Supreme Court of India

MEDIWELL HOSPITAL AND HEALTH CARE PVT. LTD.versusUNION OF INDIA AND ORS.

Citation: 1996 INSC 1499
Decided: 17 December 1996
Disposal: Appeal(s) allowed
Bench: K RAMASWAMY

Holding

The Court held that although a purely commercial diagnostic centre does not ordinarily qualify for exemption under the notification, the refusal to grant a certificate to the appellant, when similar centres had been granted such certificates, amounted to arbitrary discrimination violating Article 14, and therefore the exemption certificate must be issued subject to the statutory continuing obligations.

Summary

The appellant, a privately run Modern Heart Institute and Research Centre, applied for a certificate under Notification No. 64/88‑Customs (issued under Section 25 of the Customs Act, 1962) to import sophisticated hospital equipment without paying customs duty. The Director General of Health Services refused the certificate and the Punjab & Haryana High Court dismissed the writ, holding that the institute was merely a commercial diagnostic centre and did not fall within the definition of “hospital” in the notification. The Supreme Court examined three issues: (1) whether a diagnostic centre can seek the exemption certificate, (2) whether the refusal amounted to discriminatory treatment violating Article 14, and (3) whether the appellant had complied with the pre‑conditions prescribed in the notification. While noting that the notification primarily targets charitable hospitals, the Court found that other similar diagnostic centres had been granted certificates and that the refusal to the appellant was arbitrary and violative of Article 14. Consequently, the Court ordered the authority to re‑consider and issue the exemption certificate, subject to the continuing obligations of providing free treatment to 40 % of outdoor patients and all low‑income indoor patients. The appeal was allowed.

Issues considered

Whether a Diagnostic Centre is entitled to seek issuance of a certificate to import equipment without payment of customs duty.
Whether the refusal to grant the certificate to the appellant, in view of similar centres receiving it, amounts to discriminatory treatment violative of Article 14.
Whether the appellant complied with all pre‑conditions stipulated in the exemption notification for entitlement to the certificate.

Legislation cited

Customs Act, 1962s. 25(1)
Customs Tariff Act

Subjects

customs duty exemptionhospital equipment importdiagnostic centreArticle 14 discriminationpre‑conditionscontinuing obligationsSection 25 Customs Actnotification

Judgment

A MEDIWELL HOSPITAL AND HEALTH CARE PVT. LTD.
v.
UNION OF INDIA AND ORS.

DECEMBER 17, 1996
B
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

Customs Act, 1962-Section 25(1)-Notification No. 64188-customs
dated 1.3.1998-Applicability-Exemption from levy of customs duty on im-
C port of hospital equipments by specified hospitals-Entitlement-Pre-condi-
tions-Diagnostic Centres run by private individuals on commercial
basis--ffeld, not entitled to exemption-Diagnostic Centres already availing
exemption-Continuing obligations-Duty to give free treatment to 40% out-
door patients-Free treatment to all indoor patients belonging to families with
income less than Rs. 500/p.m.
D
The Government of India in exercise of power conferred by sub-Sec-
tion (1) of Section 25 of the Customs Act, 1962 by notification No. 64/88-
customs dated 1.3.1988, exempted levy of customs duty on. import of
hospital .equipments imported by specified category of hospitals
(charitable) subject to certification from the Director General of Health
E Services. The appellant who had established a Modern Heart Institute and
Research Centre being desirous of importing sophisticated equipments
applied to the Director General for issuance of a certificate to claim
exemption from levy of customs duty. The respondent No. 2 having refused
to issue the certificate, the appellant filed a Writ Petition in the High
F Court. The High Court dismissed the petition holding that the appellant
was merely running a Diagnostic Centre and was not a hospital and as
such the exemption notification dated 1.3.1988 will not cover the case of
the appellant and that the appellant had got a commercial venture and the
conditions stipulated in the exemption notification having not been satis-
fied, the appellant was not entitled for issuance of mandamus for the grant
G of certificate in question. This appeal had been filed against the judgment
of the High Court.

