TaxTMI 
TaxTMI 
2006 (3) TMI 64
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, Maharashtra. The said application was processed at various levels and ultimately on 7th September, 1989 the Director General of Health Services, New Delhi granted certificate to the petitioner for the benefit of the Notification Nos.279/83-Cus dated 1st March, 1983 and No.63/88-Cus dated 1st March, 1988. (iii) Pursuant to the import licence dated 17th December, 1985 and the certificate issued by the Director General of Health Services, New Delhi regarding satisfaction of the conditions of the Notification Nos.279/83 and 64/88, the petitioners imported one MRI machine in part shipments and cleared the same for home consumption after filing four bills of entry (No.1948 dated 12^th March, 1987 and Nos.122 & 123 dated 2^nd May, 1988 and 11832 dated 30^th May, 1988). (iv) The petitioners applied for exemption under the Notification Nos.279/83 and 64/88. The MRI machine was allowed clearance at nil rate of duty. 4. By the show cause notices dated 14thDecember, 1992, 5th June, 1993 and 10th November, 1993, the petitioners were called upon to show cause as to why the duty amounting to Rs.3,82,47,105/- be not levied and recovered for non-levy of the duty and why the MRI machine ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1^st March, 1988 came to an end on 1^st March, 1994 and that brought to an end any liability of the petitioners in fulfilling the condition 2(b) of the said notification. According to him, Section 6 of the General Clauses Act has no application. 10. In support of his contentions, Mr. Baya relied upon the judgment of the Supreme Court in the case of Mediwell Hospital and Health Care Pvt. Ltd. v. Union of India, 1997 (89) E.L.T. 425 (S.C.) and the judgment of the Madras High Court in the case of Apollo Hospitals Enterprises Ltd. v. Union of India, 2001 (133) E.L.T. 58 (Mad.). 11. On the other hand, Mr. A.J. Rana, the learned senior counsel for the respondents justified the impugned order. The learned senior counsel would submit that on the basis of the declarations made in the bills of entry; the certificate issued by the Director General of Health Services and the endorsement to the effect that the items mentioned therein are essential and exempted from payment of customs duty in terms of the Notification No.64/88-Cus dated 1^st March, 1988, clearance was allowed. However, later on it was found that the first petitioner does not have any bed facility for inpatients and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itable) subject to certification from Director General of Health Services when such equipments / apparatus / appliances were essential for the use in the hospitals specified in the table and upon fulfilment of conditions mentioned therein. 16. Para 2 under the table of the Notification No.64/88-Cus dated 1st March, 1988, reads thus : "2. All such hospital which may be certified by the said Ministry of Health and Family Welfare, in each case, to be run for providing medical, surgical or diagnostic treatment not only without any distinction of caste, creed, race, religion or language but also:- (a) free on an average, to at least 40 per cent of all their outdoor patients; and (b) free to all indoor patients belonging to families with an income of less than rupees five hundred month, and keeping for this purpose at least 10 per cent of all the hospital beds reserved for such patients; and (c) at reasonable charges either on the basis of the patients concerned or otherwise to patients other than those specified in clauses (a) and (b)." 17. The challenge to para 3(b) of Notification No.279/83-Cus dated 1^st March, 1983 and para 2(b) of the Notification No.64/88-Cus dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Rs.500/- per month and for this purpose at least 10% of hospital beds shall be kept reserved, we are of the view that it is not open to the petitioners to challenge the constitutional validity of clause 3(b) and 2(b) of the abovereferred notifications respectively. 19. Even otherwise, looking to the nature of the benefit granted under the notifications whereby the Central Government exempted basic import duty and the additional duty on medical diagnostic equipments and surgical equipments, we find nothing unreasonable on the part of the Central Government to impose condition for the exemption that free medical treatment to all the families with an income of less than Rs.500/- per month shall be given and reservation of at least 10% hospital beds for such inpatients shall be made. The condition imposed in para 3(b) of the notification No.279/83 and para 2(b) of Notification No.64/88 is reasonable and has nexus to the object sought to be achieved. By no stretch of imagination, the said condition can be said to be irrational, arbitrary, unreasonable or bereft of reason. The contention (a) of the learned counsel for the petitioners is, accordingly, rejected. Re : Contention (b)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ustoms duty is only available upon fulfilment of the conditions stipulated in the notifications. The diagnostic centres (for the purpose of notification deemed to be 'Hospital') which do not have the facility for inpatients as stipulated in para 2(b) of Notification No.64/88-Cus dated 1^st March, 1988, cannot get the benefit of exemption under the said notification. The whole argument of the learned counsel for the petitioner in pressing into service the legal maxim LEX NON-COGIT AD IMPOSSIBILIA and the submission that the diagnostic centre cannot meet the criteria of reservation of beds is wholly misconceived. But for the exemption Notification No.64/88, the duty was payable on the import of MRI machine by the petitioners. For getting the benefits of the exemption notification, the first petitioner has to fulfil the conditions of the said notification. If it cannot, it has to pay the duty. Re : Contention (d) 23. It is contended that the imported machines have been installed in the premises of the Breach Candy Hospital and Research Centre as per the agreement dated 2nd July, 1987 and that the said Breach Candy Hospital and Research Centre satisfies the condition of the notif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rmissible. Whatever arrangement or agreement the first petitioner may have had with the Breach Candy Hospital and Research Centre, such arrangement or agreement shall not absolve the petitioner No.2 from its liability of fulfilment of the conditions prescribed in the Notification No.64/88-Cus dated 1^st March, 1988. 26. In so far as the judgment of the Supreme Court in the case of Mediwell Hospital and Health Care Pvt. Ltd. (supra) is concerned, by two later decisions, two parts of the judgment in the case of MediwellHospitalhave been overruled. In the three Judge bench decision in the case of Faridabad CT Scan Centre v. D.G. Health Services, 1997 (95) E.L.T. 161 (S.C.), the Supreme Court overruled the Mediwell Hospital to the extent of invocation of Article 14. In the case of Faridabad CT Scan Centre, the three Judge Bench overruled the Mediwell Hospital (supra) to the extent indicated therein, held thus : "3. We fail to see how Article 14 can be attracted in case where wrong orders are issued in favour of others. Wrong orders cannot be perpetuated with the help of Article 14 on the basis that such wrong orders were earlier passed in favour of some other persons ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nted were complied with, it would be unnecessary to have further condition imposed requiring the importers to advertise the same; that mere advertisement in a newspaper would not necessarily establish that importers have in fact complied with the condition or that the statement contained in the advertisement was correct; that further verification, in any event would be necessary; that the object is to serve the indigent patients and if such object has been carried out without dispute to the full satisfaction of the respondent authority, it was unnecessary burden upon the petitioner to require a monthly advertisement to be published indicating the details of the indigent patients treated by them as directed in the Mediwell's case (supra). It is in those circumstances, disagreeing with the view this matter was referred to a Larger Bench. 3. We have carefully perused the judgment of this Court in Mediwell's case and also the order of reference. We are of the view that when it was the prerogative of the Government to grant exemption, it was for them to impose appropriate conditions for the same. If that is so, this Court need not have interposed by reason of an order as made. Theref....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uthority, therefore, should continue to be vigilant and check whether the undertakings given by the applicants are being duly complied with after getting the benefit of the exemption notification and importing the equipment without payment of customs duty and if on such enquiry the authorities are satisfied that the continuing obligation are not being carried out then it would be fully open to the authority to ask the person who have availed of the benefit of exemption to pay the duty payable in respect of the equipments which have been imported without payment of customs duty. Needless to mention the Government has granted exemption from payment of customs duty with the sole object that 40% of all outdoor patients and entire indoor patients of the low income group whose income is less than Rs.500/- p.m. would be able to receive free treatment in the Institute. That objective must be achieved at any cost, and the very authority who have granted such certificate of exemption would ensure that the obligation imposed on the persons availing of the exemption notification are being duly carried out and on being satisfied that the said obligations have not been discharged they can enforc....