2015 (8) TMI 490 - SC - Customs

Import of Ultrasound Systems, probes, and their parts and components. Exemption on specific types Commissioner apprehended that exemption under Notification of 2000 was restricted only to specific type of ultrasound system, namely, A scan and if it had additional feature, such as B scan and M scan, those were excluded by implication Tribunal vide impugned order decided that systems having additional features would not be denied exemption Held that - if equipments can be used in multiple applications in addition to their use as Ophthalmic applications, benefit of exemption was not to be denied History of notification shows that when ultrasound equipment contained feature or mode of B scan, it was specifically so stated and exempted Specific equipments mentioned alone were to be granted exemption If equipment was one specified under exemption notification, it may be used for multiple purposes, this was not same as stating that notification itself should be read so as to extend what was specified equipment therein Thus, Tribunal judgments set aside and order of Commissioner upheld matter remanded back to tribunal to decide two other aspects - Decided in favour of Revenue.

Summary

Issues involved:
Whether imported ultrasound systems are covered by exemption Notification No.16/2000 - Cus dated 1.3.2000.

Analysis:
The Supreme Court considered two appeals involving imported medical probes and ultrasound systems, probes, and their parts. The main question was whether the exemption under the 2000 Notification applied to ultrasound systems with features beyond A scan. The Commissioner initially restricted the exemption to A scan only, excluding additional features like B scan and M scan. However, the CESTAT reversed this decision, allowing systems with extra features to qualify for exemption.

To understand the exemption scope, the Court delved into the history of relevant Notifications under Customs Tariff Chapter 90. Earlier Notifications covered sight-saving equipment and ultrasonic equipment like A scan, B scan, pacchy meters, and cleaners. Subsequent Notifications expanded the exemption to include various ultrasonic equipment but omitted B scan and cleaners in later Notifications.

The Court examined the 2000 Notification, which continued the trend of restricting ultrasonic equipment to A scan and pacchy meters only. The Revenue argued for strict interpretation based on specific equipment mentions in the Notification, while the assessees contended that as long as the equipment contained A scan, additional features were irrelevant for exemption.

The Court agreed with the Revenue, emphasizing strict construction of exemption notifications and the significance of dropped features in subsequent Notifications. It rejected the assessees' argument about multiple applications and specified equipment, affirming that only specified equipment within the Notification could be considered for exemption.

Additionally, the Court noted pending issues regarding the extended period of limitation and exemption under another Notification. While setting aside the Tribunal judgments and reinstating the Commissioner's decisions, the Court remanded the matters to the Tribunal for further consideration. The Tribunal was urged to expedite the proceedings due to the appeals' age.

In conclusion, the Court disposed of the appeals, reinstating the Commissioner's decisions and directing the Tribunal to address the remaining points raised by the assessees promptly.