TMI Blog2023 (4) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions stipulated in the notification No.64/88 is unambiguous that to provide free treatment on an average to at least 40% of their outdoor patients and free treatment to all indoor patients belonging to families with an income of less than rupees five hundred per month and keeping for this purpose at least 10% of all the hospital beds reserved for such patients - the interpretation of these two conditions must be read in consonance with the purpose and object of granting exemption from payment of customs duty. On considering elaborately the Constitutional perspectives, role of the Courts and the liability of the State, the exemption was granted in public interest, in order to achieve the Constitutional goal and the perspectives of the Constitution. Right to Life being a Fundamental Right and medical facilities to be provided is an integral part of Article 21. The Government while expanding the scope of medical facilities to the poor and the poorest of poor, imposed conditions for exemption of customs duty and it is needless to state that the exemption is granted at the cost of public funds. Therefore, the nexus between the exemption from payment of customs duty and the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The petitioners could not establish that they have treated 40% of their outdoor patients in the hospital, where the imported medical equipments are installed and further they have failed to establish that 10% of all the hospital beds are reserved for such patients, who have taken free treatment in the hospital, where the imported medical equipments are installed. These facts are not seriously disputed by the writ petitioners. Contrarily, the writ petitioners have consistently contended that they are not obligated to provide the treatment in the place, where the imported medical equipments are installed - When the petitioners themselves have not established that they have reserved 10% beds in the hospital, where the imported equipments are installed and further, they have not proved that 40% of outdoor patients are treated free of cost in their hospitals, where the imported medical equipments are installed, this Court is of the considered opinion that the petitioners are not entitled for the relief as such sought for in the present writ petitions. The respondents have rightly and legitimately cancelled the Customs Duty Exemption Certificate (CDEC) granted in favour of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w Delhi issued an order dated 10.08.1993. As per the said letter, the petitioners/hospitals submitted applications to the Health authorities of the State Government, who after visiting the petitioners/hospitals and after carrying out inspections and satisfying themselves with the compliance of the notification issued by the Director General of Health Services, recommends all the cases to the second respondent for issuance of CDECs to the petitioners/hospitals. The petitioners/hospitals have not only been rendering free treatment to those patients as stipulated in the notification, but also to patients referred from Government General Hospitals. 5. As certain applications for granting CDEC were pending for a long time, the petitioners/hospitals made a request to the DGHS to forward the certificates in view of the pressure from the Customs Department. Thereafter, the 2nd respondent called for certain details, which were also submitted by the petitioners/hospitals. However, by communication dated 28.01.1998, the 2nd respondent rejected the applications for grant of CDEC. That apart, by orders dated 04.02.1999 and 24.02.1999, the 2nd respondent cancelled CDECs already granted on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials available on record to discredit the inspections conducted by the State authorities, the 2nd respondent / Director General of Health Services ought not to have rejected the applications and cancelled the Customs Duty Exemption Certificate (CDEC) already granted. 8. The learned Senior counsel for the petitioners drew the attention of this Court with reference to the exemption Notification No.64/1988 dated 01.03.1988. The conditions stipulated in the table contemplates free, on an average, to at least 40 per cent of all their outdoor patients and free to all indoor patients belonging to families with an income of less than Rs.500/- per month and keeping for this purpose at least 10 per cent of all the hospital beds reserved for such patients. With reference to the Notification, the Director of Medical Education, State Government Authority recommended the case of the writ petitioners by conducting inspections. While so, there is no reason to form contra opinion in the absence of any materials available on record. Based on the inspection conducted by the Director of Medical Education, the Government of Tamil Nadu also recommended the case of the petitioners to issue Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent to their availing of the benefit of the exemption of duty and before the end of February 1994, since Notification 99/94, rescinding the notification 64/88 came into force on 01.03.1994. 13. The learned Senior counsel for the petitioners, relying on the observations made by this Court in the order passed in the writ petitions state that the obligation must be only during the period when the Notification 64/88 was in force and not for the subsequent period. 14. The learned Senior counsel inferred the observations made by the Hon'ble Supreme Court of India in the case of Mediwell Hospital Health Care Pvt Ltd., Vs. Union of India, reported in (1997) 1 SCC 759 . It is contended that the ruling in Mediwell Hospital case (cited supra) had been overruled in the later judgment of three Judges Bench in the case of Faridabad CT. Scan Centre Vs. D.G. Health Services and Others , reported in (1997) 7 SCC 752 . It is contended that the question of rescinding the Notification 64/88 thereon was considered by the Apex Court as those issues were raised. 