[Order per : P. Karthikeyan, Member (T)]. - Appeal No. C/8/2008 filed by M/s. Wipro GE Medical Systems Pvt. Ltd. (Wipro) seeks to vacate the Order-in-Appeal No. 125/2007-Cus. (B) dated 15-10-2007. Appeal No. C/629/2007 has been filed by the Revenue against the Order-in-Appeal No. 92/2007-Cus. (B), dated 26-7-2007. As the issue involved in both the appeals is eligibility to exemption of medical equipment described as “Ventilator used with Anaesthesia Apparatus” imported under cover of 5 Bills of Entry during the year 2006-2007 by Wipro, they are taken up together.
Appeal No. C/8/2008 (Wipro GE Medical Systems)
2. Wipro imported goods described as “Anaesthesia Ventilator System” (Aestiva/5 under the cover of Bills of Entry No. 254719 and 273775 dated 22-9-2006 and 18-10-2006 respectively). They imported same equipment of model S/5 Aespire under the cover of Bill of Entry S. No. 365826 dated 14-2-2007. The consignments cleared under Bills of Entry No. 254719 and 273775 dated 22-9-2006 and 18-10-2006 respectively were allowed exemption in terms of Notification No. 21/2002-Cus., dated 1-3-2002 in terms of Sl. No. 363 (A), List 37, Item 30 which extended concessional rate of 5% basic customs duty and full exemption from CVD in terms of Notification No. 6/2006-C.E., dated 1-3-2006 vide Sl. No. 61. The goods were classified under CSH 9019 2090 of Customs Tariff. After clearance, a notice was issued to the appellants and the Original Authority, after due process of law, confirmed differential duty of Rs. 7,04,374/- (Rupees Seven lakh four thousand three hundred and seventy four only) against Wipro in respect of the goods cleared under these 2 Bills of Entry denying the exemption allowed to the goods at the time of their clearance. The equipments cleared under Bill of Entry Sl. No. 365826 dated 14-2-2007 was allowed clearance on payment of merit rate of duty. Thus the Orders-in-Original passed assessing the impugned goods on merit rate finding that the same were not covered by Sl. No. 363(A), List 37, Item 30 of Notification No. 21/2002-Cus., dated 1-3-2002 and Notification No. 6/2006-C.E., dated 1-3-2006 vide Sl. No. 61. The impugned order disposed appeals filed by Wipro against both the Orders-in-Original vide Order-in-Appeal No. 125/2007-Cus. (B), dated 15-10-2007 sustaining the orders of the original authority. In the appeal filed before us, the impugned order is assailed on the ground that the Commissioner (Appeals) had relied on an expert opinion which had not been furnished to the appellants. Therefore, the impugned order was passed in violation of principles of natural justice. The same deserved to be vacated. The appellants relied on several case laws in support of this prayer.
3. In CC, Mumbai v. Toyo Engineering India Ltd. reported in (Supreme Court), the Apex Court had held that the Department could not travel beyond the show cause notice and rely on grounds which did not find mention in the show cause notice. The impugned order was not sustainable also since, in respect of import of an identical equipment, vide Order-in-Appeal No. 92/2007, dated 26-7-2007, the same authority had vacated the order of the original authority denying the benefits extended under Notification No. 21/2002-Cus., dated 1-3-2002 and No. 6/2006-C.E., dated 1-3-2006. Such contrary to decisions were not maintainable in law. The appellants relied on the judgment of the Hon’ble High Court of Kerala in Joy v. Regional Transport Authority - (Ker.) wherein it was held that the judicial officer shall not err in consistency and that he should be consistent even in illegality.
4. During hearing, the learned Counsel representing the appellants cited the decision of the Delhi Bench of this Tribunal vide Final Order No. C/126-129/2009 2009 CU (DB), dated 6-3-2009 [ (Tribunal)] in the case of CC, (I & G), New Delhi v. M/s. Dates Ohmeda (India) Ltd. and M/s. Wipro GE Healthcare Pvt. Ltd. wherein identical equipments imported by Wipro were held to be entitled to the disputed exemption.
