[ORDER PER: ANGAD PRASAD]

M/s Durgabai Deshmukh Hospital & Research Centre (hereinafter called appellant) has filed this appeal against the Order-in-De Novo No. 6/2012-Adjn (Cus)(Commr) Hyderabad dated 20.05.2013 (impugned order).

2. The fact, in brief, is that the appellant imported various medical equipments during the period 1990 to 1993 without payment of Customs Duty by claiming exemption under Notification No. 65/88-Cus. dated 01.03.1988 on the strength of Customs Duty Exemption Certificates (CDECs) issued by the Director General of Health Service (DGHS). The Bills of Entry were assessed extending the benefit of the notification subject to fulfillment of the conditions prescribed therein. The exemption under Notification No. 65/88-Cus. was available to hospitals subject to certain post-importation obligations, inter alia, providing free treatment of an average to 40% of outdoor patients and providing free treatment to all indoor patients becoming to weaker sections whose family income was below the prescribed limit, while reserving at least 10% of hospital beds for such patients.

3. Subsequently, the DGHS, vide communication dated 02.02.2001, cancelled the CDECs issued to the appellant on the ground that the appellant had failed to fulfill the mandatory conditions attached to the notification. Pursuant thereto, proceedings were initiated by the Customs Authorities for recovery of Customs Duty foregone and for confiscation of the imported goods.

4. The matter travelled through several rounds of adjudication and appellant proceedings. In an earlier round, the Tribunal remanded the matter for fresh consideration, including examination of the appellant’s claim regarding alternative exemption notifications. Thereafter, the Adjudicating Authority again adjudicated the matter and confirmed the demand of Customs Duty, ordered confiscation of the imported goods under Section 111(0) of the Customs Act, 1962 with an option of redemption on payment of fine, and imposed penalties.

5. Aggrieved by the said order, the present appeal has been filed.

6. The Learned Counsel for the appellant submits that the impugned order legally unsustainable as the Adjudicating Authority has proceeded merely on the basis of cancellation of CDECs without independently establishing valuation of the notification conditions. It is further submitted that the appellant is a reputed hospital serving the public and substantial compliance of the notification conditions stood established. The findings regarding non-fulfillment are based on assumptions and incomplete verification.

7. The Learned Counsel further submits that even assuming without admitting that the benefit of Notification No. 65/88-Cus. is unavailable, the imported goods are independently entitled to exemption under Notification Nos. 65/88-Cus. and 208/81-Cus. The Tribunal, in the earlier round, had specifically remanded the matter for exemption of this issue. However, the Adjudicating Authority has rejected the claim by adopting a hyper-technical interpretation of the exemption notifications. It is contended that the imported components, Accessories and Spare parts are integral and essential parts of the specified medical equipment and, therefore, cannot be denied the benefit merely because they were imported separately.

8. Learned Counsel for the appellant has relied on the following decisions:

i) Imperial Surgical Co. (P) Ltd., Vs Collector of Customs, Bombay [1998 (100) E.L.T. 428 (Tribunal)]

ii) Collector of Customs, Madras Vs Dasappa Dharmaspatre [1999 (109) E.L.T. 884 (Tribunal)]

iii) Ankita Tax-Chem Industries Pvt Ltd., Vs Union of India [2005 (184) E.L.T. 18 (Guj.)]

iv) Jindal Dye Intermediate Ltd., Vs Collector of Customs, Mumbai [2006 (197) E.L.T. 471 (S.C.)]

9. The Learned Authorized Representative for the revenue reiterates the findings, inter alia, submitted that the very foundation for availing the exemption under Notification No. 65/88-Cus. stoo