Holding

The appellant is not entitled to a change of categorisation because the withdrawal of the CDEC terminated its exemption rights, and a post‑withdrawal representation cannot be entertained.

Summary

Jaslok Hospital obtained a Customs Duty Exemption Certificate (CDEC) under para 2 of the 1988 Notification for importing equipment. The DGHS cancelled the CDEC on 14 November 2000 for failure to provide the free treatment stipulated in para 2. After three years, the hospital sought re‑categorisation under para 1, which was rejected. The hospital challenged the rejection in the High Court, which dismissed the petition. On appeal, the Supreme Court held that the withdrawal of the CDEC extinguished any entitlement to exemption under any clause, and a request for change of category filed after the withdrawal could not be entertained. Consequently, both appeals were dismissed.

Issues considered

Whether a hospital whose Customs Duty Exemption Certificate has been withdrawn can seek a change of categorisation under the Notification.
Whether a representation filed after the withdrawal of the exemption certificate is maintainable.

Subjects

Customs Duty ExemptionCategorisationPara 1Para 2Withdrawal of certificateAdministrative lawHospitalFree treatment condition

Judgment

/

JASLOK HOSPITAL & RESEARCH CENTRE A
v.
UNION OF INDIA AND ORS.

OCTOBER 31, 2007
B
;.,_ [ASHOK BHAN, HARJIT SINGH BEDI AND
V.S. SIRPURKAR, JJ.]
.
,.)

Customs Duty:
ExemptionNotificationNo. 64188-Cus. Dated 1.3.1988-Table__,_ c
Paras I and 2-Assessees granted Customs Duty Exemption
Certificates under para 2-CDEs withdrawn for violation of
conditions for grant of exemption-Three/four years thereafter
assessees claiming change in categoryfrom para 2 to para 1-HELD:
Effect of withdrawal of CD Es is that assessees are not entitled to D
exemption under any clause of Table annexed to the Notification,
therefore, no question of change of category would arise-Besides,
change of category was sought after three/four years of withdrawal
of CD Es-It was clearly an afterthought in order to overcome
assessees 'failure to comply with conditions for grant ofexemption. E
Appellant in CA No. 7284 of 2005 obtained Customs Duty
Exemption Certificate for import of hospital equipments under
Notification No. 64/88-Cus. Dated 1.3.1988 for the period betweeh
-;!, 1988and1994. The appellant was categorized under para 2 of th~ F
Table annexed to the Notification. The said certificate was cancelle~
by communication dated 14.11.2000 on the ground that the appella~t
hospital failed to comply with the condition laid down in para 2 to
provide free treatment to the patients mentioned therein. After laps~
of3 years from the date ofwithdrawal of the exemption the appellant
G
made a representation for being categorized under para 1 of the
>- Table annexed to the Notification. The representation having been
rejected, the appellant filed a writ petition. The High Court declined
to grant the relief holding that the appellant having enjoyed the
733 H
734 SUPREME COURT REPbRfs [26o1j ii S.C.R: y

A benefit under para 2 for fifteen years could not claim change in the
rat~gHHzinon.

In the instant appeals; relying upon the case of Share Medical
Care'. it was contended for the appellants that they were entitled to
B claim change in categorization and the authority concerned erred in
holding otherwise.

Dismissing the appeals, the Court

HELD: 1. The appeliant in CA No. 7284 ot2005 is not entitled
C to the relief sought for. The appellant had given up its challenge to
the comm.Uliication dated 14th November, 2000 cancelling/
withdrawing the CDE.Cs issued to it in terms of para 2 of the Table
annexed to the Notification, for having violated the conditions laid
down for grant of exemption. The effect of the withdrawal of CDEC
D . is that the appellant is not entitled to the exemption under any of
the clauses of the Notification on or after 14th November, 2000 and,
~herefore, no question of change of its category would arise. Such a
change ~otild only be possible if the appellant had applied for change
otits categorization before the issuance of the communication of the
DGI:iS dated 14th November, 2000 withdrawing/cancelling the
E CDECs. Besides this, the change of categorization sought after a
lapse of three years of the withdrawal/cancellation of the CDECs
could not be entertained at the sweet will of the appellant. It is clearly
an after-thought in order to overcome the failure on the part of the
appellant to comply with the conditions laid down in para 2.
F [Para 17 and 18] [739-A, B, C, D, E]

2. The appellant in the CA. no. 5054 of 2007, filed the
representation after a lapse of four years of the withdrawal/
cancellation of the CDECs, which could not have been entertained
G and the High Court has rightly upheld the order of rejection of the -{
change of categorization. [Para 19] (739-F]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7284 of
2005.
H 1. r20011 3 scR 44 =r20011 4 sec 573
.t
/

