Custom, Excise & Service Tax Tribunal
Dr Rai Memorial Cancer Institute vs Cc Sea Ch - Viii on 3 February, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT NO. III
CUSTOMS APPEAL No.40219 of 2019
(Arising out of Order-in-Original No.65622/2018 dated 11.10.2018 by Commissioner of
Customs-VIII (General), Chennai]
Dr.Rai Memorial Cancer Institute Appellant
Old No.562, New No.526, Anna Salai
Teynampet
Chennai 600 018
VERSUS
Commissioner of Customs (Chennai-VIII) Respondent
Custom House, No.60, Rajaji Salai Chennai 600 001 WITH CUSTOMS APPEAL No.40191 of 2019 (Arising out of Order-in-Original No.65622/2018 dated 11.10.2018 by Commissioner of Customs-VIII (General), Chennai] Commissioner of Customs (Chennai-VIII) Appellant Custom House, No.60, Rajaji Salai Chennai 600 001 VERSUS Dr.Rai Memorial Cancer Institute Respondent Old No.562, New No.526, Anna Salai Teynampet Chennai 600 018 APPEARANCE :
Shri S. Murugappan, Advocate For the Appellant (Importer) Ms. Sridevi Taritla ADC (A.R) For the Revenue 2 CORAM : HON'BLE MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER(TECHNICAL) DATE OF HEARING : 01.02.2022 DATE OF PRONOUNCEMENT: 03.02.2022 FINAL ORDER No. 40036-40037 / 2022 Order PER: P. ANJANI KUMAR The appellant-importer i.e., Dr. Rai Memorial Cancer Institute have imported medical equipment declaring as one set of "True Beam" Linear Accelerator with all accessories and other accessories vide Bill of Entry No.4771227 and 4771244 both dated 31.03.2016 claiming classification under CTH 90229030 and availing concessional rate of duty in terms of Notification No.12/2012 (Sl.No.473) and No.21/2012 (Sl.No.95). On completion of the investigation by SIIB a show cause notice dated 30.11.2017 was issued to the appellant-importer seeking to reject the assessment claimed by them and reclassifying it as 'True Beam Accelerator and other equipment' separately as follows:
Item Description Revised
Customs
Tariff Heading
Linear Accelerator True Beam (High Energy Linear Accelerator "True 9022 14 90
Beam" With all Medical accessories
ARIA Oncology Information System (For Linear Accelerator CLINAC IX 8471 30 90
Medical Equipment)
Eclipse Treatment Planning System (For Linear Accelerator CLINAC IX 8471 30 90 Medical Equipment) KV Imager (For Linear Accelerator CLINAC IX Medical Equipment) 9022 12 00 MV Imager (For Linear Accelerator CLINAC IX Medical Equipment) 9022 12 00 Machine Cables for Linear Accelerator CLINAC IX Medical Equipment 8544 60 90 RPM & MLC (For Linear Accelerator CLINAC IX Medical Equipment) 9022 90 90 3
2. The show cause notice also seeks to demand differential duty of Rs.1,04,68,684/- along with interest; confiscation of impugned goods under Section 111 (m) of the Customs Act, 1962 and imposition of penalty under Section 114A of the Customs Act, 1962. The said SCN has been adjudicated vide OIO No.65622/2018 dated 11.10.2018 confirming the proposals made in the SCN. The appellant-importers are in appeal No. C/40219/2019. The Revenue is also in Appeal No. C/40191/2019 against the aforesaid order on the ground that the adjudicating authority did not impose redemption fine.
