Customs, Excise and Gold Tribunal - Bangalore
Wipro Ge Medical Systems Ltd., ... vs Commissioner Of Central Excise And ... on 23 November, 2001
Equivalent citations: 2002(79)ECC254, 2002(145)ELT197(TRI-BANG)
JUDGMENT
Sh. S.S. Sekhon
1. The appellants imported 'Cardiovascular Aniography Systems with Digital Subtraction Angiography' (also referred to as Cath - Lab) classifiable under Chapter Heading 9022.14, on or around 25.3.98, through the Aircargo Complex, Bangalore which was cleared as 'Nil' rate of duty under Notification No. 11/97-cus dated 1.3.97, vide Sl.No. 210, List No. 22, Sl.No. 64 and supplied to M/s. Manipal Heart Foundation, Manipal Hospital, Bangalore. Subsequently, on or around 15.4.98, they imported the impugned goods viz., GEMNET DCR 2000, at the Air Cargo Complex, Bangalore. It is stated that it could not be imported with the main equipment due to volume and logistic difficulties. They filed Bill of Entry No. 25256 dated 15.4.98, and claimed that 'GEMNET DCR 2000' is an "accessory" to the main equipment viz., "Cardiovascular Angiography Systems with Digital Substraction Angiography' falling under Heading No. 90.33 of the Customs Tariff Act, 1975 read with Notification No. 11/97-cus dated 1.3.97 (List No. 210, List No. 22, Sl.No. 64).
2. The department held that the impugned goods are correctly classifiable under Heading 84.71 of the CTA, 1975 and not eligible for the exemption under Notification No. 11/97-cus dated 1.3.97 (List No. 210, List No. 22, Sl.No. 64). The Commissioner rejected the appeal on the grounds that:
"From the above findings, it is clear that the angiography equipment/system has its own digital storage system for normal functioning. Therefore, the appellant's contention that without GEMNET DCR 2000, the medical equipment angiography cannot function effectively is not found to be correct or acceptable. This contention is not supported by the 'catalogue products literature leaflet and letter from the medical institution and experts submitted by the appellant. This makes it further evident that GEMNET DCR 2000 in no circumstances or stretch of imagination can be called as an accessory to the medical equipment i.e. angiography system. Contrarily, the GEMNET DCR 2000 is no doubt an automatic data processing unit rightly classifiable under CTH 8471.
Further, it is evident from the catalogue that GEMNET DCR 2000 nowhere has been stated that this is an accessory to the main medical equipment i.e., angiography system. Contrarily from the careful reading for the said booklet/leaflet, it is very clear that GEMNET DCR 2000 is undoubtedly an independent automatic data processing unit with all characteristics of automatic data processing unit, and not an accessory to the medical equipment i.e., angiography system. The appellants have not put forth even an iota of evidence wherein in the catalogue or leaflet it has been shown that it is an accessory to the said equipment. Further, even the photo copy of the certificate submitted from M/s. Ramaiah Institute of Cardiology dt. 23.5.98 does not state with any factual evidence that GEMNET DCR 2000 is an accessory to the medical equipment i.e., angiography system. A reading of para 2 of the certificate also clearly reveals that this is an independent D.P. equipment to review and analyse the images required immediately after the procedure and to access the treatment afterwards. The observation in the last para is just a passing observation and not a certificate with any evidence. Accordingly, I find that the order of the Asst. Commissioner classifying the subject product GEMNET DCR 2000 under CTH 8471 is correct, proper and legal and does not require any interference."
3. We have considered the submissions and the case law cited and after considering the same find:
a) While the appellants are considering the entity under import to be an 'accessory' entitled to duty free clearance, the department is coming to an conclusion that they are nothing but an import of an automatic data processing machines and storage units. From the order in original of the Asst. Commission, it is apparent that after examining the definition of the accessory under EXIM policy which means that accessory or attachment is a part, sub-assembly or assembly that contributes to the efficiency or effectiveness of a piece of equipment without changing it's basic function, he has come an conclusion that accessory can not be a full equipment and can not have a function of its own and is dependent on its connection to the main equipment without which it can not function. Examining the imports under this assumption, he has come to the following conclusions.
1. The imported GEMnet DCR-200 System works independently of the Cath-Lab angiography system, and is used purely to store and retrieve medical records that emanate in the cath-lab. It does not in any way directly enhance the efficiency or effectiveness for the equipment it is claimed as an accessory of.
2. It consists of hardware, i.e. Automatic data Processing Units and Storage Units that are 'off-the-shelf' and capable of independent functions of their own. Using appropriate software it can be adapted for various including medical uses. They cannot in any way be termed accessories of any other equipment.
