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TMI Blog1991 (2) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... viable under the First Schedule and Section 3 of the Customs Tariff Act, 1975 respectively in respect of the Scheduled items. Heading 'B' in the Schedule to the said Notification relates to Life Saving Equipments. Item 19 under Heading 'B' of the Schedule to the said Notification reads as 'Intravenous Cannulae and Tubing for long term use'. 5. The following documents have been relied upon by the petitioners in support of their contention that the said goods are intravenous cannulae and tubing for long term use and therefore exempted from payment of customs and additional duty - (1) Letter dated 11th March, 1986 from the Deputy Chief Controller of Imports & Exports stating that "infusion sets; Transfusion sets; Butterfly needles for intravenous infusion .......and conversion devices is covered under Entry 21 of List 2 of Appendix 6 of Import & Export Policy 1985-88 (Vol. I), and its import is allowed under OGL by all persons subject to the conditions laid down;" (2) A similar letter dated 11th February, 1987 from the Deputy Chief Controller of Imports & Exports; (3) A letter dated 26th July, 1988 from the Office of the Chief Controller of Imports & Exports clarifying that Butter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered scalp vein sets as coming within the relevant entry of the exemption notification and OGL the Bench finds no reason to disagree with the earlier two judgments of this Tribunal on the issue." (9) The decision of CEGAT in M/s. Unival Surgical Traders v. Collector of Customs, Cochin reported in 1988 (37) E.L.T. 58 (Tri.) = 1988 (17) ECR 562 in which it was held that scalp vein sets (Hakko Brand) are intravenous cannulae and tubing for long term use, hence entitled to benefit under Notfn. 208/81-Cus. - As stated above, the Dy. Chief Controller of Imports and Exports has clarified in his letter that the imported goods namely "scalp vein sets" are covered under Entry 21 of List 2 of Appendix 6 to AM 1985-88 Slad Entry No. 21 of List 2 of Appendix 6 in AM 1983-88 and entry at Sl. No. 19 of Schedule 'B' of the Notfn. 208-Cus., dated 22-9-1981 are identically worded. Under these circumstances when imported goods namely "Scalp Vein Sets are considered as Intravenous Cannulae and Tubing for long term use for ITC purposes as per the clarification given by the licensing authorities we think that the benefit of the said notification under its Sl. No. 19 of Schedule 'B' be not denied to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of Hakko Brand Scalp Vein Sets under Item 19 of Schedule B of the said Notifications by not preferring any appeal from the decisions of CEGAT in Hargovindas' case (supra), the Customs Authorities were behaving in an arbitrary fashion in refusing the benefit of the said Notification to the petitioners. Reliance has been placed on the decision of the Supreme Court in Kumari Shrilekha Vidyarthi v. State of U.P. & Others reported in JT 1990 (4) S.C 211 in which it has been held : "Every state action must be informed by reason and it follows that an act uninformed by reason, is arbitrary. Rule of law contemplates governance by laws and not by humour, whims or caprices of the men to whom the governance is entrusted for the time being. It is trite that 'be you ever so high, the laws are above you'. This is what men in power must remember, always." (5) Fifthly it is contended that one authority (viz. the Office of the Controller of Imports & Exports) having classified the item under 'Intravenous Cannulae & Tubing (for long term use)' under List 2 of Appendix 6 of the Import Export Policy 1985-88 there was no reason why the Customs Authorities should adopt a different classificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of Import, under the item "Intravenous Cannulae and Tubing for long term use" appearing vide Item No. 32 OGL, List 2, Appendix 6 of Import & Export Policy 1988-91 and Item No. 19 List 'B' of Ministry of Finance Notification No. 208/81-Customs, dated 22-9-1981, has been examined recently on this Directorate by an Expert Committee. After detail examination/consideration of the Issue, the Committee have decided that long term Cannulae are different and made of special material for use in prolonged intravenous cannulation, and that simple Disposal I.V. Sets having a metallic needle as I.V. Component, cannot be used in long term cannulation and therefore, are not eligible to be termed as long term cannulae for the purpose of Import under OGL, List 2 and Notification No. 208/81-Customs. The Committee had further added that Disposable I.V. Sets are also being manufactured in the country. Yours faithfully, Sd/- 9 -9-1988 [Dr. (Mrs.) I.K. Sharma] Assistant Director General (Medical) (3) A letter dated 31-12-1990 from the Assistant Collector of Customs, Appraising Group V, Kandla to the Assistant Collector (Appraisement) at Bombay, Madras, Calcutta and New Delhi which states : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/81 but are infusion sets for the purpose of administration of medicines or fluids correctly falling under the Notification 65/88. (5) An order dated 20-12-1989 passed by a learned Single Judge of this Court in Mr. L.H.K. Shah v. Union of India & Ors. in which the Court dismissed a writ petition in similar circumstances by holding: Matter No. of 1989 In the High Court at Calcutta Constitutional Writ Jurisdiction Original Side Before: The Hon'ble Mr. Justice Susanta Chatterji 20-12-1989 Mr. Lena Hans Kumar Shah Vs. Union of India & Ors. Mr. J. Ahmed appears for the petitioner. Mr. Sibdas Banerjee appears for the respondents. The Court: The writ petitioner has filed a writ application, inter alia, praying for a writ of Mandamus commanding the respondents and each of them to release the goods, namely Intravenous Cannulae and Tubing long term use infusion sets as covered by Item No. 19 of General Exemption. Upon hearing the learned Counsel of both sides and upon perusing the materials on record and perusing the demonstration of the product sought to be imported, this Court finds that the goods are of single use and disposable and admittedly being one of the infusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the Intravenous Cannulae Set and Scalp Vein Sets. The literature next to each illustration reads as follows: "(I) INTRAVENOUS CANNULA GS 231 STERILE - READY FOR USE Soft pliable plastic cannula is suitable for extended use. Fitted with coloured female luer mount for size indication. Length: 30 cm. (2) INTRAVENOUS CANNULA SET GS 265 STERILE - READY FOR USE Suitable for extended use. Each cannula is provided with appropriate needle. Fitted with colour coded female luer mount. Length: 30 cm. (3) S.CALP VEIN SET GS 226 STERILE - READY FOR USE Short Bevel thin wall needle provides attraumatic insertion and better flow. Embossed wings provides better grip. Transparent, flexible, siliconised blackline tube for easy handling. Flexible colour coded wings allows instant identification of needle gauge." (8) An extract from the Manual of Viggo-spectramed showing inter alia the instructions for use of Argyle 'Medicut' intravenous cannulae which show the parts of the cannula as the Sheath, cap, needle with syringe and the cannula. The cannula is described as a 'plastic cannula'. (9) An extract from the British Encyclopaedia & Medical Practice (2nd Editi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant Bill of Entry had stated that the Customs Duty was 40%. The respondents had acted on the same and provisionally assessed the Customs Duty at the rate specified by the petitioners. It is contended that the action of the respondents in claiming duty at 40% ad valorem could not in the circumstances be termed arbitrary. (5) It is contended that the petitioner having themselves accepted the imposition of Customs Duty at 40% ad valorem could not resile from the position. Reliance is placed upon the decision of a learned Single Judge of this High Court in the case of Rungta & Sons (P) Ltd. &Anr. v. Collector of Customs, Visakhapatnam & Ors. reported in 1986 (23) E.L.T. 14 in this regard. 12. A sample of an intravenous cannula set of Viggo was also produced by the Respondents, 13. Keeping in view the observations of the Appellate Court in the matter of L.H.N. Shah's case (supra) the rival contentions are dealt with in detail. 14. The cornerstone of the respondent's argument is the second notification. There is no doubt that the decisions of the CEGAT relied upon by the respondents were all delivered at a time when the second notification was not in force. The second notification i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an exception. 16. It is admitted by the petitioners that Scalp Vein sets are infusion sets. The question is whether scalp vein sets come within the definition of intravenous cannulae etc. The word 'Cannula' has been defined in the Shorter Oxford English Dictionary 3rd Edn. as follows :- "A tubular instrument introduced into a cavity or tumour in order to allow fluid to escape. Hence cannular : tubular." The word 'intravenous' has been defined in the same dictionary as - "Existing or taking place within the vein or veins." Reading the two meanings together 'intravenous cannula' must mean a tube which is inserted in the vein. From the illustrations in the various manuals relied upon by the respondents it appears that all intravenous cannulae infusions sets have a small plastic tube round the needle. The sample intravenous cannula set produced by the respondents also showed that apart from the plastic sheet covering the needle, the needle itself was encased in a thin catheter like plastic tube. The method of insertion of this plastic catheter has been shown in the various manuals and indicated by KNOTT in his article on Blood Transfusion in the British Encyclopaedia and Medical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Traders case (supra). In that case the decision was delivered on 30th May, 1988, several months before the second notification came into force. The Tribunal could not have in the circumstances considered the effect of the second notification as far as scalp vein sets were concerned. 22. It has not been shown whether after the letter dated 31-12-1990 referred to above, from the Assistant Collector, Kanda to other Assistant Collectors in the major ports of the country, there have been any instances when the Customs Authorities have permitted scalp vein sets to be imported under Notification No. 208/81. It cannot be presumed that the Customs Authorities in all the ports in India will not conform to the interpretation of the phrase 'intravenous cannula' as suggested by the Assistant Collector, Kandla in his circular letter dated 31-12-1990. In the circumstances the decision in Mitsuny Electronic Works (supra) would not be applicable. 23. I am also of the view that in the facts and circumstances of this case the principle laid down in Caprihans India Ltd. (supra) is not applicable. A case cannot be precedented for a proposition not argued [see M/s. Goodyear India Ltd. v. State of Har ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to duty at 40% ad valorem. It cannot be said that the materials considered by the Customs Authorities were irrelevant. Furthermore, in this particular case it must be noted that the petitioner itself through its Clearing Agent has stated the customs duty as being 40%. 27. It has also not being shown whether after the second notification came into force, the office of the Controller of Imports & Exports has continued to treat scalp vein sets under the head 'intravenous cannula and tubing for long term use'. In any event and assuming this to be so, this would only be one factor not in itself conclusive for deciding the question whether the scalp vein sets should be treated as coming under the first or the second notification. Similarly the mere failure on the part of the respondents to reply to the letters of the petitioners would not by itself lead to a conclusion that the action of the Customs Authorities in refusing the release of the said goods without payment of duty is bad. In the case of Raymond Woollen Mills (supra) a clarification had been asked for by the writ petitioner from the respondent authorities, whether a licence was needed or not. The respondent authorities did ..... X X X X Extracts X X X X X X X X Extracts X X X X
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