Customs, Excise and Gold Tribunal - Delhi
Boston Scientific International B.V. vs Commr. Of Cus. on 22 August, 2002
Equivalent citations: 2003(151)ELT192(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. The issue raised in this appeal is whether Endoscope Stents are eligible for exemption from duty under SI. No. 348B of Notification No. 17/2001-Cus. Different types of Stents involved in the dispute are Uretheral Stents, Percuflex Stent, Pigtail Stent, Wall Stent, Biliary Stent, Biliary drawn Stent etc. SI. No. 348 covers the following goods namely :-
348. 90 or any other Chapter (A) Medical equipment (excluding Foley Balloon Catheters) and other Goods, specified in List 29.
(B) Accessories of the medical equipment at (A) above;
(C) Parts required for the manufacture, and spare parts required for the mainte-nance, of the medical equipment at (A)above (Fibre optic endoscopes are one of the medical equipment specified in the List 29).
2. The impugned order has held that the Stents in question do not fall in the category of accessories for endoscope and for that reason they are not eligible for the exemption. The impugned order has observed as under :-
"Endoscopy placement of Stents helps in avoiding traditional surgery. Therefore, it is clear that Endoscopes which are mainly used for diagnosis are also used for placing or stationing Stents at the required place. Therefore, it is clear that at best, Endoscopy can be called as a tool used for the proper placement of Stents and Stents are no way concerned with the functioning of the Endoscopes as such nor are they anywhere associated with the enhancement of the performance level of the Endoscopes nor do they add to the efficacy of the Endoscopes in the strict sense of the term. In other words, while an Endoscope can function without a stent, the stent requires an endoscope to properly place it inside the human system. Therefore, the plea that stent is an accessory of an endoscope is not acceptable. On the other hand, endoscope is a too! used for proper placement of stents".
3. The appellant had relied on the decision of the Apex Court in the case of Mehra Brothers v. Jt. Commercial Officer reported in 1991 (51) E.L.T. 173 (S.C.) in support of their claim that Stents are accessories. The Commissioner noted that the Apex Court had held in the aforesaid decision that the accessories would be "anything which is joined to another thing as an ornament or to render it more perfect or which accompanies it or is connected with it as an incident or as subordinate to it or which belongs to or with it adjunct or accompaniment". - A thing of subordinate importance Aiding or attributing in secondary way of assisting or attributing to as subordinate. He also noted that as per the decision in the case of Collector v. Jolly Exports, 1990 (45) E.L.T. 612, an accessory means something which contributes in a subordinate degree to attain a general degree (results) or effect. The impugned order has observed that the Stents under import are not accessories of endoscopes as they are not in any way required for the functioning of endoscope. The order also noted that the Stents are not attached to endoscope and the endoscope can function independently. It is further noted that the Stents do not enhance the efficiency or improve the functioning of endoscopes and they are not imported together as a necessary adjunct or accompaniment. The order came to the conclusion that the Stents are independent of endoscope functionwise and cannot be treated as accessories.
4. The present appeal submits that the findings of the Commissioner are erroneous. It has been pointed out that according to "Encyclopaedia and Dictionary of Medicine, Nursing, and Allied Health (Fourth Edition)" Stents would come within the scope of accessories of endoscope. This dictionary states the following under the heading endoscope :-
"endoscope (en'do-skop) an instrument used for direct visual inspection of hollow cavities. Specially designed endoscopes are used for such examinations as BRONCHOSCOPY, CYSTOSCOPY, GASTROSCOPY, and PROCTROSCOPY.
Although the design of an endoscope may vary according to its specific use, all endoscopes have similar working elements. The viewing part (scope) may be a hollow metal or fibre tube fitted with a lens system that permits viewing in a variety of directions. The endoscope also has a light source, power cord, and power source. Accessories that might be used with an endoscope for diagnostic or therapeutic purposes include suction tip, tubes and suction pumps forceps for removal of biopsy tissue or a foreign body, and electrode tip for cauterization", (emphasis supplied).
5. The appeal also has referred to World News in Digestive Endo-scopy Issue 8, April, 1998. This paper describes and states the following about the use of Endoscopic Enteral Metal Stents for Malignant Gastric Outlet Obstruction :-
"Surgical gastrojejunostomy is the standard treatment for malignant gastric outlet obstruction (GOO); Unfortunately, this intervention can be associated with significant morbidity and mortality (1). Self-expanding metallic stents designed for the biliary tract, such as the Gianturco-Rosch Z-stent (Wilson-Cook, Inc, Winston-Salem, NC) and the Wallstent (Schneider, Minneapolis, MN) have been reported to provide effective treatment alternatives with minimum morbidity (2-10) but small caliber lumens. Over the past two years, we have used commercially available Wallstent Enteral stents or their prototypes to treat 12 patients who had malignant gastric or duodenal stenoses. Several patients were treated before the stents were approved by the Food Drug Administration for marketing as a gastrointestinal device, but all were approved for compassionate use by the Brigham and Women's Research Committee. We obtained informed consent from all patients prior to treatment.
