Exemption under hospital import notification upheld where available records showed compliance and later verification gaps were not decisive.

Notification No. 64/88-Cus. required a certified hospital to provide free treatment to specified outdoor and indoor patients, charge reasonable rates to others, and install the imported equipment; it did not impose the additional register-maintenance requirements later insisted upon by the department. On the material produced, including certificates, an installation certificate and affidavit evidence, the importer showed compliance, and the department did not establish that the equipment was not installed or used for the intended purpose. The inability to verify compliance at a much later stage, without proof of a further statutory record-keeping duty, was insufficient to deny the exemption. Denial of the exemption was therefore not justified.

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Issues: Whether the appellant was entitled to the exemption under Notification No. 64/88-Cus. dated 01.03.1988 and whether alleged non-availability of original hospital records and inability to verify post-import conditions justified denial of the exemption and consequential duty, fine, and penalty.

Analysis: The Notification required a certified hospital to provide free treatment to the stipulated percentage of outdoor patients, free treatment to indoor patients meeting the income criterion, reasonable charges to others, and installation of the imported equipment. It did not prescribe maintenance of the particular registers demanded by the adjudicating authority. The record showed that the appellant had produced statements, certificates, an installation certificate, and sworn affidavit evidence, and the Department did not establish that the equipment was not installed or used for the intended purpose. The inability to verify compliance at a much later stage, by itself, was held insufficient to deprive the importer of the exemption where the available material supported compliance and no additional statutory record-keeping obligation had been shown.

Conclusion: The appellant satisfied the conditions of the exemption notification on the material available, and denial of the exemption was not justified.

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