Hospital exemption for imported medical equipment denied where the centre functioned only as a diagnostic unit and lost eligibility.

A diagnostic centre did not qualify as a hospital for exemption under Notification No. 64/88-Cus. because it was not equipped to treat inpatients or outpatients, and the associated hospital had effectively ceased functioning. The decline in free medical check-up activity and withdrawal of the exemption certificate by the health authority meant the importer no longer satisfied the notification conditions. On that basis, the imported CT scanner was liable to confiscation for breach of the exemption terms, and the redemption fine was not shown to be excessive.

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Issues: Whether the imported CT scanner was eligible for exemption under Notification No. 64/88-Cus. on the footing that the appellant's institution was a hospital, and whether confiscation and redemption fine were sustainable.

Analysis: The institution was found to be only a diagnostic centre and not equipped to handle inpatients or outpatients. The finding that free medical check-up activity had declined substantially and that the associated hospital had remained closed supported the conclusion that the appellant was not running a hospital within the meaning of the notification. A diagnostic centre does not qualify as a hospital for the purpose of the exemption. Once the Directorate General of Health Services withdrew the exemption certificate, the appellant ceased to be eligible for the benefit. The imported equipment was, therefore, liable to confiscation for breach of the notification conditions, and the redemption fine was not shown to be excessive.

Conclusion: The appellant was not entitled to exemption under Notification No. 64/88-Cus., and the confiscation with redemption fine was upheld.

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