Case Note & Summary
The applicant, M/s National Heart Centre & Hypertension Clinic, through its Director Dr. Shashank Bhalchandra Subhedar, imported a Computerized Stress System with Tread Mills for hospital use. The equipment was purchased for Rs.6,76,573/- and imported vide bill of entry dated 9 April 1990 at Air Cargo Complex, New Delhi. The applicant claimed full exemption from customs duty under Notification No.64/1988-Cus. dated 1.3.1988, and was granted a Customs Duty Exemption Certificate (CDEC) dated 9.2.1990 by the Director General of Technical Development. Subsequently, the Commissioner of Customs issued a show cause notice dated 14.7.2000 under Section 124 read with Section 25(1) of the Customs Act, 1962, alleging that the applicant failed to comply with conditions 2(a) and 2(b) of the notification, which required providing free treatment to a prescribed percentage of indoor and outdoor patients. The adjudicating authority confirmed the demand for duty. The applicant filed Custom Appeal No.1 of 2005, which was dismissed. The present review application sought to review that dismissal. The court considered the submissions of Mr. K.H. Deshpande, Senior Counsel for the applicant, and Mr. S.K. Mishra, Assistant Solicitor General for the respondents. The court held that the conditions in the exemption notification are mandatory and must be strictly complied with. The applicant failed to produce evidence of achieving the prescribed percentage of free treatment. The review application did not disclose any error apparent on the face of the record and was dismissed. The court upheld the demand for customs duty.
Headnote
A) Customs Law - Exemption Notification - Condition Precedent - Notification No.64/1988-Cus., dated 1.3.1988 - Conditions 2(a) and 2(b) - The applicant imported a Computerized Stress System with Tread Mills claiming full exemption from customs duty. The exemption was subject to conditions requiring the importer to provide free treatment to a prescribed percentage of indoor and outdoor patients. The court held that the conditions are mandatory and must be strictly complied with; failure to achieve the prescribed percentage of free treatment disentitles the importer to the exemption. (Paras 2-4, 6-7) B) Customs Law - Show Cause Notice - Adjudication - Section 124 read with Section 25(1) of the Customs Act, 1962 - The respondent issued a show cause notice alleging non-compliance with conditions 2(a) and 2(b) of the notification. The court found that the applicant did not produce evidence of compliance, and the adjudicating authority correctly confirmed the demand for duty. (Paras 4-5) C) Civil Procedure - Review - Error Apparent on Record - Order 47 Rule 1 of the Code of Civil Procedure, 1908 - The review application sought to re-agitate the same issues already decided. The court held that no error apparent on the face of the record was shown, and the review was not maintainable. (Para 7)
Issue of Consideration
Whether the applicant complied with conditions 2(a) and 2(b) of Notification No.64/1988-Cus. for exemption from customs duty on imported medical equipment, and whether the review application discloses any error apparent on the face of the record.
Final Decision
The Misc. Civil Application (Review) No.1198 of 2009 is dismissed. Rule discharged. No order as to costs.
Law Points
- Strict compliance with exemption notification conditions
- Customs duty exemption for hospital equipment
- Condition of free treatment to poor patients
- Review jurisdiction limited to error apparent on record
