Case Note & Summary
The petitioners, Dr. Shashank Bhalchandra Subhedar, a practicing cardiologist, and M/s National Heart Center & Hypertension Clinic, challenged the order dated 1/3/2004 passed by the Director General of Health Services (D.G.H.S.) under Notification No.64/88 dated 1/3/1988. By that order, the D.G.H.S. held that the petitioners did not treat 40% of their outdoor patients and 10% of their indoor poor patients free of charge, thereby violating the conditions of exemption granted for import of two machines (Echo Cardiograph with colour mapping and computerized stress system with treadmill). Consequently, the Customs Duty Exemption Certificate (C.D.E.C.) issued in their favour was withdrawn. The petitioners had imported the machines from Norway in 1989-90 under the exemption scheme. The High Court had admitted the writ petition on 18/3/2004 and granted interim relief staying the operation of the impugned order, which continued to operate. The court noted that the basic facts were not in dispute. The respondents did not produce any evidence to establish the alleged breach of conditions. The court found that the impugned order was based on assumptions and not on concrete material. Therefore, the court quashed the order dated 1/3/2004 and directed that the C.D.E.C. shall be treated as subsisting. The writ petition was allowed accordingly.
Headnote
A) Customs Law - Customs Duty Exemption - Notification No.64/88 dated 1/3/1988 - Conditions for Exemption - The petitioners, a cardiologist and his clinic, imported two medical machines under exemption from customs duty subject to treating 40% of outdoor patients and 10% of indoor poor patients free. The D.G.H.S. withdrew the exemption certificate alleging non-compliance. The High Court held that the respondents failed to prove the breach of conditions, and the impugned order was unsustainable. (Paras 1-3) B) Customs Law - Withdrawal of Exemption Certificate - Burden of Proof - The respondents did not produce any evidence to show that the petitioners did not treat the required percentage of free patients. The court found that the order was based on assumptions and not on concrete material. (Paras 2-3) C) Customs Law - Interim Relief - The court had earlier granted interim stay of the withdrawal order, which continued to operate, and the petitioners retained custody of the machines. The final judgment quashed the impugned order and restored the exemption certificate. (Paras 2-3)
Issue of Consideration
Whether the Director General of Health Services was justified in withdrawing the Customs Duty Exemption Certificate on the ground that the petitioners failed to treat 40% of outdoor patients and 10% of indoor poor patients free of charge as per conditions of Notification No.64/88.
Final Decision
The writ petition is allowed. The impugned order dated 1/3/2004 is quashed and set aside. The Customs Duty Exemption Certificate (C.D.E.C.) shall be treated as subsisting.
Law Points
- Customs Duty Exemption
- Notification No.64/88 dated 1/3/1988
- Conditions of Exemption
- Free Treatment Obligation
- Withdrawal of Exemption Certificate
- Natural Justice
- Burden of Proof
