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TMI Blog2015 (5) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... levant is that in the original Notification dated 11.06.1986, as amended on 01.03.1989 and 01.03.1994, the goods which qualified for exemption were “Defibrillators for internal and external use and pacemakers and their accessories including patient cable internal defibrillator paddles 45mm and 55mm sizes”. Implantable cardiac pacemaker and accessories were also specifically included. This entry under went a substantial challenge in the notification No. 8/96 dated 23.07.1996. In this Notification, replacing the earlier notifications, defibrillators for external use are no more eligible for exemption. - Though in the earlier notification, patient cable for pacemaker was included as exempted item, it is omitted altogether in Notification No.8/96. This position is maintained in Notification No.4/97 dated 01.03.1997. Defibrillators are not capable of being used internally without paddles and paddle is an accessory which does not qualify for exemption any longer. It would be pertinent to note that in Handicraft Export's case this Court also held that importer will have to prove that the goods were not only capable of being utilized as embellishment for shoes but also that the same wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctrical shock through paddles placed either directly across the heart or on the surface of the body during cardiac emergency resulting from ventricular fibrillation. The meaning of Cardiac Defibrillator is explained in Medicine and Clinical Engineering Physiological and Clinical Medicine by Bertil Jacobson Karolinska Institute, Stockholm, Sweden, Jhon G. Webster, University of Wisconsin, Medison. It reads as follows:- Some cardiac arrhyhmias can be treated by passing a brief electric shock through heart. Ventricular fibrillation can often be stopped before circulatory arrest has caused irreversible brain damage due to oxygen deficiency. Likewise, atrial fibrillation and atrial flutter can often be stopped by defibrillator. 4) Ventricular fibrillation may be caused by an external electric shock, which occurs near the peak of the T wave- the vulnerable period when the ventricle is re polarizing. It may also be caused when a PVC occurs during this same vulnerable period; in this case the heart electrocutes itself. Fibrillation has been likened to a dog chasing its tail, with continuous travel of the waves of depolarization and repolarization. During defibrillator, a large elec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation of statute. The CEGAT, by its order dated 01.03.2002, held that the Commissioner had come to a finding on an incomplete reading of the manual and had not considered well-settled law on 'for use'. The CEGAT, therefore, remanded the matter back to the Commissioner to decide eligibility for exemption under above notifications. It further directed that during the re-adjudication both the sides were free to lead such evidence as were available to be put before the Adjudicating Authority. They left open the question of limitation, penalty and interest. 7) On remand, the appellant filed a further reply before the Commissioner and relied upon various documents in support of its contention that its Defibrillator was capable of internal use and the said Defibrillator and implantable Defibrillators were two different pieces of equipment. The appellant again contended that the demand was time barred, as there was no suppression of facts. The appellant appeared for personal hearing and reiterated its submissions and filed additional written submissions. It produced photographs showing the Defibrillator being put to internal use during open heart surgery as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption is granted in respect of defibrillator, from time to time. First notification in this behalf is the Notification No. 339/86 dated 11.06.1986, which was amended by notifications dated 01.03.1989 and 01.03.1994. Material part of these Notifications read as under: Notification No. 339/86-CE dated 11.06.86 amended by Notification Nos.88/89-CE dated 01.03.89 and 58/94-CE dated 01.03.94. 8 DC Defibrillators now internal use and Pacemakers and their accessories including patient cable, internal Defibrillators Paddles 45mm and 55mm sizes but excluding:- (a) Cardiac Monitors (b) Cardioscopes (c) E.C.G. Monitors of any type. (d) E.C.G. Recorder and the following components of D.C. Defibrillators, namely:- (i) Connector. (ii) Discharge/Damp Relay (iii) High Voltage Retractable, Flexible Wire (iv) Polyester/Paper Discharge Capacitor 20. Implantable Cardiac Pacemaker and accessories. 30. Pacemaker Wires. 31. Patient Cable for Pacemaker. 13) We now reproduce the relevant portion of the two Notification Nos. 8/96 and 4/97 with which we are directly concerned. These are as follows:- II. Notification No.8/96 dated 23.07.1996- TABLE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended from time to time and taken note of above, we have to examine as to whether the defibrillator of the appellant would be covered by these two Notifications. 16) It is not disputed by the appellant that their Defibrillators are primarily meant for external use. It is, however, contended that this can be used internally as well. It is also admitted case that the defibrillator manufactured by the appellant is not implantable internally in the human body. The only justification given by the appellant is that at the time of carrying out the open heart surgery same device can be used to deliver electrical shock. However, it is accepted that to give the electrical shock paddles are needed, which is sold by the appellant only as an accessory. Not only this, while selling the defibrillators said paddlers are not sold as an integral component/accessory of the main equipment. To the contrary, their purchase is optional, meaning thereby the choice is that the buyer to purchase paddle or not. During the arguments it was conceded that 99 per cent sale of these defibrillators were without paddles which means that predominantly the goods are sold for external use only. We would also l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the exempted category are not taken out of such category under Notification Nos. 8/96 and 4/97. If the assessee s contention is to be accepted then in spite of such specific exclusion its product will continue to get benefit of exemption on the basis of supply of some optional accessories like internal paddle. 6. The material produced by the Revenue before the Commissioner and accepted by him were later made available toe the assessee before this Tribunal. Arguments were addressed by both on that basis. The relevant portion from the Commissioner s order is quoted below:- Internal Cardioverter Defibrillators (ICD) were originally developed and have been most frequently used for prevention of sudden cardiac death (www.americanheart.org). A modern internal defibrillator is much smaller and is implanted in the upper chest. Newer devices are a combination of ICD and pacemaker in the unit. These combination ICD/pacemakers are implanted in patients who require both devices (www.emedicine.com)........ This device is a small electric generator hooked up to wires called leads. A typical ICD weighs about 4 ounces and measures about inch thick by 2 inches wide and is implanted under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur, Rajasthan (1995) 4 SCC 473, wherein this principle was stated in the following manner: 16. Lastly, it is for the assessee to establish that the goods manufactured by him come within the ambit of the exemption notification. Since, it is a case of exemption from duty, there is no question of any liberal construction to extent the term and the scope of the exemption notification. Such exemption notification must be strictly construed and the assessee should bring himself squarely within the ambit of the notification. No extended meaning can be given to the exempted item to enlarge the scope of exemption granted by the notification. 19) This principle has been reiterated time and again. It is not necessary to take note of all such cases. We would however like to reproduce the restatement of this member by the Constitutional bench of this Court in Commissioner of Central Excise, New Delhi v. Hari Chand Shri Gopal Ors. (2001) 1 SCC 236, as follows: 29. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbay v. Handicraft Exports (1997) 7 SCC 144 will also have no application to the instance case. In that case exemption from import duty was provided in respect of 'embellishment for footwear under the notification. The Court held that the imported goods need not be capable of being exclusively used as embellishment for footwear but may also be capable for being used for other purposes. Here, as noted above, defibrillators are not capable of being used internally without paddles and paddle is an accessory which does not qualify for exemption any longer. It would be pertinent to note that in Handicraft Export's case this Court also held that importer will have to prove that the goods were not only capable of being utilized as embellishment for shoes but also that the same were imported for and were actually been used for embellishment for footwear. In the present case as defibrillators are sold without paddles, obviously the sale as such is not intended by the purchaser to be used for internal purpose. We are, therefore, of the view that the majority opinion of the Tribunal is correct in law. 22) This leaves us with the question of extended period of limitation invoked by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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