2008 (10) TMI 56 - HC - Customs

Customs Duty Exemption Category Challenge Denied

DR. BALABHAI NANAVATI HOSPITAL Versus COMMISSIONER OF CUSTOMS

The High Court Bombay rejected the appellant's challenge of Customs Duty Exemption Certificate categorization and application for a change from category 2 ... Customs Duty Exemption Certificate from the DGHS for import of various hospital equipments - categorisation of the appellant under category 2 of the table annexed to Notification No.64/88- Cus., was cancelled - impugned petition challenging the cancellation, and applying for change of classification from category 2 to 1 – held that, after a hospital ceases to be entitled to the exemption, because of the cancellation of the categorisation, there is no question of changing the category Issues:1. Challenge of Customs Duty Exemption Certificate categorization.2. Application for change of classification from category 2 to 1.3. Interpretation of Supreme Court judgments on categorization change eligibility.Analysis:1. The appellant challenged the cancellation of their categorization and applied for a change from category 2 to 1 after obtaining a Customs Duty Exemption Certificate. The appellant argued that they were not estopped from applying for the change, citing a Supreme Court judgment in Share Medical Care case. However, the Supreme Court in Jaslok Hospital case held that a hospital must be categorized in some category at the time of applying for a change. The court noted that as there was no challenge to the cancellation and no interim order in effect, the cancellation had taken effect. The court emphasized that a change can only be made to a live categorization, and since the appellant was no longer entitled to the exemption due to cancellation, a change in category was not possible.2. The distinguishing feature between the appellant's case and the Jaslok Hospital case, as argued by the appellant's counsel, was that the cancellation was challenged in the present case, and an application for change was made immediately after. However, the court held that these features were not determinative. The Supreme Court's ruling in Jaslok Hospital case made it clear that a hospital must be categorized at the time of applying for a change. The court highlighted that the Supreme Court's decision in Jaslok Hospital case superseded the Share Medical Care case, as it was a judgment by a Larger Bench. Therefore, the court concluded that the law laid down by the Supreme Court in Jaslok Hospital case must be followed.3. Ultimately, the court found no substance in the appeals and rejected them based on the interpretation of the Supreme Court judgments and the specific circumstances of the appellant's case. The court's decision was based on the principle that a change in category can only be made when the hospital is categorized at the time of application, emphasizing the importance of a live categorization for eligibility for a change in classification.This detailed analysis of the judgment highlights the key legal issues addressed by the High Court Bombay in relation to the challenge of Customs Duty Exemption Certificate categorization and the application for a change in classification, providing a comprehensive understanding of the court's reasoning and decision based on relevant legal precedents.