Customs, Excise and Gold Tribunal - Mumbai
Charan Brothers vs Collector Of Customs on 23 January, 1987
Equivalent citations: 1987(13)ECC213, 1987(12)ECR788(TRI.-MUMBAI), 1987(30)ELT842(TRI-MUMBAI)
ORDER K. Gopal Hegde, Member (J)
1. This appeal arises out of and is directed against order-in-appeal bearing No. S/49-235/86-L(ACU) dated 25-6-1986 passed by the Collector of Customs (Appeals), Bombay.
2. The appellants M/s. Charan Brothers imported medical instruments, such as, Endo Cardial and Cardiac Pulse Generator, Programmer totally valued at Rs. 66,957/- and sought clearance under OGL under Appendix 6 of the A.M. Policy 1985-88. The Customs, however, objected to the clearance of programmer only on the ground that it was not covered by Appendix 6. The Asstt. Collector of Customs, Air Cargo who held the adjudication ordered confiscation on the ground that the programmer is not a permanent attachment required for Pace Maker and therefore it is not an accessory. He, however, allowed redemption on payment of fine of Rs. 7,500/-. On appeal, the Collector (Appeals) rejected the appeal by observing :-
"I have gone through the certificates and find that these certificates very clearly indicate that the Programmer is not an accessory to the Pace Maker but is used for changing the preset parameters of the Pace Maker. In that sense, it cannot be called an accessory to the Pace Maker.
I, therefore, agree with the order and findings of. the lower authority and reject the appeal."
Sd./- S.K. Malhi Collector of Customs (Appeals), Bombay
3. Shri C.S. Bharathi, the appellant's learned Advocate characterised the order of the Collector (Appeals) as totally erroneous and the result of mis-reading of the certificate produced by the appellants before him. He urged that in the two certificates of the eminent Doctors produced before the Collector of Customs (Appeals) it was clearly stated that the Programmer is the accessory of the programmable pacemaker implantation and therefore the Collector (Appeals) committed an error. Shri Bharathi further submitted that the Asstt. Collector who adjudged the confiscation had accepted the function of the Programmer but he erroneously held that it is not an accessory of pacemaker. He submitted that the expression 'accessory' is defined in the Policy in paragraph 7, sub~para 14.
"Accessory (or attachment) means a part, sub-assembly or assembly that contributes to the effectiveness of a piece of equipment without changing its basic functions."
Shri Bharathi submitted that the Programmer contributes to the effectiveness of the Pace Maker without changing its basic functions and therefore it should be considered as an accessory, within the meaning of that expression. In support of his contention that the programmer is an accessory of the pacemaker, Shri Bharathi relied on the two certificates of the two Doctors produced before the Collector (Appeals) further relied on the certificates issued for Director of Medical Education by one Shri Shanmukha Rao, Hyderabad, wherein it is stated that the Programmer is an accessory of pacemaker, as certified by the Cardiologist and Cardio Thorasic Surgeon. He also relied on the certificate issued by the Director General of Health Services. The Director General had recommended exemption from payment of Customs duty for the programmer for pacemaker in terms of Notification No. 208, dated 22-9-1981. He has also relied on the Notification No. 367 of 86-Customs, dated 24th June, 1986 which is an amendment to the Notification dated 22-9-1981. Programmer for Pacemaker was included in the Schedule annexure to the Notification under heading "Life Saving Drugs or Medicine or Equipments".
4. Shri Bharathi further submitted that the Programmer has no independent use/function except in correcting the beat rate of the pacemaker and it is designed for that function only. Therefore, the capability to correct the pulse-rate of the pacemaker decides whether the programmer is an accessory/attachment to the pacemaker. As the programmer fulfills this function of correcting the pulse rate of the pacemaker, it is only an accessory of the pacemaker. He further contended that there must be a programmer for every pacemaker. He, therefore, prayed that the orders passed by the authorities below may be set aside, and the fine paid may be ordered to be refunded.
5. Shri Prabhu appearing for the Collector supported the orders passed by the authorities below. He, however, contended that programmer is not a permanent attachment of the pacemaker, and therefore it cannot be considered as an accessory. He adopted the reasonings of the Assistant Collector. As regards the certificates of the Director of Medical Education and Director of Health Services, Shri Prabhu urged that they were not produced before the lower authorities. The Director of Health Services relates to the duty exemption and therefore it has no relevance. Shri Prabhu, however, did not make any comment regarding the two certificates of the two Doctors which were produced before the Collector (Appeals). He also contended that Notification 367 ,of 86 relates to duty exemption and it has no relevance. Referring to entry 6 of Appendix 6, Shri Prabhu contended that accessories of pacemakers have been stated in the said entry and programmer is not one of them. He, therefore, prayed that the appeal may be rejected.