The appellant contended that the expression hospital in the exemp-
tion notification brings within its sweep a Diagnostic Centre also; that all
t
H the preconditions enabling import of hospital equipments without paying
228
MEDIWELLHOSPITALAND HEALTH CARE (P) LTD. v. U.0.I. '229
I
the customs duty as per the notification had been duly satisfied by the A
appellant and that similar Diagnostic Centres as that of the appellant had
already been granted exemption certificate by respondent 2, therefore
refusal in the case of the appellant was a hostile discrimination without
any reasonable nexus and as such must b~ held to be arbitrary and
violative of Article 14 of the Constitution.
B
The respondents submitted that a Diagnostic Centre will not come
under the purview of the exemption notification and that the exemption
notification having indicated certain obligations on the part of the person
who import equipments without paying any custom duty and those obliga-
tion but being carried out, the respondent No. 2 was wholly justified in C
refusing to grant the exemption certificate.

The questions raised for consideration were (i) Whether a Diagnos-
tic Centre is entitled to seek for issuance of a certificate to enable it to
import equipments without payment of customs duty; (ii) Whether in the
facts and circumstances of the present case, more particularly in the D
absence of any denial of the allegations made by the appellant it is possible
for the Court to come to the conclusion that there has been a dis-
criminatory treatment between appellant and persons similarly situated,
and if so, whether there is any nexus for the same; (iii) Whether the
appellant had complied with all the pre-conditions stipulated in the ex- E
emption notification for being entitled to the issuance of a certificate by
the respondent No. 2 for import of the equipment in question without
payment of customs duty.

Allowing the appeal, this Court
F
HELD : 1. No importer can claim absolute exemption from payment
of customs duty as a right. The normal rule is that every import attracts
duty under the Customs Tariff Act unless otherwise exempted by a
notification issued by the Central Government in exercise of power under
Section 25 of the Act and the person claiming exemption certificate sh,ould
establish that the pre-conditions prescribed under the notification are fully G
satisfied. In the instant case, by the exemption notification No. 64/88-cus-
·-
toms dated 1.3.1988, the Government intended to exempt such hospitals
from payment of customs duty on import of equipments which were
certified by the Ministry of Health and Family Welfare to the effect that it
provides medical, surgical or diagnostic treatment. Thus a Diagnostic H
230 SUPREMECOURTREPORTS[1996] SUPP. lOS.C.R.
A Centre run by a private individual purely on commercial basis may not be
entitled to the exemption under the notification issued by the Central
Government. When other Diagnostic Centres had already been granted the
certificate enabling them to import equipments without paying customs
duty in terms of the notification issued by the Central Government under
B Section 25(1) of the Customs Act there was no reason to deny the said
exemption certificate to the appellant. [237-E-G; 238·D·E]

2. On facts alleged it could not be disputed that the appellant in·
tended to import latest equipment for Cardio Vascular Imaging System.
When respondent No. 2 had already granted certificates in favour of several
C such Diagnostic Centres, as alleged in the Special Leave Application,
refusal on his part to grant such certificate to the appellant without any
justifiable reason would tantamount to a discriminatory treatment meted
out to the appellant which on the face of it was violative of Article 14 of the
Constitution of India. The appellant was entitled to get the certificate from
D respondent 2 which would enable the appellant to import the equipment
without payment of customs duty but at the same time the very notification
granting exemption must be construed to cast continuing obligation on the
part of all those who had obtained the certificate from appropriate
authority and on the basis of that to have imported equipments without
payments of customs duty, to give free treatment atleast to 40 percent of
E the out door patient as well as would give free treatment to aU the indoor
patients belonging to families with a income of less than Rs. 500 p.m. The
competent authority, therefore, should continue to be vigilant and check
whether the undertakings given by the applicants were being duly complied
with after getting the benefit of the exemption notification and importing
F the equipment without payment of customs duty and if on such enquiry the
authorities were satisfied that the continuing obligation were not being
carried out then it would be fully open to the authority to ask the person
who had availed of the benefit of exemption to pay the duty payable in
respect of the equipments which had been imported without payment of
customs duty. The Government had granted exemption from payment of
G 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 had granted such
certificate of exemption would ensure that the obligation imposed on the
H person availing of the exemption notification are being duly carried out
MEDIWELLHOSPITALANDHEALlHCARE(P) LID. v. U.O.L [PATIANAIK,J.] 231

and on being satisfied that the said obligations have not been discharged A
they can enforce realisation of the customs duty from them. All the persons
including the appellant who had the benefit of importing the hospital
equipment with exemption of customs duty under the notification should
notify in the local newspaper every month the total number of patients they
have treated and 40% of them are indigent persons below stiputlated in· B
come of Rs. 500 per month with full particulars and address thereof which
would ensure that the application to treat 40% of the patients free of cost
would continuously ~ulfilled. In the event of default, there should be coer·
cive official action to perform their obligation undertaken by all such
persons. This condition becomes a part of the exemption order application
and strictly be enforced by all concerned including the police personnel C
when complaints of non-compliance were made by the indigent persons, on
denial of such treatment in the concerned hospital or diagnostic centres,
as the case may he. [238-E-F; 239-B; 240-B]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 16735 of
1996. D
Form the Judgment and Order dated 31.1.96 of the Punjab &
Haryana High Court in C.W.P. No. 1310 of 1995.