5. We have heard both sides.
6. The issue involved in this case is the eligibility to exemption contained in Notifications No. 21/2002-Cus., dated 1-3-2002 and 6/2006-C.E., dated 1-3-2006 to “Ventilator used with Anaesthesia Apparatus”. Both the notifications extended the concession to the goods described as “Ventilator used with Anaesthesia Apparatus”. After constituting the literature on the products furnished by the appellants, the Commissioner (Appeals) found that the equipment was an integrated anaesthesia delivery system. Since the machine’s function was anaesthesia delivery, but was also used for ventilation during surgery by incorporating ventilator function, such machines could not be called as “Ventilator used with Anaesthesia Apparatus”. The main machine was Anaesthesia Apparatus and the ventilator entitled to exemption should be used with such apparatus. He held that to be eligible for the benefit, the equipment should be basically a ventilator capable of being used with Anaesthesia Apparatus or actually used with it. This meant that the benefit could not be extended to Anaesthesia Apparatus used with ventilator function or to a composite machine having pre-dominant function as Anaesthesia delivery, incorporating ventilator feature. The expert opinion produced by the Department had supported such a view.
7. We find that the technical literature of the manufacturer viz Datex Ohmeda on the product reads as follows :
“Aestiva/5 essentially a ventilator system used for ventilating patients undergoing anesthesia procedure with provision of both mechanical and manual ventilation. Aestriva/5 and Aestivate/5 7100 are microprocessors based electronically controlled, pneumatically driven ventilators with in built monitoring system for inspired oxygen, airway pressure and exhaled volumes. Sensors in breathing circuit are used to control and monitor patient ventilation as well as measure inspired oxygen concentration. This allows for the compensation of compressor losses, fresh gas contribution and small leakage in the breathing absorber, bellows and system. User setting and microprocessor calculations control breathing patterns. User interface stores settings memory. The user may change settings with simple and secure setting sequence. Positive End Expiry Pressure (PEEP) is regulated electronically. The Aestiva/5 7100 has standard volume control and optional pressure mode of ventilation. The Aestiva/5 7900 has both volume control and pressure control modes of ventilation with options of upgrading to SIMV and pressure support ventilation modes. SIMV and pressure support modes are used in case the patient has a respiratory drive that requires support for their spontaneous breathing.”
7.1 The expert opinion rendered by India Society of Anesthasiologists, Kolkata and Delhi Heart and Lung Institute, New Delhi furnished by Wipro explained the functions of the impugned equipment as follows :
“The anesthetic gas mixture delivered to the patient through the ventilator for inducing and maintaining anesthesia, consists of oxygen and Nitrous oxide or air combined with volatile anesthetic agent concentration. The user selects the proportions of these gases based on the requirement of the patient. The ventilator system consists of pressure reducing valves, calibrated flow meters and calibrated vaporizers for mixing of the anesthetic gas that will be delivered to the patient through ventilator. The ventilator is equipped with the patient breathing system consists of the bellows assemble, circle module, re-breathing bag and the breathing circuit. This patient breathing system contains the anesthetic gas mixture to be delivered to the patient.”
8. The impugned equipment has composite functions with that of ventilator as the pre dominant function. From the records we find that an individual anaesthesia ventilator system (Impugned goods) would cost approximately Rs. 10 to 12 lakhs, as against the cost of an anaesthesia equipment which would cost approximately Rs. 30,000/- to Rs. 50,000/-. From the description of the functions of the impugned goods, we find that the equipment is a ventilator used with anaesthesia apparatus and entitled to the disputed exemption benefit. In the Final Order No. C/126-129/2009 2009 CU (DB), dated 6-3-2009 [ (Tribunal)] cited by the appellants, the Tribunal had observed as follows :
“6.2. The Department wants to consider the ventilator with anesthesia apparatus as a mere anesthesia delivery system. The respondents want to treat the same as ventilator system with in-built anesthesia device. The notification grants exemption to ventilator used with anesthesia apparatus. The claim of the respondents that the imported goods are covered by the description in the notification is well founded. It cannot be merely considered as anesthesia delivery system. We find the ventilator and the anesthesia apparatus are supplied in an integrated manner. It has not been claimed by the Department the ventilator system is detachable and useable separately. The submission that the cost of stand alone, anesthesia apparatus is meagre compared to the cost of the impugned goods is also relevant and the same does not support the claim of the Department that the ventilator is merely an additional feature. Therefore, we agree with the submissions of the ld. Advocate for the respondents that the impugned goods can be considered as ventilator used with anesthesia apparatus and eligible for the exemption claimed.”
9. In the circumstances, we find that the impugned order is not to be sustainable in law and accordingly, we vacate the same and allow the appeal filed by Wipro.
Appeal No. 629/2007
10. This appeal is filed by the Revenue canvassing denial of the benefit of notifications to similar goods as impugned in the above appeal filed of the importer and seeks to vacate the Order-in-Appeal No. 92/2007 dated 26-7-2007. As we have held that the impugned goods “Ventilator used with Anaesthesia Apparatus” are entitled to the disputed notification benefits, this appeal filed by the Revenue is rejected.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)