Customs exemption for hospital medical equipment upheld; Foley's Catheter not treated as a consumable item.

Notification No. 63/88-Customs was held applicable to Foley's Catheter imported for supply to a government hospital, because the prescribed certificate and hospital endorsement showed the goods were meant for hospital use and the exemption was not limited to direct imports by the hospital. The item was also not excluded as a consumable, since consumables were understood in their ordinary sense as items used up in the course of use or manufacture, and Foley's Catheter had been treated as life-saving equipment rather than a mere disposable article. The denial of exemption was therefore set aside and the appeal succeeded.

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Issues: (i) whether Foley's Catheter imported for supply to a government hospital satisfied the conditions of Notification No. 63/88-Customs; (ii) whether the goods were excluded from the notification as consumable items.

Issue (i): whether Foley's Catheter imported for supply to a government hospital satisfied the conditions of Notification No. 63/88-Customs.

Analysis: The notification exempted hospital equipment, apparatus and appliances, subject to production of the prescribed certificate and certification by the head of the hospital. The certificate issued by the Directorate General of Health Services and the endorsement of the hospital showed that the goods were imported for supply to a government hospital. The notification was not confined to goods imported directly by the hospital, and the expression "hospital" was broad enough to cover the concerned institution.

Conclusion: The condition regarding hospital use was satisfied and the denial of benefit on that ground was unsustainable.

Issue (ii): whether the goods were excluded from the notification as consumable items.

Analysis: The term "consumable" was not defined in the notification and had to be understood in its ordinary sense, read with the settled meaning adopted in prior decisions. Foley's Catheter had already been treated in earlier authorities as a life-saving equipment, and consumable items were understood as articles used up in the course of use or manufacture, such as chemicals, and not merely articles that are disposable or not highly durable. On that footing, the goods could not be classified as consumables so as to defeat the exemption.

Conclusion: The goods were not consumable items and were eligible for the exemption.

Final Conclusion: The denial of exemption was set aside and the appeal succeeded.

Ratio Decidendi: Where exemption notification conditions are met and the imported medical item has already been recognised as a life-saving equipment, it cannot be denied exemption merely by labelling it a consumable unless the notification clearly so provides.

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