Arnn Jaitley, S.M. Sarin and P.N. Puri for the Appellants.
E
V.C. Mahajan, D.S. Mehra, Ms. Kamini Jaiswal, V.K. Verma and
A.K. Srivastava for the Respondents.

The Judgment of the Court was delivered by\·

PATIANAIK, J.: Leave granted. F

The appellant, had applied to respondent No. 2, Director General of
Health Services, Ministry of Health and Family Welfare for grant of
necessary certificate which would enable the appellant to import certain
hospital equipments without payment of import duty in accordance with
the notification No. 64/88-customs dated 1.3.1988. The said respondent No. G
2 having refused to issue the certificate in question, the appellant filed a
Writ Petition in the High Court of Punjab and Haryana which was
registered as C.W.P. No. 1310of1995. The said Writ Petition having been
dismissed by the High Court by the impugned judgment dated 31.1.1996
the appellant has approached this Court. H
232 SUPREME COURT REPORTS[l996] SUPP.10 S.C.R.

A The case of the appellant in the nutshell is that the Government of
India in exercise of power conferred by Sub-Section (1) of Section 25 of
the Customs Act, 1962 (hereinafter referred to as 'The Act') had exempted
levy of customs duty on import of hospital equipments by specified
category of hospitals (Charitable) subject to certification from the Director
B General of Health Services. The appellant who had established a Modern
Heart Institute and Research Centre at Chandigarh being desirous of
importing sophisticated equipments like Stress Test System, Colour Dop-
pler Holter Monitor Recorder, Tread Mill Test Machine, applied to the
Director General for issuance of a certificate so that the machinery im-
ported would not be liable for levy of customs duty. The respondent No.
C 2, by his letter dated 2.2.1993 after scrutinising the project report submitted
by the appellant and on being satisfied that the import of the equipments
are essential for use in any hospital granted certificate for importing
Marquette Max though the appellant was intending to import Marquette
Case 15. On receipt of the certificate dated 2.2.1993 the appellant applied
D for amendment of the exemption certificate. But no action was taken by
the respondent No. 2. Ultimately the imported equipment arrived in India
on 22nd March, 1993 and the appellant released the same on furnishing
Bank Guarantee. Thereafter the appellant approached the respondent No.
2 for grant of exemption certificate b11;t as no order was passed by respon-
dent No. 2 the appellant approached the High Court by filing a Writ
E Petition which was registered as W.P. No. 10717 of 1993. The said Writ
Petition was disposed of by order dated 16.2.1994 directing the respondent
No. 2 to take a final decision on the application of the appellant within 10
weeks and it was further ordered that the Bank Guarantee furnished by
the appellant will not be encashed till then. On 12.8.94 the respondent No.
F 3 after due enquiry recommended for grant of certificate of exemption to
the appellant but notwithstanding the said recommendation the respondent
No. 2 by his order dated 26th December, 1994, refused to grant the
exemption certificate for import of Marquette Case 15 which is undoub-
tedly one of the most essential and modern equipment necessary for
combating the heart ailments. The appellant, therefore, had no other
G alternative than to file the Writ Petition registered as·w.P. No. 1310 of
1995 which was dismissed by the impugned order dated 31st January, 1996.
Hence this appeal by Special Leave.

The High Court in the impugned order came to the conclusion that
H the appellant is merely running a Diagnostic Centre and is not a hospital
MEDIWELLHOSPITALANDHEALIBC:ARE(P)LTD.v. U.O.l.[PATIANAIK,J.] 233

and as such the exemption notification dated 1.3.1988 will not cover the A
case of the appellant. The High Court also came to the conclusion that the
appellant has got a commercial venture and the. conditions stipulated in
the exemption notification have not been satisfied and, therefore, the
appellant was not entitle for issuance of m:mdamus for the grant of
certificate in question. B