15. Based on the above position, this Court passed an order, stating that neither before the Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding such treatments and therefore, the action of the respondents 1 and 2 are untenable. JUDGMENTS RELIED ON BY THE PETITIONERS : 19. The learned Senior Counsel appearing on behalf of the petitioners relied on the judgment of the Hon'ble Supreme Court of India in the case of Mediwell Hospital and Health Care Private Limited Vs. Union of India and Others reported in [(1997) 1 SCC 759] . Relying on the paragraph 10 of the judgment, it is contended that 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 should establish that the preconditions prescribed under the notification are fully 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 treatment. Thus a diagnos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined by the Respondents and not brushed aside only on the ground that such a plea was not raised earlier. 24. The order dated 8th February, 1984 of the ITAT in respect of the Petitioner for the assessment year 1979 1980 is, in the context of the present case, relevant. It sets out the figures of free services rendered to the patients of the SGRH during the years 1976 1977 and 1981 1982. The order of the ITAT relied on a certificate issued by the DHS that SGRH was a charitable hospital running a free out patients department and maintaining free beds . The ITAT proceeded to observe: It is no doubt true that the hospital also had a number of paying beds and it charged the patients who could afford but that fact by itself would not render the income of the hospital as not exempt u/s 10(22-A). Having regard to the predominant object of the society and the restrictions placed in clause 10 of its memorandum and articles of association which has been reproduced above, we do not find anything inconsistent with the claim made by the assessee that the hospital was being run as a public charity on a philanthropic basis. According to us a charity would not be any the less c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutions, such as Sir Ganga Ram Hospital, Batra Hospital, etc. It further observed that some charitable hospitals provide good free treatment facilities for needy and deserving patients, such as Sir Ganga Ram Hospital, Batra Hospital etc. At this point in time several years after the import of the equipments and several years after the Notification No. 64 of 1988 has ceased to exist, to brush aside the claim of the Petitioner that it should be treated as a charitable hospital, would not be justified. Consequently, this Court is of the view that the claim of the Petitioner to be treated as a charitable hospital for the purposes of Notification No. 64 of 1988 ought to be accepted by the Respondents. Does the Petitioner satisfy the requirement of Para (2)? 27. The alternative plea of the Petitioner that it satisfies the requirement, of para 2 of the Table appended to Notification No. 64 of 1988 is examined next. 28. The scope of enquiry is whether during the time Notification No. 64 of 1988 was in force, i.e., 1st March, 1988 till 1st April, 1994, the post-import obligations were fulfilled by the Petitioner. The inspection undertaken of the SGRH on 17th/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondent/petitioner, who benefited the tax exemption are bound to discharge their liability during the period when the said Notification No. 64/88 was in force. The authorities can enforce such obligation only during that period when the notification was in force and not for the subsequent period. 18. In this case, notification was rescinded on 01.03.1994. The authorities are not correct in cancelling the Customs Duty Exemption Certificates issued under Notification No. 64/88, dated 01.03.1988, saying that the respondent/petitioner had not complied with the conditions for the subsequent period, namely 1994 to 1998. 20. As said by the learned single Judge, all the arguments raised in the writ petition, have been elaborately discussed in the Apollo Hospital's case. We do not see any reason to interfere with the findings and orders of the learned single Judge. 24. In the case of R.G. Stone Urological Research Institute Vs. Union of India reported in [2011 (263) E.L.T. 366 (Del.)] , the Delhi High Court held as follows: 43. The resultant position from the above discussion would be that as far as the Customs Notification No. 64/88 is concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repeal, there is no reason shown why the report dated 3rd January 2001 of the Director (Administration), Lok Nayak Hospital of the GNCTD should not be accepted. 25. In the case of Share Medical Care Vs. Union of India reported in [(2007) 4 SCC 573] , the Apex Court held as follows: 15. From the above decisions, it is clear that even if an applicant does not claim benefit under a particular notification at the initial stage, he is not debarred, prohibited or estopped from claiming such benefit at a later stage. 20. In our opinion, the decision in Mediwell Hospital [(1997) 1 SCC 759 : JT (1997) 1 SC 270] would not take away the right of the appellant to claim benefit under para 3 of the table of the exemption notification. If the appellant is not entitled to exemption under para 2, it cannot make grievance against denial of exemption. But if it is otherwise entitled to such benefit under para 3, it cannot be denied either. The contention of the authorities, therefore, has no force and must be rejected. 26. In the case of Navin C.Nanda National Institute of Echo Cardiography and Cardic Research Vs. Union of India reported in [2016 (338) E.L.T. