Per Gowri Shankar : The application is for waiver of deposit of Rs. 5.16 lakhs and penalty imposed under Section 112(a) of the Act of Rs. 50,000/-.

2. In the order impugned in the appeal, the Commissioner has demanded the duty on the medical equipment imported by the applicant by claiming the benefit of the exemption contained in Notification 64/88, on the ground that the conditions subject to which the exemption is granted, relating to specified number of pre-treatment of inpatients and outpatients, have not been complied with.

3. Counsel for the applicant contends that the notice issued to it did not demand payment of duty and therefore there is no basis for the duty. He relies upon the judgment of the Supreme Court in Metal Forgings Vs. UOI 2002 (53) RLT 507 (SC)=2002 (146) ELT 241 in respect of the proposition that a notice must specifically mention the amount of duty demanded, and the basis for the demand. He however brings to our notice an order passed by a bench of court III in Mumbai of this Tribunal in which in respect of the same hospital, and a similarly worded notice, full deposit of the duty has been ordered.

4. The departmental representative contends that the intention in the notice to pay duty is clear and refers to fraudulent activities of the applicant from which it would be clear that it was demanding duty. The annexure to the notice also refers to duty.

5. We are prima facie unable to accept this submission. The annexure to the notice only contains the list of documents relied upon, and has nothing further. Numerous paragraphs of the notice referred to the investigations focussing upon the number of inpatients and outpatients who were treated, etc. Paragraph 18, which summarises the conclusion, states that the importer has wilfully suppressed the facts of non-fulfilment of the conditions of Notification 64/88 and goes on to say that the importer contravened the provisions of Section 111(o) rendering the goods liable to confiscation; render them to penalty under Section 112 and 114(A) of the Act, and Director General of Health Services in collusion with the importer has aided in abetting and defrauding the customs duty of Rs. 5.16 lakhs approximately. Paragraph 19 proposes confiscation of medical equipment under clause (o) of Section 111; penalty on the hospital under Section 112(A) and penalty on the Director General of Health Services under Section 112 of the Act.

6. It would therefore be possible to take a view that the allegations relating to the fraudulent acts of the applicant made with a view to support the proposal contained in paragraph 19 for penalty. Such allegation would in any case be made for this purpose. If the intention were to demand duty, it was the simple matter to incorporate sub-paragraph and paragraph 19 specifically asking for payment of duty. Since this has not been done, that omission cannot now be made.

7. We have carefully studied the said order passed by court III of the bench. This decision relies upon the judgment of the Supreme Court in Mediwell Hospital and Healthcare Pvt. Ltd. Vs. UOI 1996 (17) RLT 1111 (SC)=1997 (89) ELT 425 to deal with the point that was raised before us that there was no specific demand for duty. The Supreme Court's judgment provides that "coercive action has to be taken in case of default in fulfilling the conditions subject to which the customs duty exemption has been granted under the said Notification 64/88." With great respect, we are not able to find anything in Mediwell Hospital and Healthcare Pvt. Ltd. which leads to the view that while taking action against a hospital which had not complied with the conditions of the Notification 64/88, the provisions of law are not required to be complied with. This judgment, for example, would not support a view that, because the hospital has not complied with the provisions of law, the goods imported by it can be seized and sold by officers without issue of notice. It is well settled, over the long period of t