JASLOKHOSPITAL&RESEARCHCENTREv. UNION OF 735
INDIA [BHAN, J.]
From the final Judgment and Order dated 17.12.2004 of the High A
Court of Judicature at Bombay in Writ Petition No. 2613Qf200~.
WITH
C.A. No. 5054of2007.
AnmJaitley, Gaurav Sharma, Pratibha Singh, Sumeet :BMtla, Surbhi B
...l
Mehta (for Maninder Singh), V. Lakshmikurrmt:ln and Alok Yadav (fqr
..> M.P. Devanath) for the Appellant.
Amrendra Sharan, ASG., K. Radhakrishnan, A.K. Srivastava, Bin~
Tamta, C.V.S. Rao, Sushma Suri and B. Krishna Prasad for the
Respondents.
c
The Judgment of the Court was delivered by
BHAN, J. 1. Leave granted in special leave petition No. 11511 qf
2006.
D
-r·
I 2. This judgment shall dispose of Civil Appeal No. 7284 of 200$
and the Civil Appeal arising out of SLP© No. 17577 of2006.
3. C.A. No. 7284/2005 is directed against the judgment and order
passed by the High Court of Judicature at Bombay in CWP No. 2613
E
of 2004 dated 17th December, 2004 whereby the High Court has
dismissed the writ petition filed by the appellant.
4. The Civil Appeal arising out of SLP© No.17577 is directed
against the order dated 21st September, 2006 passed by the same High
;:! Court in Writ Petition No.5594/2006. F
5. The latter case has been dismissed by the High Court on the basis
of the findings recorded in the order dated 17th of December, 2004
passed in WP No.2613/2004 Mis. Jaslok Hospital and Research'
Centre v. Union of India & Ors.
G
6. As the point involved in both the appeals is identical, the appeals :
are taken up for disposal together by this common Judgment.
7. For the convenience ofreference, the facts are taken from C.A.
No.7284i2005.
I
H
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-1
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736 SUPREME COURT REPORTS [2007] 11 S.C.R.
"(

A 8. The appellant obtained Customs Duty Exemption Certificate (for
short 'CDEC'), from the Directorate General of Health Services (DGHS),
for import of various hospital equipments under Notification No.64/88-
Cus. Dated 1st March, 1988 (for short "the Notification"). CDECs issued
to the appellant relate to import of medical equipments for the period
B between 1988 and 1994. The CDECs certified that the appellant was
covered under para 2 of the Table annexed to the Notification. The same ,A
reads as under:
"\
'TABLE

c 1. All such hospitals as may be certified by the said Ministry of
Health and Family Welfare, to be run or substantially aided by such
charitable organization as may be approved, from time to time, by
the said Ministry of Health and Family Welfare.
2. All such hospitals which may be certified by the said Ministry
D of Health and Family Welfare, in each case, to be run for providing
medical, surgical or diagnostic treatment not only without any "1'' \

distinction of caste, creed, race, religion or language but also, -
(a) free, on an average, to at least 40 per cent of all their
outdoor patients; and
E
(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 per cent of all the hospital
beds reserved for such patients; and
~

(c) at reasonable charges, either on the basis of the incolne ·of .".
F
the patients concerned or otherwise, to patients other than
those specified in clauses (a) and (b)."
9. The said CDECs were cancelled/withdrawn by the Directorate
General of Health Services (DGHS) vide its communication bearing No.
G Z.37024/13/92-MG dated 14th November, 2000 addressed to the Chief
~
Executive Director of the appellant, on the ground that the appellant-
hospital had failed to comply with the conditions laid down in para 2 of
the Table annexed to the Notification extracted above.

H 10. After about three years, the appellant made a representation to
I
I
JASLOK HO SPITAL & RESEARCH CENTRE v. UNION OF 737
"r INDIA[BHAN,J.]
the Secretary, Ministl)' of Health and Family Welfare on 24th September, A
2003, seeking categorization under para 1 (extracted below) instead of
para 2 of the Table annexed to the Notification.·
"l.
organization as may be approved, from time to time, by the said B
Ministl)' of Health and Family Welfare"
11. The said representation came to be rejected by the DGHS vide
its order dated 18th March, 2004.
12. Against the rejection of its aforesaid representation, the appellant c '
filed the Writ Petition in the High Court, challenging the communication
dated 14th November, 2000 issued by the DGHS, canceling I
withdrawing the CDECs granted to the appellant, and the order dated
18th March, 2004, declining to categorize the appellant under para 1 of
the Table annexed to the Notification. During the course of hearing before D
the High Court, Counsel for the appellant did not press the prayer for
setting aside the communication dated 14th November, 2000 and
confined the challenge only to the order dated 18th March, 2004 passed
bytheDGHS.
13. Till the year 2003, the appellant accepted and was rather satisfied E
of its being categorized under para 2 of the Table annexed to the
Notification. It was only after the withdrawal/cancellation of the said
CDECs by the communication dated 14th November, 2000 and, that
too, after a lapse of almost three years, that the appellant made a
. -:i representation to the Secretary to the Ministry of Health and Family f
(
Welfare for being categorized under para 1 of the Table annexed to the
Notification.
14. The representation of the appellant, as stated above, was
rejected by the DGHS on the ground thatthe State Government had
recommended the appellant's case only under para 2 of the Table annexed G
to the Notification which, inter alia, stipulates that the hospital has to
provide free treatment to 40 per cent of the outdoor patients and to all
indoor patients whose income is less than Rs.500/- per month.
15. The High Court, by the impugned order, has upheld the order H
-t
738 SUPREME COURT REPORTS [2007] 11 S.C.R.
y'