Mr. Arun Jaitley, learned senior couns~f appearing for the appellant
contended that the expression "hospital" in ·the exemption notification
brings within its sweep a Diagnostic Centre also and bearing in ID.ind the
object with which the notification has been issuecl there is no justification
for giving a narrow construction to the word "hospital". _The learned senior C
-counsel also contended that all the pre-conditions enabling import of
hospital equipments without paying the customs duty as per the notification
have been duly satisfied by the appellant and the High Court was in error
in corning to the conclusion that the conditions precedent have not been
satisfied. Mr. Jaitley, learned senior counsel lastly urged thlt similar Diag- D
nostic Centres as that of the appellant have already been granted exemp-
tion certificate by respondent No. 2 on the basis of which equipments in
such Diagnostic Centres have been imported without payment of customs
duty and refusal in the case of the appellant is a hostile discrimination
without any reasonably nexus and as such must be held to be arbitrary and
violative of Article 14 of the Constitution and, therefore, a Writ of Man- E
damus must be issued to respondent No. 2 for grant of certificate of
exemption.

Mr. Mahajan, learned senior counsel appearing for the Union of
India, of the other hand contended, that the High Court rightly came to F
the conclusion that a Diagnostic Centre will not come under the purview
of the exemption notification and their is no error in such conclusion of
the High Court which requires to be interfered with by this Court in
exercise of power under Article 136 of the Constitution. The learned senior
counsel further contended that the exemption notification having indicated G
certain obligations on the part of the person who import equipments
without paying any customs duty and those obligations not being carried
out, the respondent No. 2 was wholly justified in refus~g to grant .the
exemption certificate and the High Court did not commit any error in
dismissing the Writ Petition. So far as the allegations of the appellant
regarding discrimination are concerned, neither there has been any reply H
. SUPREME COURT REPORTS[1996) SUPP. 10 S.C.R.
A to the same by the respondents nor any authority of the respondents nor
in course of hearing any arguments had been advanced by the learned
counsel appearing for the Union of India. ·

In view of the rival submission .the questions which arose for our
consideration are :
B
1. Whether a Diagnostic Centre is entitled to seek for issuance of a
certificate to enable it to import equipments without payment of customs
duty; ·

C 2. Whether in the facts and circumstances of the present case, more
particularly in the absence of any denial of the allegations made by the
appellant it is possible for the Court to come to the conclusion that there
has been a discriminatory treatment between appellant and person similar-
ly situated, and if so, whether there is any nexus for the same.
D
3. Whether the appellant had complied with all the pre-conditions
stipulated in the exemption notification for being entitled to the issuance
of a certificate by the respondent No. 2 for import of the equipment in
question witqout payment of customs duty.

E Coming to the first question it is seen that Section 25 of the Customs
Act enables the Central Government, if it is satisfied that it is necessary in
the public interest so to do exempt generally or subject to such conditions
as may be specified in the notification goods of specified description from
the whole or any part .of the duty of customs leviable thereon by a
F notification in the Official Gazette. In exercise of the aforesaid power
under Section 25 of th Customs Act the Central Government issued' a
notification No. 64/88-customs dated 1.3.1988 granting exemption from
payment of customs duty to the import of all equipments, apparatus and
appliances subject to the approval of the Government of India in the
Ministry of Health a Family Welfare or by the Director General of the
G Health Service to the Government of India to the effect that the import of
the equipment in question is essential for w>e in any hospital. The notifica-
tion in question also provided certain condition to be satisfied by the
hospital in question which intend to import the equipment before claiming
the exemption under the notification. The said conditions are enumerated
H in the table to the notification which is extracted hereinbelow :
MEDIWBLLHOSPITALANDHEALTHCARE(P)LID.v. U.O.L(PA1TANAIK,1.J 235
"1. All such hospitals as may·b,~.certified by the said Ministry of A
Health and Family Welfare to be run or substantially aidec}'by such
charitable organisation as may be approved, from time to time, by
the said Ministry of Health and Family Welfare.

