JUDGMENT

A.K. Sikri, J.

1. The Appellant herein, which is the successor of M/s. Wockhardt Hospital and Heart Institute (referred to as the 'Institute' hereinafter) had a hospital at Bangalore. Sometime in the year 1990, the said Institute imported a Cardiac Catherization Laboratory (known as Angiography system) with its spares/accessories valued at Rs. 1,14,23,471/-. The said Institute applied for exemption from payment of import duty taking shelter under the Notification No. 64/88-cus dated 01.03.1988. This notification provides for exemption on medical equipment imported against Custom Duty Exemption Certificate issued by the Director General of Health Services. Apart from the said certificate, there are certain other conditions which are mentioned in the notification that need to be satisfied to avail the exemption. These conditions are as under:

All such hospitals which may be certified by the said 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 per cent of all their outdoor patients; an