2016 (2) TMI 356 - AT - Customs

Import of medical equipment - exemption benefit of Customs Notification No.21/2002 under List 37 of S.No.363A of the Table vide Item No.82 and CE Notification No.6/2002 at Sl.No.267A. - M2A Capsule Endoscopy Given Diagnostic System (Wireless Endoscopy) - Held that - Item No.82 of List 37 at Sl.No.363 of the Table appended to Notification No.21/2002-Customs covers both Fibreoptic Flexible Oesophago Gastroscope and also Video Oesophago Gastroscope . The equipment which is imported by the respondent is fully automatic (wireless) used for gastro endoscopy from mouth to intestine. As per the technical definition Gastro Intestinal Video Endoscope , it is nothing but Gastroscope using Video technology. The present equipment is based on wireless capsule and which covers not only throat but also entire gastro intestinal tract. - Benefit of exemption allowed.

Summary

Issues:
1. Interpretation of Customs Notification No.21/2002 regarding the classification of imported medical equipment.
2. Admissibility of Wireless Gastro Endoscopy under the notification.
3. Comparison between Video Capsule Endoscopy and conventional fibre optic endoscopy.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT CHENNAI involved a dispute regarding the classification of imported medical equipment under Customs Notification No.21/2002. The respondents imported equipment declared as "M2A Capsule Endoscopy Given Diagnostic System (Wireless Endoscopy)" seeking exemption benefits under the said notification.

2. The adjudicating authority initially denied the benefit of the notification, stating that the imported equipment did not fall under the specified item. However, the Commissioner (Appeals) allowed the benefit of the exemption notification in the impugned order, leading the Revenue to file the present appeal challenging this decision.

3. The key contention revolved around whether the Wireless Gastro Endoscopy equipment, functioning based on a wireless capsule with a video camera, could be classified under the description "Video Oesophago Gastroscope" as per the notification. The Revenue argued that the notification only allowed for fibre optic technology, citing relevant legal precedents to support their position.

4. On the other hand, the respondents, supported by their consultant, presented literature, catalogues, and extracts from relevant journals to demonstrate that the equipment in question, although wireless, fell within the scope of "Video Oesophago Gastroscope" as per the changed notification. They highlighted the historical context of similar items listed under previous notifications to support their interpretation.

5. After considering the arguments from both sides and examining the product catalogue and literature provided, the Tribunal found that the equipment imported by the respondents, a Wireless Gastro Endoscopy system, was indeed covered under the description "Video Oesophago Gastroscope" in the notification. The Tribunal emphasized that the absence of the term "wireless" in the notification did not preclude the inclusion of wireless technology under the specified item.

6. Ultimately, the Tribunal upheld the Commissioner (Appeals) decision, ruling that the equipment in question was rightly classified under the notification, and rejected the Revenue's appeal. The Tribunal's analysis focused on the technical aspects of the equipment and its functionality in comparison to traditional fibre optic endoscopy, concluding that the wireless system qualified as a "Video Oesophago Gastroscope" as per the notification's provisions.