A passed by the DGHS. It has been held that the order passed by the DGHS
is not based on irrelevant or extraneous considerations. That the appellant
could not claim change in the categorization after having enjoyed the
benefit under para 2 of the Table afinexed to the Notification for abol.11
fifteen years. During the said period of fifteen years, the appellant did not
B raise any grievance with regard to its non-categ01ization under para 1 of
the said Table and its categorization under para 2 thereof. A
16. Counsel for the appellant contends that the appellant was entitled '';

to claim change in the categorization and the DGHS has erred in holding
that the appellant was not entitled to claim change in its categorization
c from para 2 to para 1 of the Table annexed to the Notification. In support
of his submission, the learned Counsel had relied upon a judgment of this
Court in the case of Share Medical Care v. Union of India & Ors.,
[2007] 4 sec 573 wherein it has been held, thus:
"In the instant case, the ground which weighed with the Deputy
D Director General (Medical), DGHS for non-considering the prayer
~
of the appellant was that earlier, exemption was sought under
category 2 of exemption notification, not under category 3 of
exemption notification and exemption under category 2 was
withdrawn. This is hardly a ground sustainable in law. On the
E contrary, well settled law is that in case the applicant is entitled to
benefit under two different Notifications or under two different
Heads, he can claim more benefit and it is the duty of the
authorities to grant such benefits if the applicant is otherwise entitled
to such benefit. Therefore, non-consideration on the part of the
F Deputy Director General (Medical), DGHS to the prayer of the r.-
appellant in claiming exemption under category 3 of the notification
is illegal and improper. The prayer ought to have been considered
and decided on merits. Grant of exemption under category 2 of
the notification or withdrawal of the said benefit cannot come in
G the way of the applicant in claiming exemption under category 3 if
the conditions laid down thereunder have been fulfilled. The High -'\,_
Court also committed the same error and hence the order of the
High Court also suffers from the same infomity and is liable to be
set aside."
H
I
}
/
JASLOK HOSPITAL & RESEARCH CENTRB'v. UNION OF 739
"Y INDIA [BHAN, J.]
17. Without going into the question regarding applicability or A
otherwise of the decision referred to above, y.fe are of the view that the
appellant is not entitled to the relief sought for. ,The appellant had given
up its challenge to the communication dated 14th November, 2000
cancelling/withdrawing the CDECs issued to the appellant for having
violated the conditions laid down for grant of exemption. The effect of B
A the communication dated 14th November, 2000 is that the appellant is
not entitled to the exemption under any of the clauses of the aforesaid
.>
Notification on or after 14th November, 2000. The representation made
by the appellant after a lapse of three years of the cancellation/withdrawal
of the CDECs cannot be entertained, as the change of its category would
not arise as the appellant's categorization under para 2 of the Table
c
annexed to the Notification had already been withdrawn. Such a change
could only be possible if the appellant had applied for change of its
categorization before the issuance of the communication of the DGHS
dated 14th November, 2000 withdrawing/cancelling the CDECs.
.,.. 18. Apart from this, the change of categorization was sought after a
D

lapse of three years of the withdrawal/cancellation of the CDECs. Such
a representation could not be entertained a(ter a lapse of three years at
the sweet will of the appellant. The representation filed by the appellant
in 2003, seeking change of category from para 2 to para 1 of the Table E
annexed to the Notification, is clearly an after-thought in order to
overcome the failure on the part of the appellant to comply with the
conditions laid down in para 2 of the Table annexed to the Notification.
The same could not be entertained after such a lapse of three years of
.,1
the communication dated 14th November, 2000.
F
19. In the Appeal arising out of SLP© No. 17577 of 2006, the
representation was filed after a lapse of four years of the withdrawal/
cancellation of the CDECs, which, as held in the preceding paragraphs,
could not have been entertained and the High Court has rightly upheld
the order of rejection of the change of categorization. G
20. For the reasons stated above, we are not inclined to interfere
with the orders passed by the High Court. The Civil Appeals are,
therefore, dismissed with no order as to costs.
RP. Appeals dismissed. H