2. All such hospitals which may be certified by the said Ministry
of Health and Family Welfare, in each case, to be run for providing B
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% of all their outdoor
patients; and C
(b) Free to all indoor patients belonging to families with an
income o~ less than rupees five hundred per month, and keeping
for this purpose at least 10 per cent of all the hospital beds reserved
for such patients; an
D
(c) at reasonable charges, earlier on the basis of the income of
the patients concerned or otherwise, to patients other than those
specified in clause (a) and (b)." •

Clauses 3 and 4 of this notification also indicate the pre-conditions
to be satisfied before the certificate in question is issued. Clauses E
· 3 and 4 are extracted hereinbelow in extenso :

"3. Any such hospital in respect of which the said Ministry of
Health and Family Welfare, may, having regard to the type of
medical, surgical or diagnostic treatment available there, or the
geographical situation thereof, or the class of patients for whom F
the mi:dical, surgical or diagnostic treatment in being provided,
certify either generally or in each case, that the hospital even
though it makes a charge for the ·said treatment, is nevertheless
run on non-profit basis and is deserving of exemption from the
pa~nt of duty on the said hospital equipment under this notifica- G
tion.
•
Provided that the hospital equipment in respect of which the
exemption is claimed, is imported by such hospital by way of free
gift from dpnor abroad or has been purchased out of donations
received abroad in foreign exchange. H
236 SUPREME COURT REPORTS[1996] SUPP.10 S~.R.

A Provided further that where the said hospital equipment has
been purchased out of donations received abroad in foreign ex-
change, the hospital has been permitted to maintain an account
abroad by the Reserve Bank of India for the purposes of receiving
funds donated oversees.

B 4. Any such hospital which is in the process of being established
and in respect of which the said Ministry of Health and Faiilily
Welfare is of opinion -

(i) That there. is an appropriate programme for establishment
of the hospital. ..
c
(ii) that there are sufficient funds other resources required for
such establishment of the hospital,

(iii) that such hospital, would be.in-a-pOsifion to start function-
ing within a period of two years, and
D
(iv) that such hospital, when starts functioning would be
relatable to. a hospital special in paragraph 1, 2 or 3 of this Table,
and the said Ministry of Health and Family Welfare certifies to
that effect;
E
Provided that -

"
(a) in the case of a hospital relatable to paragraph 3 of this
Table the importer produces evidence to the Assistant Collector
of Cust<'ims at the time of same is being imported in accordanee
F with the conditions specified in proviso to that pa,ragraph the
importer shall give an undertaking in writing to the Assistant.
Collector at the time of clearance of the said hospital equipment
that the importer shall furnish certificates from the said Ministry
of Health a'hd Family Welfare or from the Directorate General of
Health services, Government of India, within such period as the
G
Assistant Collector of Customs may specify in this behalf or within
such extended period as the Assistant Collector of Customs, on
sufficient cause being shows, may allow in each case, to the effect:
', l
(i) that such hospital equipment has been installed in the
H hospital; and
MEDIWEILHOSPITALANDHEALTIICARE(P)LID.v. U.O.L[PAITANAJK,J.] '137

(ii) that such hospital has started functioning; A

(i) if such hospital starts functioning within the period specified C
therefore, as is not proved to the satisfaction of the Assistant
Collector of Customs to have been installed in such hospital, or

(ii) if such hospital does not start functioning within the period.
specified therefore.
D
EXPLANATION for the purposes of this notification, the
expression Hospital includes any Institution, Centre, Trust, Society,
Association, laboratory, Clinic and Maternity Home which renders
medical, sur.gical or diagnostic treatment."

