2018 (8) TMI 908 - AT - Customs

Applicability of exemption notifications - N/N. 21/2002-Cus. dated 1.3.2002 and N/N. 6/2006-CE dated 1.3.2006 - Anesthesia Ventilatory System i.e., Aestiva /5-7100; Avance/5; Aestiva/5-7900; S/5-Aespire and Aisys - appellants have classified the goods under CTH 9019 2090 and claimed concessional rate of duty as per Sl. No.363 (A), List 37 of Notification No.21/2002-Cus. dated 1.3.2002 and Item No.3 under Central Excise Notification No.6/2006 dated 1.3.2006 - benefit of notifications denied. Held that - The impugned equipment is composite equipment. Whereas the department sees the equipment to be an anesthesia machine having an accessory in the form of ventilator, the appellants have presented the same as a ventilator used with anesthesia machine. On perusal of the brochure for AestivaTM /5 Compact mentions that bags or vent switch turns mechanical ventilator on or off without additional controls. The literature available appears to show that the impugned equipment is basically an anesthesia equipment with a ventilator which increases the capacity of the machines to cater to the requirements of the patients as and when such a need arises. The ventilatory system appears to be part of the design of the machines; therefore, it has to be held that the ventilator is part of the anesthesia systems imported by the appellants - exemption Notification is clear that the exemption is available for the ventilatory system used with anesthesia operators while there is no doubt in our minds that exemption is available for the ventilatory systems, used with the anesthesia systems. The impugned goods are ventilators which are used with Anesthesia Systems. The predominance of the ventilator/Anesthesia System is not the context of the Notification. As long as, they are ventilators and used with Anesthesia Systems, exemption should be available - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Classification of imported goods under CTH 9019 2090 and eligibility for concessional rate of duty.
2. Interpretation of Notifications regarding exemption for ventilatory systems used with anesthesia operators.
3. Consideration of expert opinions and previous tribunal decisions.
4. Application of exemption Notification and ambiguity in interpretation.
5. Technological advancements and previous favorable decisions for the appellant.

Analysis:

Issue 1: Classification and Concessional Rate of Duty
The appellants imported Anesthesia Ventilatory Systems and claimed concessional duty rates under specific Notifications. The department denied the concessional rate, leading to the appeal. The appellants argued that the goods should be classified as a ventilatory system used with anesthesia operators, making them eligible for the claimed exemption.

Issue 2: Interpretation of Notifications
The main contention was whether the impugned goods qualified as ventilators used with anesthesia operators as per the Notifications. The appellants provided technical evidence and expert opinions supporting their classification. The departmental representative argued that the equipment was predominantly an Anesthesia Delivery System with a ventilatory function, not meeting the criteria for the exemption.

Issue 3: Expert Opinions and Tribunal Decisions
The appellants presented expert opinions from professional bodies supporting their classification. They also cited previous tribunal decisions in their favor, emphasizing that the issue had been settled in previous cases involving similar goods and Notifications.

Issue 4: Application of Exemption and Ambiguity
The Tribunal analyzed the language of the Notifications and the nature of the impugned equipment. It was observed that the equipment appeared to be a composite system with both anesthesia and ventilatory functions. The Tribunal considered arguments regarding strict interpretation of exemption Notifications and the burden of proof on the assessee.

Issue 5: Technological Advancements and Previous Decisions
The appellants highlighted technological progress and previous favorable decisions in their favor. They argued that the benefit extended to them in earlier cases should not be denied based on new interpretations or fresh evidence introduced by the department.

In conclusion, after considering the submissions, expert opinions, relevant Notifications, and previous tribunal decisions, the Tribunal allowed the appeal, finding that the impugned goods could be considered as ventilators used with anesthesia apparatus, thus eligible for the claimed exemption. The decision was based on the clear language of the Notifications and the absence of ambiguity, along with the precedents favoring the appellants.