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the Hon'ble High Court at Delhi in PUCL matter (409/96) and observations of Hon'ble Supreme Court in Mediwell Hospital case (CA No.16735/96) . Accordingly, a time bound letter was issued to the petitioner hospital on 13.11.1997 to furnish certain informations on fulfillment of conditions of 64/88-Customs notification. From the data made available by the institution directly to this Directorate General of Health Services, New Delhi, the report received from the State Government and from the visit reports of officers of the Directorate General of Health Services, it has been observed that the applicant has been counting the services provided by its Tamabram Centre towards being counted as eligible for grant of CDECs. However, in view of the fact that:- (i) this centre is located 20 kms away from the location of the equipment; (ii) the centre mainly caters to the family welfare programme and not to services requiring free OPD/IPD services relating to those diseases for treatment for which the equipments were imported. 28. Therefore, the Directorate General of Health Services/Ministry of Health and Family Welfare has not accepted the claim of the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upholding the decision of the Hon'ble Learned Single Judge, the Division Bench has only looked at the issue of principles of natural justice and has not examined the technical and other law points which was the ground for the appeal. Abiding by the Hon'ble High Court's order dated 22.12.2008, this Directorate issued notice dated 24.03.2009 to the petitioners/hospitals to furnish the documents through the State Government to fulfill the post import conditions laid down under notification No.64/88-Customss dated 1-3-88. The petitioners/hospitals furnished the information/documents. The Statement Government has also forwarded the documents in respect of the petitioners/ hospitals. 32. The matter was considered and it was decided that the petitioners/ hospitals may be given an opportunity of personal hearing to substantiate fulfillment of post import conditions of notification No.64/88-Customs dated 01.3.1988. Accordingly vide notice dated 10.7.2009, the petitioners/ hospitals was requested to appear before this Directorate on 30-7-2009 to substantiate fulfillment of condition of the said notification. The representatives of the hospital attended the meeting as schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the CDECs were issued earlier has been rescinded vide Notification No.99/94, dated 1.3.94. The judgment of Hon'ble Supreme Court in Mediwell case, which was subsequent to repealing of the notification No.99/94-Customs dated 1.3.94 had held that there is a continuous onus on the part of beneficiary institution to fulfill the said obligations, the DGHS/Ministry of Health and F.W. has the right to withdraw the CDECS on the basis of which the petitioner had imported equipments would take liberty to quote the observations of the Hon'ble Supreme Court in Mediwell Hospital judgment. The Hon'ble Supreme Court observed that the objective must be achieved at any cost and the very authority who have granted such certificates of exemption would ensure that the obligation imposed on the persons availing of the exemption notification are being duly carried out and on being satisfied that the said obligations have not been discharged, they can enforce realization of the customs duty from them. 36. Notification No.64/88-Customs augmented for Section 25 (1) of the Custom Act and the Act and relevant clause is still in force. The Department of Revenue vide their letter dated 7.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction goes against the findings of the Hon'ble Supreme Court. 38. The Directorate General of Health Services issued custom duty exemption certificates under notification No 64/88-Customs dated 1.3.88 based on petitioners undertaking to fulfill the post import conditions and certification and recommendation of the concerned State Government. Pursuant to the filing of a writ petition No.409/96 by Peoples Union of Civil Liberties (PUCL) in the Hon'ble High Court of Delhi and as per observations of Hon'ble Supreme Court in Mediwell Hospital case, this Directorate/Ministry of Health and F.W. has taken up review of all beneficent institutions, who availed benefits under 64/88- Customs Notification. The petitioner case was also reviewed in terms of observations of the Hon'ble Supreme Court in Mediwell Hospital case which was found not fulfilling the post import conditions of the notification as undertaken at the time of importation of the equipments. 39. The petitioners/ hospitals were beneficiaries under the notification dated 1.3.88 and its eligibility was as such examined within the purview of that notification strictly in the light of observations of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to the hospitals. The intention of the notification to allow duty free import of high tech cost-intensive equipments is for providing secondary and tertiary health care and make them accessible to patients, who does not have access/affordability to such treatment. 40. The averments of the petitioners/hospitals that as per the notification No.64/88-Customs dated 1.3.88 only a provision should be made for treatment of 40% out patient and 10% of inpatients, free of charge which is totally out of context. Neither the notification nor the Mediwell judgment have put any conditions for the 40% outpatient treatment. The requirement is that the hospital has to give treatment to 40% of its total outpatients. 