Strict compliance with exemption conditions required, as medical equipment importer failed to prove entitlement under either customs notification.

Exemption under customs notification is available only on strict compliance with every prescribed condition, and the claimant bears the burden of proving fulfilment. The imported medical equipment did not qualify under Notification No. 64/88-Cus. because neither the post-import obligations for free treatment and reserved beds nor the required Ministry of Health certification was shown. The alternative benefit under Notification No. 138/88-Cus. also failed because the evidence of eligible import conditions, affidavit, passport proof, and foreign-exchange payment was not produced. Duty demand and denial of exemption were therefore sustained.

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Issues: (i) Whether the imported medical equipment was entitled to exemption under Notification No. 64/88-Cus. dated 1-3-88; (ii) whether the appellants were entitled to the alternative benefit of Notification No. 138/88-Cus. dated 18-4-88.

Issue (i): Whether the imported medical equipment was entitled to exemption under Notification No. 64/88-Cus. dated 1-3-88.

Analysis: The exemption under Notification No. 64/88-Cus. depended on satisfaction of the prescribed conditions in the relevant Table. Under one route, the hospital had to comply with the post-import obligations of providing free treatment to specified categories of patients and reserving beds for indigent indoor patients. Under the other route, the hospital had to establish certification by the Ministry of Health and Family Welfare, having regard to the nature of treatment, geographical situation, or class of patients, that it was run on a non-profit basis and deserved exemption. No material was produced to establish compliance with the post-import conditions, and no requisite certificate from the Ministry was shown.

Conclusion: The appellants were not entitled to exemption under Notification No. 64/88-Cus. The finding was against the assessee.

Issue (ii): Whether the appellants were entitled to the alternative benefit of Notification No. 138/88-Cus. dated 18-4-88.

Analysis: The alternative exemption was also conditional and required compliance with the stipulated requirements regarding payment of CIF cost by an eligible Indian citizen residing abroad, the prescribed affidavit and passport proof, and payment of duty out of remitted foreign exchange, with evidence furnished at the time of importation. No proof was shown that these conditions had been satisfied.

Conclusion: The appellants were not entitled to the benefit of Notification No. 138/88-Cus. The finding was against the assessee.

Final Conclusion: The importers failed to establish compliance with the conditions of either exemption notification, so the demand of duty and denial of exemption were sustained.

Ratio Decidendi: Exemption notifications must be strictly complied with, and the burden lies on the claimant to prove fulfilment of all prescribed conditions before exemption can be granted.

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