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

Citation: [1996] SUPP. 10 S.C.R. 228 · Decided: 17-12-1996 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
MEDIWELL HOSPITAL AND HEALTH CARE PVT. LTD. 
B 
v. 
UNION OF INDIA AND ORS. 
DECEMBER 17, 1996 
[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 
E 
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 
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 
H the preconditions enabling import of hospital equipments without paying 
228 
t 
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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 
HELD : 1. No importer can claim absolute exemption from payment 
F 
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

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