41. When concession is sought to be availed of on the satisfaction of the condition precedent that conditions in the notification has to be construed strictly against the persons availing the concession. When 10% of the beds have to be reserved for persons belonging to a particular category ie, persons earning less than Rs.500/- p.m., it is no use in saying that no person belonging to the category has complained that the hospital has not provided them with free bed. As a matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the 10% of the total number of beds are supposed to be reserved for patients of such families in the hospital where the equipment is installed. However, it is stated that this Respondent relied upon the observations of Hon'ble Supreme Court in the Mediwell Hospital case who have clearly interpreted the 64/88-Customs notification. The impugned order of cancellation of CDEC is strictly in the light of observations of the Hon'ble Apex Court in the above judgment. ARGUMENTS ON BEHALF OF THE RESPONDENTS : 44. The learned Additional Solicitor General of India appearing on behalf of the respondents 1 and 2 objected the contentions raised on behalf of the petitioners by stating that the 2nd respondent / Director General of Health Services, New Delhi is not strictly bound by the recommendations made by the State Government. As per the Notification 64/88, the Director General of Health Services is empowered to look into the manner through which the conditions are complied with and to ensure that the purpose and object of those conditions are fulfilled, since exemption from payment of customs duty is granted based on the undertaking given by the institution. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atment to all indoor patients, whose income is less than Rs.500/- p.m. Therefore, the CDECs issued to the petitioner Institute were conditional subject to fulfillment of these conditions. But the petitioners/hospitals failed to comply with the conditions. Thus, the CDECs were rightly withdrawn in view of the observations made by the Hon'ble Supreme Court in Mediwell Hospital case (cited supra) . 46. The learned Additional Solicitor General of India reiterated that the judgment of Hon'ble Supreme Court in Mediwell Hospital case (cited supra) which was subsequent to repealing of the notification No.99/94- Customs dated 1.3.94 had held that there is a continuing onus on the part of beneficiary institution to fulfill the said obligations. The Apex Court observed that the objective must be achieved at any cost and the very authority who have granted such certificates of exemption would ensure that the obligation imposed on the persons availing of the exemption notification are being duly carried out and on being satisfied that the said obligations have not been discharged, they can enforce realization of the customs duty from them . 47. The Department of Revenue vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted by the respondent. A Perusal of the condition in the Notification indicates that on an average, at least 40 per cent of all outdoor patients should be provided free treatment. It is, thus, at least 40 per cent or may be above. It is submitted that condition nowhere indicates that within what period, the prescribed percentage is to be achieved. It is submitted that it should be during the life of the equipment imported. Thus, shortfall of particular year may be made good in the following year. We are not impressed by this argument. It would not at all, be necessary to prescribe any period to achieve the given percentage of patients treated free. It should generally be all through the period. It being at least 40 per cent, there is hardly any occasion to say that in case there is more than 40 per cent in a given period, that may make good the deficiency in the previous or the following year. In any case, over and above all, it has not been in dispute that the Centre did not have inpatient facility. According to the condition of notification 10% of total beds in hospital, are to be kept reserved for patients of the families having an income of less than Rs.500/- per month. The ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout the globe, have recognized right to health as a basic human right. In India, though right to health is not recognized as a fundamental right expressly, the judiciary by its expounded role has recognized it as a fundamental right under Article 21 of the Constitution as an adjunct to the right to life . The responsibility to respect, protect and fulfill the right to health lies not only with the medical profession but also with public functionaries such as administrators and judges. 55. Some of the important pronouncements on this issue are given hereunder. The Supreme Court, while interpreting Article 21 of the Constitution ruled that the expression life does not connote mere animal existence or continued drudgery through life but includes, inter alia, the opportunities to eliminate sickness and physical disability. 56. In Francis Coralie Mullin v. Union Territory of Delhi , 1981(1) SCC 608, it was held that, right to life guaranteed in Article 21 of the Constitution in its true meaning includes the basic right to food, clothing and shelter. 57. The Apex Court, in Paschim Banga Khet Mazdoor Samity v. State of West Bengal , (1996) 4 SCC 37, while widening the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62. The Apex Court, in its landmark judgment in Pt.Parmanand Katara v. Union of India,AIR 1989 SC 2039, ruled that every doctor whether at a government hospital or otherwise has the professional obligation to extend his service with due expertise for protecting life, whether the patient be an innocent person or be a criminal liable to punishment under the law. No law or state action can intervene to avoid/delay, the discharge of the paramount obligation cast upon members of the medical profession. 