Research institution exemption for imported medical equipment upheld; service charges alone did not make the institution commercial.

Imported medical equipment qualified for exemption under the research-institution notifications because the importer was a recognised research institution engaged in cardiac research and registered with the competent scientific authority. Collection of charges for treatment or diagnosis did not, by itself, make the institution commercial, as commercial activity has a distinct legal meaning and the institution operated on a no profit, no loss basis. The exemption was therefore available and denial of the benefit was unsustainable.

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Issues: Whether the imported medical equipment was eligible for exemption under the research-institution notifications, and whether collection of charges for treatment or diagnosis rendered the institution engaged in commercial activity so as to deny the benefit.

Analysis: The appellants were found to be a research institution carrying on research in cardiac diseases and disorder and registered with the competent scientific authority. The condition relating to import by a research institution was therefore satisfied. As to the collection of fees, mere charging of some amount for services did not by itself convert the institution into a commercial institution, since commercial activity carries a different legal connotation. The institution's stated no profit no loss basis also supported the absence of commercial character.

Conclusion: The benefit of the exemption notifications was available to the appellants and the denial of exemption was unsustainable.

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