Equipment We used self-expanding metallic stents (Wallstent Enteral) 16 to 22 mm in diameter and 60, 83 or 90 mm in length, These stents are constructed from a woven stainless steel superalloy and have a larger diameter than the commonly used biliary Wallstent. Prior to deployment, these stents are constrained by a transparent plastic membrane (Unistep System) onto a delivery system of outer diameter of 10 Fr (3.3 mm) and overall length of 230 cm. This slim and long delivery system allowed us to insert and deploy the stents through the biopsy channel of therapeutic upper endoscopes or duodeno-scopes (Fujinon, Inc, Wayne, N])."
6. The appellants have also referred to the following statement in the product literature :
"houses a spacious 3.2 mm instrument channel capable of accommodating an impressive range of therapeutic instruments, indicated for a range of procedures including papillotomy, stenting...... The JF-V exhibits both outstanding therapeutic and superior diagnostic/observation capabilities".
7. The appellants have also relied on the following extract from "UPMC Physician" :-
Physician - April, 1997; Vol. 6, No. 4. Therapeutic endoscopic program for GI tract obstruction The Department of Medicine offers the latest endoscopic technologies for diagnosis and treatment of GI tract pathology. Department physicians offer palliative treatment of GI obstructions, identification and precise ablation of lesions producing bleeding, and a full range of diagnostic modalities using endoscopic ultrasound. In many cases, these methods are not available elsewhere in the tristate region.
Endoscopic stents Technological advancements in the design of expandable metal stents has led to improved endoscopic treatment of GI obstructions. Compared with rigid plastic GI stents, metal stents can be housed in smaller delivery devices, are easier to place, and have a substantially increased service life. Endoscopic stenting provides effective, minimally invasive relief and improved quality of life for end-stage cancer patients.
According to Adam Slivka, MD, PhD, assistant professor of medicine and director of the GI lab, the metal GI stents have been in use since the early 1990s for treatment of malignant biliary obstruction. Slivka and his colleagues in the Department of Medicine insert metal biliary stents endoscopically, allowing the patient to avoid traditional surgery. The procedure is performed on an outpatient basis under conscious sedation. Metal biliary stents last for six to seven months - twice the service life of plastic biliary stents - eliminating the need for at least one additional procedure and providing greater comfort for patients with malignant bile duct obstruction.
Larger metal stents for esophageal obstruction have been in use from the early to mid-1990s, says Dr. Slivka. The newest generation of esophageal stents is inserted alongside an endoscope without dilation, allowing greater comfort for the patient. Plastic-covered esophageal stents have proved particularly effective and safe for patients with tracheo-esophageal fistula resulting from locally advanced disease; the covered stent opens the obstruction and effectively closes the fistula. Endoscopic esophageal stenting is an effective option for malignant dysphagia in patients who are not candidates for surgery.
Enteral stents for use in the GI lumen are the most recently approved stents for insertion through a standard colonoscope or gastroscope. They may be used to treat malignant obstruction of the colon, gastric outlet, or duodenum.
Since federal Food and Drug Administration approval in 1996, Dr. Slivka and his colleagues have treated several patients using endoscopic enteral stenting,
8. The appellant's main contention is that the finding in the impugned order that endoscope can function without the Stents fails to take into account the fact that in the absence of the Stents and other accessories the Endoscope can perform only the function of diagnosis i.e. visual inspection of hollow organs. Treatment function of the endoscope can be performed only with the help of Stents and other items. The appeal also submits that the observation that the Stents are not attached to the endoscope and for that reason they cannot be treated as accessories is not correct inasmuch as all accessories don't remain attached all the time to the main equipment. Each accessory is attached, when necessary, for the performance of the function for which it is designed and is thereafter detached from the equipment. The appellants point out that the observation in the impugned order that Stents do not enhance the efficiency or the functioning of endoscope and are not imported together as a accessory, adjunct, or accompaniment are also either irrelevant or erroneous to determination of the issue. It is the appellant's submission that since the Stents are essential for the treatment of cancers of the intestine, it is entirely erroneous to say that Stents are not required for the functioning of endoscope. Similarly, other accessories are essential for the carrying out of surgical procedures like papillotomy, biopsy etc. The observation regarding separate import of endoscope and Stents is irrelevant for determining the issue as accessories and the equipment need not be imported together. They are imported together or separately depending merely upon requirements and other factors and combined import is not relevant to the question as to whether an item is an accessory of the equipment in question.
