TaxTMI 
TaxTMI 
2026 (6) TMI 773
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion subject to fulfillment of the conditions prescribed therein. The exemption under Notification No. 65/88-Cus. was available to hospitals subject to certain post-importation obligations, inter alia, providing free treatment of an average to 40% of outdoor patients and providing free treatment to all indoor patients becoming to weaker sections whose family income was below the prescribed limit, while reserving at least 10% of hospital beds for such patients. 3. Subsequently, the DGHS, vide communication dated 02.02.2001, cancelled the CDECs issued to the appellant on the ground that the appellant had failed to fulfill the mandatory conditions attached to the notification. Pursuant thereto, proceedings were initiated by the Customs Authorities for recovery of Customs Duty foregone and for confiscation of the imported goods. 4. The matter travelled through several rounds of adjudication and appellant proceedings. In an earlier round, the Tribunal remanded the matter for fresh consideration, including examination of the appellant's claim regarding alternative exemption notifications. Thereafter, the Adjudicating Authority again adjudicated the matter and confirmed the demand o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... DGHS. It was further submitted that the verification conducted by the competent authorities established that the appellant failed to provide free treatment to the prescribed percentage of outdoor patients and also failed to reserve the requisite percentage of beds for economically weaker patients. Therefore, the appellant admittedly failed to satisfy the substantive conditions of the notification. 10. The revenue also contended that the issue is no longer res-integra and stands settled by the judgment of the Hon'ble Supreme Court in Mediwell Hospital and Healthcare Pvt Ltd., Vs Union of India [1997 (89) E.L.T 425 (SC)] wherein, it was held that hospitals obtaining exemption under Notification No.65/88-Cus are under a continuing obligation to comply with the conditions of the notification and that the authorities are entitled to enforce such obligations. 11. The revenue further submitted that the appellant's claim for exemption under Notification Nos. 65/88-Cus. and 208/81-Cus. was duly examined by the Adjudicating Authority and rightly rejected. According to the revenue the imported items such as component parts of the Angioscope and multichannel Cardioscope Monitors, Spares....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Customs Authorities were, therefore, justified in initiating action for recovery of the duty foregone. 17. We also find no merit in the appellant's claim for exemption under Notification No. 65/88-Cus. The Adjudicating Authority has examined the nature of the imported goods and recorded a categorical finding that the imported items was only a component part imported separately and not the equipment specifically enumerated in the notification. In this regard observations made by the Adjudicating Authority are noteworthy and reproduced below: "13. The importers claimed exemption in respect of Component Part of Angio Scope for Coronary Angio Graphy - Mogalix X-Ray Tube in terms of Sl.No.104 of the Notification No. 64/88-Cus dated 1,3,1988 and submitted that the said Notification provides concessional rate to the medical equipment specified in the table annexed and their Accessories and Spare parts. This contention of the importer is not correct inasmuch as the said notification exempts the medical equipment and their Accessories and Spare parts specified in the table annexed. This means that those Accessories or Spare parts which are not specified in the table are not c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an essential accessory to the angioscope, the benefit of exemption could not be extended to the TV monitor in the absence of the specific mention in the Entry No. 104 referred to above." 14. The other items on which the Importer claimed exemption is Multi Channel Cardio Scope Monitors, Spares and Accessories under Serial number 6(C) of the Notification No. 208/81-Cus dated 22.9.1981. The relevant entry in the notification reads as follows: "D.C. Defibrillators for internal and external use and Pace Makers and their accessories including patient cable, internal Defibrillators Paddles 45mm and 55 mm sizes but excluding:- (a) E.C.G. Recorder (b) Cardioscopes (c) Cardiac Monitors (d) E.C.G. Monitors of any type and the following components of D.C. Defibrillators namely:- (i) Polyester / paper Discharge Capacitor. (ii) Discharge / Damp Relay. (iii) Connector. (iv) High Voltage Retractable, Flexible wire" 15. I find that the imported goods namely Multi Channel Cardio Scope Monitors, Spares and Accessories are not covered in the aforesaid entry and cardiscopes and cardiac monitors are clearl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xemption under Notification No. 208/81-Cus cannot be faulted. 10. Accordingly, we uphold the impugned order and reject this Appeal. [Order per: S.K. Bhatnagar, Vice President] - I would like to add that while it is true that a notification must not be so interpreted that its very purpose is defeated and in the present case it may be difficult for the defibrillators to function without capacitors, it is necessary to emphasis the fact that in the present case while defibrillators are covered in the `life saving equipments' category but the coverage is only partial as certain components/parts and accessories have been deliberately excluded and in so far as the defibrillators are concerned, the polyester/paper discharge capacitors have been specifically excluded. Therefore, irrespective of the fact as to whether they are essential parts or accessories, the benefit cannot be allowed to the capacitors if they are of the type mentioned in the Exclusion Clause. No evidence has been produced before us to show that they are of any other type. In the facts and circumstances of the case, I agree that the ld. Collector is right and, therefore, the order i required to be upheld....