Research institution exemption upheld for imported scientific equipment; reimbursement fees did not amount to commercial activity.

Notification No. 70/81 exempted scientific and technical instruments imported by a certified research institution where the prescribed certificate confirmed that the import was essential for research and that the institution was not engaged in commercial activity. Charging fees only to recover expenses did not amount to commercial activity, and Customs could not disregard the certificate in the absence of evidence. The notification also made no distinction between publicly funded and privately funded research institutions. On that basis, the imported super vacuum packing machine qualified for exemption.

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Issues: Whether the imported super vacuum packing machine was entitled to exemption under Notification No. 70/81 when the institution was certified as a research institution not engaged in commercial activity, and whether charging fees for services or the distinction between public-funded and private research institutions could defeat the exemption.

Analysis: The exemption under Notification No. 70/81 applied to scientific and technical instruments imported by research institutions, subject to the prescribed certificates. The notified certificate stated that the institution was a research institution, that the import was essential for research, and that the institution was not engaged in commercial activity. The charging of fees merely towards reimbursement of expenses did not amount to commercial activity. In the absence of evidence from the Revenue, the Customs authorities could not disregard the notified certificate or deny the claim on the basis that the goods were not scientific and technical instruments. The notification also did not draw any distinction between public-funded and privately funded research institutions.

Conclusion: The exemption was available and the Revenue's challenge failed.

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