GUJARAT METHODIST CHURCH CARDIOTHORACIC Vs. UNION OF INDIA

JUDGEMENT

(1.) The facts of the case as appearing in the petition are that the petitioner is a public charitable trust duly registered under the provisions of the Bombay Public Trusts Act and is also a society registered under the Societies Registration Act. The society is approved by the Government of India as eligible to receive gift supplies under Indo-U.S. agreement. Since it was felt that there was a necessity for establishing a State of the Art Hospital in Gujarat encompassing research and latest surgical and operation techniques and procedures to cater to all persons, irrespective of caste, creed or economic criteria, a project was mooted to set up such a hospital at Nadiad, which was established, interalia by donation of acres of land by the Methodist Church and trust fund of Shri Dharamsinh Desai Foundation, corporate bodies and well-wishers. The hospital was named as Dharamsinh Desai Memorial Methodist Institute of Cardiology and Cardio-vascular Surgery. For the purpose of the hospital, the petitioner imported Cardiac Catherisation Laboratory from Siemens, Germany which was used for coronary angiography as well as for angioplasty. It is used to diagnose heart defects, to take blood samples and pressure readings from different parts of the heart and for imagination of coronary arteries, heart chambers, and major blood vessels and also for treatment purposes like Balloon Valvuloplasty etc.

(2.) By its letter dated 18th March, 1994, the second respondent granted Customs Duty exemption certificate for import of the aforesaid equipment. Accordingly, the equipment was duly imported and cleared without payment of duty in accordance with the exemption granted under Customs Notification No.64/1988 dated 1st March, 1988. Though the date of arrival of the subject equipment at Bombay Port was 9th September, 1993, it was cleared and brought to Nadiad much later. On account of non-receipt of structural plans necessary for installation from Bombay and Germany, there was a delay in setting up the equipment. There was further delay in setting up peripheral facilities like air-conditioning, electrical fittings etc. and the delay by the Company itself, that is, three months for carrying out its actual installation, the subject equipment became operational on 28th March, 1996. It is the case of the petitioner that insofar as the hospital was concerned, the Out Patient Department was started on a limited basis in January, 1995 and was extended since April, 1995 and the hospital started functioning on full-fledged basis from January, 1997.

(3.) On 22nd January, 1998, the Assistant Commissioner, Ahmedabad effected seizure of the subject equipment without any intimation whatsoever. The petitioner was, therefore, constrained to move a writ petition before this court being Special Civil Application No.1181/1998 for lifting the seizure of the equipments. The said petition came to be disposed of in view of the stand of the authorities that there was no bar on utilisation of the equipment. The duty exemption certificate dated 18th March, 1994 was granted on the basis that the hospital fell within Item No.4 of the table to the Notification, being a hospital in the process of being established, which when functioning would be relatable to a hospital specified in para 1, 2 or 3 of the said table. It appears that initially the petitioner had indicated that it would be governed by para 2 which covered hospitals run for private medical, surgical or diagnostic treatment without any distinction of caste, creed, religion or language and free on an average to at least 40% of outdoor patients and free to indoor patients of families with income of less than Rs.500/- per month. However, since the petitioner thereafter realised that the hospital would also fall within para 1 of the table, being hospital run or substantially aided by charitable organisation as approved from time to time by the Ministry of Health and Family Welfare, on 6th February, 1998, the petitioner applied for an approval of the hospital under Category-1 of the Notification. During the pendency of the aforesaid application, a show-cause notice cum duty demand notice dated 19th February, 1998 came to be issued by the Commissioner of Customs (Import) (the third respondent herein) on the ground that the installation and hospital running certificate had not been submitted by the petitioner and that it was not providing free treatment on an average to at least 40% of the outdoor patients. The petitioner gave reply to the show-cause notice on 22nd March, 1998 contesting the factual foundations alleged in the show-cause notice. On 5th March, 1998, the petitioner applied to the second respondent through the Director of Health Services, Government of Gujarat for issuance of Installation Certificate as postulated in the notification. In response to the said application, by letter dated 20th May, 1998, the second respondent called upon the petitioner to furnish information to enable it to exempt the case. The petitioner furnished all the relevant data regarding the importation, installation and working of the subject equipment by its letter dated 1st June, 1998. The Government of Gujarat after due verification also recommended the grant of installation certificate to the petitioner by its letter dated 21st July, 1998. The petitioner has thereafter continued to operate the subject equipment. It is the case of the petitioner that the hospital has been organising regular medical camps wherein it is providing free medical facilities. The details regarding the number of camps organized as well as the number of patients provided treatment therein in the last five years, have been set out in a table which has been annexed alongwith the petition. The hospital has undertaken 1200 open heart surgeries, 2400 angiography, 300 Balloon Pulmonary Valvuloplasty and 90 permanent Pacemakers up to April, 2004 and maintains scrupulous records which can be easily verified by the authorities.