6. I have carefully considered the submissions made on both the sides. At the outset it has to be clarified that the order of the Collector (Appeals) is not an order in the eye of law. He did not independently consider the issue whether the programmer is an accessory of the pacemaker. Before the Collector (Appeals) the Consultant who appeared had drawn the Collector's attention to the certificates issued by the two eminent Cardiologists. The Collector (Appeals) states in his order that he had gone through the certificates and find that these certificates very clearly indicate that the programmer is not an accessory to the pacemaker but is used for changing the preset parameters of the pacemaker and in that sense it cannot be called as an accessory to the pacemaker. Shri Bharathi had referred to the two certificates produced before the Collector (Appeals). Shri Prabhu did not contend that those are not the certificates produced before the Collector (Appeals). In his certificate, Dr. B.S. Raju, M.D., D.M., Additional Professor of Cardiology, Department of Cardiology, Osma-nia Medical College certified that the pacemaker programmer (522-03) is the accessory of the programmable pacemaker implantation, without programmer it is impossible to alter any features of the programmable pacemaker. All the programmable pacemakers come with preset parameters i.e., rate, pulse width, sensitivity, amplitude, refractory period, mode etc. from manufacturers. The programmable features often needs to be changed from the preset values, could be prior to implantation, during implantation or after implantation to the changing need of the patients, also altering pacemaker characteristics non-invasively by programmability make operative revision unnecessary.
7. Head of the Department of Cardio Thorasic Surgery Osmania Medical College and Cardio Thoracic Surgeon, Nazam's Institute of Orthopaedics and Medical Specialities, Hyderabad has certified that all the programmable permanent pacemakers come with fixed preset values, parameters and features from the manufacturers. In order to change any parameters, features etc. to the changing need of the patients condition, it is.... must to have a pacemaker programmer (522-03) to alter the fixed parameters, could be prior to implantation or during implantation or post implantation. Not only the programmer which is an accessory of programmable pacemaker alters the preset features but makes operative revision unnecessary by programming non-invasively."
8. It is not clear how the Collector (Appeals) could take a view that the two certificates referred to above clearly indicate that the programmer is not an accessory to the pacemaker. The Collector (Appeals) does not give any reasons for his conclusions. Both the Doctors have in clear terms stated that the pacemaker programmer is the accessory of the programmable pacemaker. It was not the contention of the Department that the programmer imported by the appellants was not a pacemaker programmer. The function of the programmer has been clearly understood by the Asstt. Collector also. It is used to correct preset pulse rate of the pacemaker. From the certificates of the two Doctors, it is evident that the programmable features of the preset pacemakers often needs to be changed from the preset values and the pacemaker programmer, does the above function. Thus the programmer contributes to the effectiveness of the pacemakers. Therefore, pacemaker programmer has to be considered as an accessory within the meaning of that expression as defined in para 7(14) of the: Policy 1985-88.
9. List of life saving equipment allowed for import under OGL are specified in List 2 of Appendix 6. Item 9 in list 2 reads :
"Implantable cardiac pacemaker with accessories".
Shri Prabhu had relied on Item 1 in the list. It relates to D.C. Defibril-lators for internal and external use and pacemakers. The contention of Shri Prabhu that the accessories of pacemakers are listed in Item No. 1 is not correct. It is not disputed that if programmer is considered as an accessory of pacemaker then it could be imported as an OGL item. As has been observed earlier, as the programmer in question contributes to the effectiveness of the pacemaker it should be considered as an accessory. The contention of Shri Prabhu that since the programmer is not a permanent attachment of the pacemaker it therefore cannot be considered as an accessory, is untenable. An 'accessory' need not necessarily be permanently attached to an equipment.
10. The Govt. of India had issued a Notification No. 367 of 86 amend-ing the earlier Notification No. 208 of 81, dated 22nd Sept. 81. Under Notification dated 22nd Sept. 81 life saving drugs or medicines and equipments were exempted from payment of Customs duty. In the Notification originally issued programmer for pacemaker was not included. But by the amended Notification the programmer for pacemaker was also included and became exempt from payment of Customs duty. Thus even the Government of India treated the programmer for pacemaker as a life saving equipment. Undisputedly, the programmer as such has no independent function to perform. When it is attached to the pacemaker/it enhances the effectiveness of the pacemaker. Therefore, it has to be considered as an accessory.
11. On consideration of all the aspects, I hold that the view taken by the authorities below that the programmer of pacemaker is not an accessory of pacemaker, is erroneous. In the result, this appeal is allowed. The orders passed by the authorities below are set aside. The goods, namely, the programmers shall be released to the appellant..