63. In CESC Ltd. v. Subash Chandra Bose, AIR 1992 SC 573,585 : (1992) 1 SCC 461, the Supreme Court relied on international instruments and concluded that right to health is a fundamental right. It went further and observed that health is not merely absence of sickness: The term health implies more than an absence of sickness. Medical care and health facilities not only protect against sickness but also ensure stable manpower for economic development. Facilities of health and medical care generate devotion and dedication to give the workers best, physically as well as mentally, in productivity. It enables the worker to enjoy the fruit of his labour, to keep him physically fit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 4 January, 2018, the High court of Karnataka has held on para 14, 16, 19, 20 and 21 as follows : 14. Beyond a pale of doubt, the provisions relating to exemption from tax or duties have to be strictly construed and except upon satisfaction of the conditions for grant of such exemptions stricto sensu, the exemption from customs duty cannot be given by way of largesse to the beneficiaries, like Hospitals and Medical Institutions in the present case. 16. Be that as it may, the situation as per the terms of Division Bench's judgment in these circumstances thus reverted back to the conditions as stipulated in the Custom Notification No.64/88-Cus. dated 1.3.1988 and therefore, satisfying of the conditions of that Notification stricto sensu became sine qua non for the petitioners to establish before the concerned Authorities. 19. The facts stated in the impugned order Annexure-A dated 23.1.2015 that CDECs (Exemption Certificates) issued to as many as 392 out of 396 Institutions were revoked is a glaring one. It reflects a gross abuse of such customs duty exemption given to the petitioner-Hospitals and other Institutions. Exemption from tax or customs duty is a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Needless to mention the Government has granted exemption from payment of customs duty with the sole subject that 40% of all outdoor patients and entire Indoor patients of the low income group whose income is less than Rs. 500 per month, would be able to receive free treatment in the institute. The objective must be achieved at any cost, and the very authority who have granted such certificate of exemption would ensure that the obligation imposed on the persons availing of the exemption notification are being duly carried out and on being satisfied that the said obligations have not been discharged they can enforce realisation of the customs duty from them. 68. In the case of All India Lawyers Union (Delhi Unit ) vs Govt of Nct Delhi and ors : 15. The words used in the notification apart, the purpose underlying the exemption unquestionably was to grant exemption only to hospitals, where the prescribed percentage of patients from the poorest of the poor sections of the Society with a family income of no more than Rs.500/- per month could get free treatment. It was contended by Mr. Shevgoor and perhaps rightly that in the current economic scenario with the purchasing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulation 1.8 is extracted hereunder: 1.8 Payment of Professional Services: The physician, engaged in the practice of medicine shall give priority to the interests of patients. The personal financial interests of a physician should not conflict with the medical interests of patients. A physician should announce his fees before rendering service and not after the operation or treatment is underway. Remuneration received for such services should be in the form and amount specifically announced to the patient at the time the service is rendered. It is unethical to enter into a contract of no cure no payment . Physician rendering service on behalf of the state shall refrain from anticipating or accepting any consideration. 56. Under Regulation 2.1 it is provided that in the case of emergency the physician must treat the patient. No physician shall arbitrarily refuse treatment to a patient. 59. The realization of human rights vests responsibilities upon the State. The State has to constantly make an endeavor for realization of human rights agenda, particularly in relation to economic, social and cultural rights. Right to health is provided in Article 25 of Univer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof, by excluding consumable items, the import of which is approved either generally or in each case by the Government of India in the Ministry of Health and Family Welfare, or by the Directorate General of Health Services to the Government of India, as essential for use in any Hospital specified in the Table below and the Table reads as under: TABLE All such hospitals as may be certified by the said 1. Ministry of Health and Family Welfare, to be run or substantially aided by such charitable organisation as may be approved, from time to time, by the said Ministry of Health and Family Welfare. All such hospitals which may be certified by the said 2. Ministry of Health and Family Welfare, in each case, to be run for providing 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 percent of all their outdoor patients; and (b) free to all indoor patients belonging to families with an income of less than rupees five hundred per month, and keeping for this purpose at least 10 percent of all the hospital beds reserved for such patients and (c) at reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Government Authorities conducted an inspection and submitted a report. Based on the report, the Government of Tamil Nadu recommended for issuance of CDECs. The petitioners state that the recommendation was made based on the inspection conducted by the Medical Authorities of the State Government and therefore, it is binding on the Director General of Health Services, New Delhi. 