It is true that no - importer can claim absolute exemption from E
payment of customs duty as a right: This normal rnle is that every import
attracts duty under the Customs Tariff Act unless otherwise exempted by
a notification issued by the Central Government in exercise of power under
Section 25 of the Act and the person claiming exemption certificate should
establish that the pre-conditions prescribed under the notification are fully·• F
satisfied. In the context of the dispute between the parties and on reading
the exemption notification as a whole it appears that the government
intended to exempt such hospitals from payment of customs duty on import
of equipments which are certified by the Ministry of Health and Family
Welfare to the effect that it provides medical, surgical or diagnostic treat- G
ment. Thus a Diagnostic Centre run by a private individual purely on
commercial basis may not be entitled to the exemption under the notifica-
)',
tion issued by the Central Government. The conclusion of the .Central
Government as well as that of the High Court on this score, therefore, may
not be held to be incorrect and the appellant may not be entitled to seek
for issuance of mandamus to respondent No. 2 on this ground. H
238 SUPREME COURT REPORTS[1996) SUPP.10 S.C.R.
A But when the second question is examined we find sufficient force in
: , ' the arguments of learned senior counsel appearing for the appellant which
has been specifically averred in the application for Special Leave and not
..:. denied by the respondents that several such individual Diagnostic Centres
? not attached to any hospital have been granted the exemption certificates ·
B by respondent No. 2 enabling such Diagnostic Centres to import equip-
ments without payment of customs duty. In course of hearing of this
application on 30th September, 1996, faced with the averments made by
the appellant the counsel for the respondent sought for three weeks' time
to file affidavit of the competent official explaining whether exemption to
the similar institute has been granted, and if so, under what circumstances
C and as to why the same would not be granted to the appellant. Though the
time granted to the respondents was again extended by further two weeks'
by other dated 28.10.1966 on the request of the counsel appearing for the
respondents but ultimately no affidavit came to be filed on behalf of the
respondents nor in course of hearing the counsel appearing for the respon-
D dents was able to advance any argument on that score. In this view of the
matter when other Diagnostic Centres have been already granted the
certificate enabling them to import equipments without paying customs
duty in terms of the notification issued by the Central Government under
Section 25(1) of the Customs Act we se~ no reason to deny the said
exemption certificate to the appellant. On facts alleged it cannot be dis-
E puted that the appellant intended to import latest equipment for Cardio
Vascular Imaging System. When respondent No. 2 has already granted
certificates in favour of several such Diagnostic Centres, as alleged in the
Special Leave Application, refusal on his part to grant such certificate to
the appellant without any justifiable reason tentamounts to a discriminatory
F treatment meted out to the appellant which on the face of it is violative of
Article 14 of the Constitution of India. In view of our conclusion, as
aforesaid, we have no doubt in our mind that the order of respondent No.
2 refusing to grant certificate to the appellant is liable to be struck down
and the High Court also committed serious error in rejecting the Writ
Petition filed by the appellant.
G
Coming to the third question we have carefully considered the
materials on record as well as the notification of the Central Government
dated 1.3.1988 containing several obligations on the part of the person who
are availing benefit of the exemption notification. On going through the
H same we are satisfied that the..appellant also had given necessary under-
MEDIWEU.HOSPITALAND HEALm CARB(P) Lm.... U.O.L (PA'ITANAIK, J.) 239:
taking as required QD.der the notification and, therefore, is otherwise A
entitled to avail of the benefit of the notification in question.

While therefore, we accept the contentions of Mr. Jaitley, learned
senior counsel appearing for the appellant that the appellant was entitled
to get the certificate from .respondent No. 2 which would enable the B
appellant to import the equipment without payment of customs duty but at
the same time we would like to observe that the very notification granting
exemption must be construed to cast continuing obligation on the part of
all those who have obtained the certificate from the appropriate authority
and on the basis of that to have imported equipments without payment of
customs duty to give free treatment atleast to 40 per cent of the cut door C
patients as well as would give free treatment to all the indoor patients
belonging to the families with an income of less than Rs. 500 p.m. The
- competent authority, 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 D
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 i:ustoms
duty. Needless to mention the government has granted exemption from E
payment of ciistoms 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 F
the obligation imposed on the persons availing of the exemption notifica-
tion are being duly carried out and on being satisfied that the said obliga-
tion have not been discharged they can enforce realisation of the customs
duty from them.

It is needless to reiterate that all the persons including the appellant G
who had the 1benefit of importing the hospital equipment with exemption
... of customs duty under the notification should notify in the local newspaper
every month the total number of patients they have treated and the 40%
of them are the indigent persons below stipulated income of Rs. 500 per
month with full particulars and address thereof which would ensure that H
240 SUPREME COURT REPORTS[1996] SUPP. 10 S.~.R.

A the application to treat 40% of the patients free of cost would continuously
be fulfilled. In the event of default, there should be coercive official action
to perform their obligation undertaken by all such persons. This condition
becomes a part of the exemption order application and strictly be enforced
by all concerned including the Police personnels when complaints of
B non-compliance were made by the indigent persons, on denial of treatment
in concerned hospital or diagnostic centers, as the case may be.

Subject to the aforesaid observations, the impugned order of respon-
dent No. 2 as well as that of the High Court are set aside the respondent
No. 2 is directed to re-consider the matter and issue necessary certificate
C to the. appellant within a period of three months from the date of receipt
of the order. Since the appellant has already imported the equipment on
furnishing bank guarantee, on production of the necessary certificate issued
by respondent No. 2 enabling the appellant exemption from payment of
customs duty the bank guarantee would stand discharged. But availability
of such concession by the appellant would be subject to the direction and
D conditions as stated earlier.
The appeal is accordingly allowed. But in the circumstances there
will be no order as to costs.

R.A. Appeal allowed.

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