Madras High Court
The Commissioner Of Customs vs M/S.Transasia Bio-Medicals Limited on 17 July, 2014
Author: R.Sudhakar
Bench: R.Sudhakar, G.M.Akbar Ali
In the High Court of Judicature at Madras
Dated: 17.07.2014
Coram
The Honourable Mr.JUSTICE R.SUDHAKAR
and
The Honourable Mr.G.M.AKBAR ALI
Civil Miscellaneous Appeal No.2159 of 2006
& M.P.No.1 of 2006
The Commissioner of Customs,
Air Cargo Complex,
Meenambakkam,
Chennai - 600 027.
..... Appellant
Vs.
1. M/s.Transasia Bio-medicals Limited,
71, Nungambakkam High Road,
Chennai - 600 034.
rep. by its Vice President
2. The Custom, Excise and Service Tax
Appellate Tribunal,
South Zonal Bench, 1st Floor,
Shastri Bhavan Annexe,
Haddows Road,
Chennai - 600 006.
.... Respondents
APPEAL filed under Section 130 of the Customs Act, 1962 against the order dated 15.9.2005 made in Final Order No.1274/05 on the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai.
For Appellant : Mr.P.Mahadevan
For Respondents: No appearance - R1
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J U D G M E N T
(Judgment of the Court was delivered by R.SUDHAKAR,J.) This Civil Miscellaneous Appeal has been filed by the Revenue under Section 130 of the Customs Act, 1962 against the order dated 15.9.2005 made in Final Order No.1274/05 on the file of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai. This Court, by order dated 27.7.2006, admitted this Civil Miscellaneous Appeal on the following substantial questions of law:
"a. Whether the Customs, Excise and Service Tax Appellate Tribunal is correct in holding the impugned goods, i.e, Micropipettes, as an accessory of the Auto Analyser, when the impugned goods has been imported independently, invoiced independently and also charged separately as per that invoice violating the provisions of the Accessories (Condition) Rules, 1963?
b. Whether the Customs, Excise and Service Tax Appellate Tribunal is correct in holding the impugned goods, i.e. Micro pipettes, as an accessory of the Auto Analyser when even the manufacturer's catalogue of the impugned goods also does not mention the impugned goods as an accessory of the Auto Analyser and instead of the same, it was mentioned as a 'General Puprose pipettor for the accurate and precise sampling and dispensing of the liquid volumes'?"
2. The first respondent/importer in this case had imported 500 numbers of Erabpette (Micorpipettes) valued at Rs.8,65,680/-. The importer filed bill of entry and sought clearance of the imported items duty free under the benefit of customs Notification No.23 of 1998 Serial No.244(B) as accessories of Auto Analyser.
3. The plea of the importer before the Assistant Commissioner (GR 5B), Air Cargo Complex was that the accessories of all the medical equipment figuring in list 22 could get full exemption of basic and additional duty of customs under Sl.No.224(B) in the table annexed to Notification No.23 of 1998. The importer had also submitted that the pipettor under assessment was an accessory for the medical equipment, namely, Auto Analyser and the pippetor under import, though described as a general purpose equipment, was to be treated as accessory and was eligible for exemption.
4. The importer, in support of their contention, placed reliance on the decision of the Supreme Court in the case of M/s.Hindustan Ferodo V. Collector of Central Excise, Bombay reported in 1997 (89) ELT 16 (SC) as well as the decision in the case of Annapurna Carbon Industries V. State of Andra Pradesh reported in AIR 1976 SC 1418).
5. The Assistant Commissioner rejected the submissions of the importer and took a view that the goods in question was a general purpose pipettor used for the accurate and precise sampling and dispensing of liquid volumes; it can be used for a variety of research purposes, its clinical use being of those and consequently held that it was an independent apparatus, classifiable under Chapter Heading 9026.80. Therefore the importer was not entitled to the benefit of exemption from duty under Serial No.244(B) of Customs Notification No.23 of 1998. Hence, the importer was assessed under merits under Customs Heading 9026.80.
6. Aggrieved by the same, the importer preferred an appeal before the Commissioner of Customs (Appeals), who, while allowing the appeal, held as follows:
"I have carefully gone through the records of the case and submissions made by the appellant. I find that even though auto pipette has independent function it is applied as an accessory to alongwith auto analyser as proved by the Purchase Order, Invoice and the manual. Similar equipment when imported also contain a pipette.
As argued by the Consultant, mere independent function of the pipette does not prevent it from being an accessory. All that it is to do is that it is to enhance the main function of the equipment. In this case, as mentioned by the Professor of Bio-Chemistry, accurate testing is a must for clinical chemistry analyser. In the circumstances, auto pipette should be considered as an accessory to auto analyser.
Further the Notification has a wider connotation. It mentions accessories for medical euipments as long as an accessory is used for any medical equipment, the benefit of Notification No.23/98 applies. Even in the case of diverse use other than medical equipment, the fact that it is used for medical equipment should entitle pipette to be considered as an accessory for medical equipment. The Consultant pointed out that how pipette even though as an independent equipment forms part of the Elisa Kit. They have also produced a certificate from DGHS accepting the pipette as part of Elisa Kit. In a similar manner, the pipette under consideration should also be considered as an assessory for medical equipment, the benefit of Notification No.23/98 has to be given.