77. In this context, mere recommendation would not confer any right on the person to claim exemption. The authority, who granted exemption invoking the powers under the Customs Act, 1962 is empowered to consider the issues based on factual aspects and has got power to draw inferences, if any discrepancies are found in the recommendations. It is not as if mere recommendation is a binding factor for grant of exemption. The Authority i.e., the Central Government in the present case has got powers to scrutinise the manner in which the recommendations are made with reference to the conditions imposed and such power cannot be disputed by the petitioners and therefore, the contentions of the petitioners that recommendation of the State Government is binding on the Central Government is unacceptable. 78. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission in the hospital. Therefore, the Central Government while issuing notification No.64/88 thought fit that out of 40% outdoor patients, 10% beds are to be reserved for such patients, who all are treated at free of cost in the petitioners/hospitals. Conditions (a) and (b) in the table must be read together and cogently in the context of the purpose and object sought to be achieved by granting exemption from payment of customs duty. The conditions cannot be read in isolation. It is not as if the petitioners can conduct medical camps outside the hospital in order to satisfy the condition and to escape from their committed liability, which would be more beneficial to the poorest of the poor people. Thus, it is unambiguous that the condition imposed must be understood as 40% of their outdoor patients must be treated free of cost in the petitioners hospital, wherein the imported medical equipments are installed and 10% of the beds are to be reserved in the very same hospital, where the treatment are provided through the imported medical equipments, apparatus, etc., which all are benefited from and out of the exemptions from customs duty. 83. Yet another point raised by the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being satisfied that the said obligations had not been discharged, they can enforce realisation of the customs duty from them. 87. No doubt, in the Mediwell Hospital and Health Care Private Limited case(cited supra ) , the Hon'ble Supreme Court of India made an observation that the hospitals should notify in the local newspaper every month, the total number of patients they have treated and whether 40% of them are indigent persons, earning income less than Rs.500/- per month. However, such notification was found to be not practicable in the subsequent judgment of the Apex Court of India. Therefore, whether or not the petitioners are notifying in the local newspaper as per the Mediwell Hospital and Health Care Private Limited case(cited supra ) , but they are obligated to comply with the conditions scrupulously since they have availed the benefit of exemptions from customs duty. Thus, the contentions of the petitioners that such notification was subsequently negatived by the Apex Court may not be relevant in the context of complying with the conditions in its letter and spirit. 88. However, in Faridabad CT Scan Centre's case (cited supra ), the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved by making payment of expenditure incurred on some inpatients in some other hospital as alleged. It has also not been shown that alleged arrangements had the approval of the concerned authority or that it was brought to their notice at all . 91. Therefore, the Hon'ble Supreme Court of India in the above cases unambiguously clarified that the purpose and object sought to be achieved through notification with reference to the exemption clause must be considered. Conducting outdoor camps in any other place for general diseases without utilising the imported equipments cannot be considered for the purpose of compliance of the conditions stipulated in the exemption notification. 92. Again another Three Judges Bench of the Hon'ble Supreme Court of India in the case of Sri Sathya Sai Institute of Higher Medical Sciences Vs. Union of India (cited supra) decided in the year 2003, held that the judgment in Mediwell's case and also the order of reference. We are of the view that when it was the prerogative of the Government to grant exemption, it was for them to impose appropriate conditions for the same . Specifically, the Three Judges Bench overruled paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idences, since the High Court remitted the matter back for fresh consideration. While considering the issues afresh, the authorities ought not to have made an observation that the High Court has committed an error or the observations made in the order are contrary to law. In this regard, the conduct of the authority stands deprecated. However, the said erroneous observations or unwarranted comments made by the authority against the High Court, cannot be a ground to invalidate the order, which is otherwise passed on merits. 97. With reference to the issue regarding the compliance of the clause in notification No.64/88, the Director General of Health Services categorically found that the petitioners hospital are the beneficiaries under the Notification dated 01.03.1988. The compliance of conditions are continuing onus. The hospitals were given ample opportunities to substantiate their claim that they have fullfilled the conditions stipulated in the notification. The hospitals have furnished informations regarding the free treatment provided based on the conditions. The Director General of Health Services formed an opinion that the medical services provided by the hospitals through ..... X X X X Extracts X X X X X X X X Extracts X X X X
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