3. Shri S. Murugappan, Learned Counsel, appearing for the appellant- importer Dr. Rai Memorial Cancer Institute, emphasizes on the issue of limitation to begin with and touches merits of the issue later. He submits that the imported goods are complete radio therapy equipment for cancer treatment; the literature documents submitted establish that what is imported are not individual pieces of equipment and cables but a complete system for cancer therapy. The respondent erred in referring to Section Note (3) of Section XVI of the First Schedule to the Customs Tariff Act whereas Section 4 is more relevant and reads as under:
"4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of other headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function." He submits that vide Chapter Note 3 to Chapter 90 the above provision is made applicable to goods falling under Chapter 90 also. 4
4. Learned Counsel further submits that it was wrong on the part of the department to classify the equipment under 90221490; there is difference in the scope of headings between HSN and the Indian Customs Tariff Schedule; while HSN heading 9022.90 refers to 'other goods' including parts and accessories of heading 9022; in the Indian Customs tariff there is specific insertion of one tariff entry under heading '90229030' as "Radiation beam delivery units"; He submits that even when for ease of transportation, goods have been shipped and invoiced separately, going by the ratio of the following decisions both of them can be clubbed and classified together :
i. Milk Food Ltd. Vs. Collector of Customs, New Delhi [1994 (71) E.L.T.549 (T)].
ii. MTR Food Product Vs. Commissioner of Central Excise, Bangalore [2000 (118) E.L.T. 392 (Tribunal)].
iii. CCE, Coimbatore Vs. Sean Machineries (P) Ltd.
[2009 (234) E.L.T.282 (Tri. -Chennai)] iv. Sharp Business Machines Pvt Ltd. Vs. Collector of Customs [1990 (49) E.L.T. 640 (S.C.)] v. CC, New Delhi Vs. Phoenix International Ltd.
[2007 (216) E.L.T. 503 (S.C.)]
5. Learned Counsel traces the genesis of the exemption notification and submits that over the years from 1988 itself, the Linear Accelerator X-ray for Cancer therapy have been exempted. Therefore, the intention of legislature is very clear to give exemption to impugned goods.
6. Learned Counsel further submits that Bill of Entry was filed in March 2016 and duty was paid in May 2016 whereas, the show cause notice was issued in November 2017 by invoking the suppression of facts and alleging that the goods were cleared on self-assessment and same is factually wrong. The appellant-importer submitted representations dated 5 29.03.2016, 04.04.2016 and 09.05.2016 that the goods are examined in detail before the classification was finally approved; this being the case, the assessment cannot be called asself-assessment. The department has initially cleared the goods and later taken a different view and therefore no suppression can be invoked as there is no misdeclaration on the part of the appellant-importer. He relies upon the decisions in the case of Northern Plastic Ltd. Vs. CCCE 1998 (101) ELT 549 (S.C.) and Komal Trading Company Vs. CC (Import), Mumbai - 2014 (301) ELT 506 (Tri.- Mumbai); the department was very much aware of the facts of the case as they were free to issue show cause notice within the period of one year; having failed to do so no suppression can be alleged.
7. On the department's appeal (C/40191/2019), Learned Counsel submits that in view of the above, when the show cause notice itself is not maintainable on limitation as well as merits, confiscation of the goods and imposition of redemption fine will also not sustain.
8. Learned Authorised Representative, Ms Sridevi Taritla. for the department reiterates the findings of the OIO as far as Appeal No. C/40219/2019 is concerned and the grounds of appeal in respect of Revenue Appeal No. C/40191/2019. She submits that the correct classification of Linear Accelerator True Beam would be under 90221490 going by Section, Chapter Notes and the entries of the goods themselves under a heading or sub-heading. She submits that heading 9022 covers "Apparatus based on the use of X-Rays or of Alpha, Beta or Gamma Radiations, whether or not for Medical, Surgical, Dental or Veterinary uses, including Radiography or Radiotherapy Apparatus, 6 X-Ray Tubes and other X-Ray Generators, High Tension Generators, Control Panels and Desks, Screens, Examination or Treatment Tables, Chairs and the Like.