The Assistant Commissioner's order is set aside and the appeal is allowed."
7. As against the order of Commissioner (Appeals), the Revenue preferred an appeal before the Tribunal. While taking note of the order of the Commissioner (Appeals), the Tribunal concurred with the view of the Commissioner (Appeals), where there is a specific finding that the purchase order and invoice showed that the auto Pippete, though have an independent function, was supplied as an accessory for Auto Analyser. The Tribunal also noted the findings of the Commissioner (Appeals), who held that similar equipment that was imported contained pipette, thereby making it clear that pipettes were accessories to a medical equipment. The Tribunal also came to the conclusion that the imported goods satisfies the requirements under the Accessories (Condition) Rules 1963. The Tribunal further held that when the imported item was usable with a medical equipment covered under the Notification, it was eligible for the benefit of exemption. Accordingly, the Tribunal dismissed the appeal filed by the Revenue.
8. Aggrieved by the same, the Revenue has filed the present appeal reiterating the findings of the Original Authority that the imported goods deserve to be assessed on merit and the importer is not entitled to the benefit of exemption Notification.
9. Heard learned Standing Counsel appearing for the Revenue. Even though notice has been served on the first respondent, none appears for the first respondent. Hence, after perusing the order of the Authorities below and after perusing the materials placed before this Court, we are inclined to dispose of this appeal on merits.
10. On merits, we find that the Commissioner (Appeals) as well as the Tribunal are correct in coming to the conclusion that the goods in import, namely, Micropipettes, are accessories of medical equipments.
11. The view of the Supreme Court in the case of Annapurna Carbon Industries V. State of Andra Pradesh reported in AIR 1976 SC 1418) on the definition of word 'accessory' applies aptly to the facts of the present case. The Supreme Court, while considering the issue, held as follows:
"7.....Apparently, the deciding factor is the predominant or ordinary purpose or use. It is not enough to show that the article can be put to other uses also. It is its general or predominant user which seems to determine the category in which an article will fall.
......
10.... "Accessories" are not necessarily confined to particular machines for which they may serve as aids. The same item may be an accessary of more than one kind of instrument."
12. Unfortunately, the Original Authority has not thought it fit to discuss the above-said ruling of the Supreme Court. In any event, it is not the case of the Department that the goods imported though may be used as a general purpose Pippet, is not an accessory of a medical equipment. Once it qualifies to be an accessory of a medical equipment figuring in List 22, automatically the benefit of exemption will flow therefrom. If the finding of fact by the Commissioner (Appeals) and by the Tribunal is accepted, then the importer will have the benefit of exemption.
13. The stand of the Department that the goods have imported independently and invoiced independently and therefore, it should not be treated as an accessory of Auto Analyser, does not merit consideration at this point of time, as we find that the Commissioner (Appeals) had taken note of the fact that the purchase order reflects the pippet as accessory of Auto Analyser.
14. In the light of the decision of the Supreme Court referred supra and also on the basis of the Customs Notification No.23 of 1998, which clearly gives exemption for accessories of medical equipments listed therein, we answer the first substantial question of law against the Revenue.
15. As far as the second substantial question of law is concerned, the Department relies upon the manufacturer's catalogue to show that the goods imported is a general purpose pippet. In this regard, the first respondent/importer relied upon the decision of the CEGAT Special Bench, New Delhi in the case of Collector of Central Excise Madras V. Allied Computers reported in 1997 (31) ELT 421 (Tribunal) to show that the claim of statements made in the catalogue or brochures is not conclusive for the purpose of assessment, if the actual position is shown to be otherwise. This decision is binding on the Department. Even otherwise, in view of the finding which we have rendered in so far as the first substantial question of law placing reliance on the decision of the Supreme Court in the case of Annapurna Carbon Industries V. State of Andra Pradesh reported in AIR 1976 SC 1418), we find no justification to discredit the claim of the first respondent/importer that the goods imported is nothing but an accessory of a medical equipment. Accordingly, the second substantial question of law is also answered against the Revenue.
16. For the foregoing reasons, we pass the following order:
(i)On the questions of law raised, we are of the view that the Tribunal was justified in granting the benefit of Customs Notification No.23 of 1998 to the importer.
(ii)Consequently, the order of the Tribunal dated 15.9.2005 stands confirmed.
In the result, this Civil Miscellaneous Appeal stands dismissed. Consequently, M.P.No.1 of 2006 is also dismissed. No costs.
Index :Yes (R.S.,J) (G.M.A.,J) Internet:Yes 17.07.2014 sl To The Custom, Excise and Service Tax Appellate Tribunal, South Zonal Bench, 1st Floor, No.26, Haddows Road, Chennai - 600 006. R.SUDHAKAR,J. AND G.M.AKBAR ALI,J. sl C.M.A.No.2159 of 2006 & M.P.No.1 of 2006 17.07.2014