9. The appellants have also relied on the decision of this Tribunal in the case of Sri Ram Impex v. Commissioner of Customs, Mumbai, 2001 (127) E.L.T. 172 in support of their case.
10. It is clear that endoscope performs two functions, i.e. diagnosis and treatment. There are two separate channels in the endoscope for inserting the diagnosis camera and the treatment items. The treatment carried out includes removal of biopsy tissues, or a foreign body, cauterization etc. according to Encyclopaedia and Dictionary of Medicine, Nursing, and Allied Health relied upon by the appellants (quoted in para 3 of this order). Product literature on 3.2 mm Large Channel High Performance Duodenovidescope states that it houses a spacious 3.2 mm instrument channel capable of accommodating an impressive range of therapeutic instruments for procedures including papillotomy, stenting etc. It states that scope exhibits both outstanding therapeutic and superior diagnostic observation capabilities. The paper in world News in Digestive Endoscopy Issue 8, April, 1998 also states that the Stents are deployed during treatment with the help of duodeno-scope. It states that stents are placed through the biopsy channel of therapeutic upper endoscopes or duodenoscopes. The article in UPMC Physician April, 1997 Vol. 6, No. 4 states that Technological advancements in the design of expandable metal stents has led to improved endoscopic treatment of GI obstructions. The article states that Endoscopic stenting provides effective, minimally invasive relief and improved quality of life for end-stage cancer patients. The article states that they may be used to treat malignant obstruction of the colon, gastric outlet, or duodenum. In view of these materials, the finding in the impugned order that "Stents are not in any way required for the functioning of endoscope" is clearly erroneous. That finding is correct when endoscope is considered merely as an instrument for diagnosis. When its use as an equipment for treatment is taken into account it is clear that Stent and other items are essential for endoscopes. That the Stent is not always attached to the endoscope or it has been imported separately and not with endoscope are not relevant for determining whether the stents are accessories of endoscope. Combined or separate imports are not relevant for determining whether an item is an accessory of an equipment. That is merely a matter of convenience or the requirement of a particular importer. It remains established by the evidence on record that Stents are essential and have been developed for use in endoscopic treatment. They make endoscopic treatment efficient and effective and are therefore to be treated as accessories to endoscope. The decision of this Tribunal in the case of Sri Ram Impex v. Commissioner of Customs, Mumbai supports the appellant's case. That decision related to whether Catheters are accessories of haemodyliser. The lower authorities had taken a view that Catheters were consumables and therefore not in the nature of accessories of haemodyliser. The Tribunal overruled that decision with the following observation :-
"3. The other reason furnished for not considering catheters as accessories is that they do not contribute to the efficiency or effectiveness of a piece of equipment without changing its basic function. The Supreme Court in its judgment in Mehra Bros. v. joint Commercial Officer - 1991 (51) E.L.T. 173 had laid down the test to determine whether the article is an accessory or not. It said, "The correct test to determine whether an article is an accessory or not is whether the article or articles in question would be adjunct or accompaniment or an addition for the convenient use of another part of the main article or adds to the beauty, elegance or comfort for the use of an article, or is supplementary or secondary to the main or primary importance." It cannot be disputed that the catheter is an unavoidable adjunct or accompaniment to the haemodyliser. Unless the blood is carried to the haemodyliser for filtration and returned to the patient, in both cases through the catheter, the haemo-dylisers cannot function. There will be nothing for it to dialyse. To that extent, therefore, the catheter should be considered an adjunct or accompaniment for the convenient use of the haemodyliser. The fact that the Director General Health Services in its opinion dated 24-2-1994 to M/s Intra Medica Exim (P) Ltd., New Delhi has informed it after consulting an expert in nephrology, that catheters of the kind specified in the letter are accessories of haemodyliser lends weight to this conclusion. The goods were therefore entitled to the benefit of the notification".
11. In view of the above, we accept the appellant's contention that the Stents in question are eligible for exemption, as accessories, under Notification No. 17/2001 and the impugned order which has held to the contrary is erroneous. The appeal is accordingly, allowed with consequential relief to the appellants after setting aside the impugned order.