Exemption certificate enforcement requires due process before seizure or confiscation of imported medical equipment.

Medical equipment imported under an exemption notification could not be seized and confiscation proceedings could not be sustained while the exemption certificate remained valid and uncancelled. The court held that a continuing condition of exemption may be enforced only after the competent authority examines the alleged breach and follows due procedure, including notice of violation and, where applicable, demand of customs duty. Because no cancellation, completed inquiry, or duty demand was shown, the seizure was unlawful. The impugned order was set aside and the equipment was directed to be released.

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Issues: Whether medical equipment imported under an exemption notification could be seized and confiscation proceedings initiated without first cancelling the exemption certificate or following the procedure for demanding customs duty for alleged violation of the continuing conditions of exemption.

Analysis: The appellant had imported medical equipment under an exemption notification and possessed a valid certificate that had not been withdrawn or cancelled. The Court held that the benefit of the exemption carried a continuing obligation, but enforcement required the competent authority to first examine the alleged breach and proceed in accordance with law. In the absence of cancellation of the certificate, notice of violation, or demand for customs duty, the seizure could not be sustained. Reliance on the departmental communication concerning inquiry under the Rosha Committee did not assist the respondents because no completed inquiry was shown. The Court also noted that the authorities were bound by the legal position that, upon breach of continuing conditions, the proper course was to require payment of duty after following due procedure.

Conclusion: The seizure was unlawful and the impugned order was liable to be set aside. The seizure stood quashed and the equipment was directed to be released to the appellant.

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