The importers have said that the Angiography system (Cath-Lab) cannot function without the GEMnet. They claim that it is essential for the storage of digital images and for the elimination of cine film. The discussion would therefore not be complete without an examination of the main equipment i.e. the Angiography system. I have gone in detail into the Product Data of the Angiography system produced by the importer. The equipment has been described as the S5800Y Advantx LC + Cardia System. Contrary to the importers contention, it is elucidated on page 5 of the Product Data that the system has a built in video camera lens that can be connected to a VCR for storage of video images. This itself eliminates the need for cine-film. It is not given anywhere in the catalogue that the GEMnet is required for data storage. Further, the equipment has it s own Digital Imaging System called DLX-C which meets its storage requirements. Description form page 7 is reproduced below:
"DLX-C Digital System with dynamic acquisition is specifically designed for coronary angioplasty application where speed of sequence acquisition and review, and ease of use are essential. Fully integrated into Advantx system architecture, the DLX-C meets or exceeds all the clinical requirements for diagnostic and interventional procedures. The basic DLX-C system provides for a multiple patient operation with storage of up to 16,000 images and optional DICOM networking port for off-line digital archiving and processing. The DLX-C can be configured with multiple image disks (optional) to store up to 64,000 images".
"The above discussion conclusively proves that the Angiography system has it's own digital storage system for normal functioning. The importers contention that the GEMnet is essential for storing images is totally baseless, and it cannot by any stretch of imagination be considered an accessory of the Angiography system".
Thereafter examining Chapter Note 5(E) to Chapter 84, he has concluded that Chapter Note along with Chapter Note 75(A) to Chapter 84 undoubtedly classified the item under CTH and Note 5(E) would not be applicable. Since the imported goods go not perform any specific function other than data processing. The appellants on the other hand has strongly urged that the catalogue as well as the other literature produced clearly shows that
(i) The GEMNET DCR 2000 is not an "off the shelf" item and it has been specifically manufactured for use an accessory for the GE Cardiovascular Angiography Systems with Digital Subtraction Angiography".
(ii) GEMNET DCR 2000 cannot be sued for any other application other than Cardiac Imaging, Storing and Viewing Cardiac Images.
(iii) GEMNET DCR 2000 cannot be operated on its own without the inputs from a Cath Lab. The hardware of GEMNET DCR 2000 is not equivalent to a general purpose Computers System, since the same has been designed and programmed specifically for recording / retrieving / viewing the cardiac images on/from medicably graded compact disks.
(iv) GEMNET DCR 2000 cannot be upgraded or used for any other purpose.
Certificate issued by GE Medical Systems, has been produced. This certificate is being doubted by Revenue as it is stated that it does not mention a date and the submissions made in para-17 of the grounds of the appeal, referring to this certificate smoothly moves from such a reference to this certificate to say what the 'leaflet' says. It is the contention of the Revenue, before us, that it is not clear whether the 'leaflet' and the 'certificate' are one and the same and there is no page number mentioned in para-17 of the grounds of the appeal. Therefore there is a serious doubt as to what is being referred. Even though in the course of the argument, the Ld. Counsel for the appellant had made a reference to a certificate as is to be bounded in para-20 of the paper book, to the effect that GEMNET DCR cannot function on its own as an automatic data processing machine.
b) From exhibit at para-69 to the paper book, we find, a fax dated 15.5.98 from GE Medical Systems, Europe signed by one Bradley Fox, Global Cardiac Product Manager, addressed to the Commissioner of Customs, Bangalore, certifying as "we hereby certify that the recently supplied GEMNET DCR 2000 system cannot function on its own as an automatic data processing machine - the reason being that the system is so designed that the data (medical images) have to be inputed from a Cardia and Vascular Angiography system with DSA through a DICOM link". In view of this particular certificate from the supplier of the goods, it is imperative that the goods should be examined by an expert as no such examination has been got conducted. This should be done to find out whether the imported entity can function independently, as an automatic data processing machine or not. Only thereafter one can come to a positive conclusion whether the goods under import could be considered to be an accessory or essential adjunct to the Cardiac Imaging Machine imported earlier. Once such a determination is made, then only the eligibility under notification could be determined. In view of insufficient technical expertise placed before us, it is not possible to determine whether the goods are an automatic data processing machine or an accessory or an essential specialized adjunct to the medical equipment imported earlier. Therefore the matter needs to be remanded back to the original authority with a direction that the technical opinion of the experts should be obtained in view of the supplier's certificate. The original authority's rejection of the declaration in the invoice because it is from a related person can not be a ground to reject the certificate being issued by a supplier of the goods, such a rejection of the supplier's certificate has to be based on expert evaluation, in the absence, the matter needs to be remanded to get the same done.
4. In view of our findings, we would set aside the order and remand the matter back for evaluation by experts, the entity under import and thereafter determination its nature and eligibility. We make it clear that we leave all issues open to the appellants and the department to get such material to support their contentions. Needless to add that appellants will have to be placed on proper notice and the matter decided after supplying them the copies of the experts opinion which are obtained by revenue. The appeal is allowed as remand.
(Pronounced in the open Court on 23/11/2001)