TIOL-86-SC-CUS-LB.
The CESTAT, thereafter, concluded thus -
"In view of the factual and legal analysis as above, we are not convinced with the argument of the appellant that there is an error apparent on the face of the record in respect of order dated 17-09-2014 passed by us. It is a settled position in law as held by the hon'ble Apex Court in R D C Concrete (India) Pvt. Ltd. - 2011-TIOL-77-SC-CX re-appreciation of evidence on a debatable point cannot be said to rectification of mistake apparent on record. Mistake apparent on record must be an obvious and patent mistake and mistake should not be established by a long drawn process of reasoning. We are afraid through the present ROM application the appellant is seeking to take a contrary view on a point of law which we have considered and disposed of. Such a course of action is not permissible in law …."
The application for rectification of mistake was dismissed as not maintainable.
In passing: Round two should begin shortly…
(See 2015-TIOL-568-CESTAT-MUM)