9. Heard both sides and perused the records of the case. Brief issue that requires consideration by the Bench is as to whether the apparatus imported by Dr. Rai Memorial Cancer Institute (appellant-importer), vide Bill of Entry No. 4771227 and 4771244 both dated 31.03.2016, would be classifiable under CTH 90229030 along with apparatus as claimed by the importer or the main instrument to be classified under 90221490 as 'other equipment' under different heading as proposed by the SCN and confirmed by the Learned Adjudicating Authority. We also find that the appellant-importers have argued on the issue of limitation.
10. We find that the show cause notice alleges that the assessments initially were made by the appellant-importer by wrongly claiming the exemption notification and mis declaring the classification of the goods and therefore extended period is rightly invokable. However, it is a fact that they have filed Bill of Entry on line. However, ongoing through the records of the case, it is evident that the departmental officers have examined and assessed the goods and only after their satisfaction the goods were released and payment was allowed availing the exemption. Therefore, it cannot be said that the assessment initially was done by the importer himself. On going through Bill of Entry No.4771227 dt. 31.03.2016, we find that there is endorsement to the effect by the Inspector Shri Joseph Xavier Roberts to the effect as under: 7
"OPENED AND EXAMINED ALL THE PKGS., CONTENTS-VARIAN-MEDICAL LINEAR ACCELARATOR-1764;
VFD DESCRIPTION WRT IMPORT DOCS., MAKE IS VARIAN; YOM IS 2014-08; ALONG WITH SPARES AS PER THE PACKING LIST, PROCHURES & CLEAR PHOTOGRAPHS, FORWARDED TO GR. PL., F.C. BE."
11. We also find that in respect of Bill of Entry No.4771244 dt. 31.03.2016 also there is an examination report given by the Inspector Shri M. Raja to the effect as under:
"OPENED & EXAMINED ALL THE PKGS FROM THE CONTAINER.
CONTENTS: PRS MOTION SYSTEM, KV MOTION SYSTEM, INTEGRATED IGFT COUCH, PANASONIC CAMERA SZ - 10, DELL SWITCH, KEYBOARD ETC AS PER DECLARATION MADE IN THE IMPORT DOCUMENTS.
VFD THE MARKED DESCN WRT DECLARATIONS MADE IN IMPORT DOCUMENTS. VFD CATALOGUE PRODUCED BY THE IMPORTER THE SAME IS PLAED IN THE DOCKET. MAKE - TRUE BEAM AND YOM -2016, AVILABLE ONLY ON THE LABEL. MODEL NO AND SL. NO. ARE NOT AVAILABLE. ALSO NO BROCHURES AND BOOK MATERIALS AVAILABLE. PHOTOGRAPHS OF THE ALL THE ITEMS ARE FORWARDED TO GROUP FOR PERUSAL."
12. Ongoing through the above factual position in the case, we find that the argument of the department that this is a case of self-assessment is factually incorrect. We find that though the appellant-importer has filed the Bill of Entry in the EDI system goods were subjected to open examination and the proper officer has examined the goods and forwarded it to the concerned group for assessment. Under such circumstances, it cannot be said that the Bills of Entry were subjected to self-assessment. This being the case, it is not open for the department to issue show cause notice invoking longer period and that too alleging suppression, misdeclaration etc. with intent to evade payment of duty.
13. We find that Ld. Counsel for the importer (appellant) rightly submits that claiming of exemption notification does not tantamount to 8 suppression with intent to evade payment of duty. In view of the above, we find that appeal of importer (filed by Dr. Rai Memorial Cancer Institute) succeeds on the issue of limitation and therefore we are of the considered opinion that we need not go into the merits of the case. The impugned order does not survive in the scrutiny of law. When the impugned Order-in-Original itself is liable to be set aside, the appeal by the department for imposing redemption fine has no chance of survival.
14. In the result the importer's Appeal No.C/40219/2019 is allowed and the Revenue Appeal C/40191/2019 is dismissed.
(Pronounced in court on 03.02.2022) (SULEKHA BEEVI C.S.) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) gs