- (1.)This appeal is placed before us in view of the order of reference made by two learned Judges of this Court dated 17.01.2008. The Referral order reads as under:
"One of the premises on the basis whereof the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bangalore proceeded to fasten the liability upon the Appellant herein is that the diagnostic centers would not be entitled to the benefit of any exemption for payment of customs duty under Notification No. 64/88 dated 1.3.1988, which was in force for the period 1.3.1988 to 1.3.1994. It appears that the aforementioned findings are based on a stray observation made in paragraph 10 of a Division Bench Decision of this Court in Mediwell Hospital & Health Care Pvt. Ltd. v. Union of India and Ors., 1997 1 SCC 759 which is to the following effect:

"Thus a diagnostic centre run by a private individual purely on commercial basis may not be entitled to the exemption under the notification issued by the Central Government."

Our attention, however, has been drawn to the said notification dated 1.3.1988 from a perusal whereof it appears that the Explanation appended to paragraph 4 thereof defines "Hospital" for the purpose of the said notification, to include any institution, centre, trust, society, association, laboratory, clinic and maternity home which renders medical, surgical or diagnostic treatment. To us the said definition appears to be a broad one which inter alia may include any clinic where diagnostic treatment is rendered. Moreover, Appellant although a Limited Company is administered by a trust. Its founders and promoters and their sister institutions are well known in the field of cancer research.

Incidentally, we may notice that a part of paragraph 11 and paragraph 14 of the aforesaid judgment have been overruled by this Court in Faridabad C.T. Scan Centre v. D.G. Health Services and Ors., 1997 7 SCC 752 and Sri Sathya Sai Inst., High. Medi. Sciences v. Union of India, 2003 158 ELT 675 respectively.

It is useful also to place on record that a large number of decisions rendered by the CESTAT, including Surlux Diagnostics Ltd. v. Collector of Customs, Bombay,1994 71 ELT 569, have held that a diagnostic center situated in the premise of a Hospital even though owned by different party would answer to the description of the term "Hospital". Learned Additional Solicitor General has also drawn our attention to a decision of the Andhra Pradesh High Court, which also we would like to place on record, in the case of Kailash Diagnostic and Research Center P. Ltd. v. D.G. of Health Services, 2003 153 ELT 281.

We, therefore, are of the opinion that with a view to declare the law clearly on the subject, the matter should be considered by a larger Bench. We are, therefore, of the opinion that the matter should be referred to larger Bench.

Let the records of this case be placed before Hon'ble the Chief Justice for passing appropriate orders".

This Court while referring the matter were not prepared to accept the observations made by two Judges Bench of this Court in the case of Mediwell Hospital & Health Care Pvt. Ltd. v. Union of India and Ors., 1997 1 SCC 759, wherein the Court has observed as under:

"..Thus a diagnostic centre run by a private individual purely on commercial basis may not be entitled to the exemption under the notification issued by the Central Government...".

(2.)The Central Government has issued Notification No. 63/88-CUS, dated 01.03.1988 granting exemption to hospital equipments imported by specified category of hospitals (charitable) subject to certification from the Directorate General of Health Services (for short, "the DGHS") to the Government of India. We are not going into the conditions that are prescribed for seeking exemption under the aforesaid notification. For the purpose of answering the reference, it is suffice to extract only the explanation appended to the notification dated 01.03.1988. The explanation reads as under:
"Explanation - For the purposes of this notification, the expression "Hospital" includes any Institution, Centre, Trust, Society, Association, Laboratory, clinic and Maternity Home which renders medical, surgical or diagnostic treatment."

(3.)It would be pertinent at this stage to take note of the rules regarding the interpretation of the word 'includes' as has been used in the given notification above. Furthermore, we would take note of the well-established and settled principles of law with regard to the construction of a notification, and in particular an exemption: notification as existing in the given reference.