- (1.) The present case relates to appeals filed both by the Assessee and by the revenue against the judgment dated 20th January, 2006 passed by Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as "CESTAT"). The Appellant company had been importing various models of diagnostic equipment such as BTS 302, BTS 310, BTS 320 and BTS 370 manufactured and supplied M/s. Bio Systems, Barcelona, Spain. On 27th May, 1999, the Appellant in its Bill of Entry filed at Hyderabad for clearance of models of BTS 320 and BTS 310 classified the goods as "auto analysers" under Entry 9030.89 of the Customs Tariff Act, 1975. The goods were seized by the custom authorities, being a total of 8 BTS 320 and 15 BTS 310 models, valued at Rs. 26,97,741.21. During the course of investigation, statements of six persons were recorded Under Section 108 of the Customs Act. On 2nd November, 1999 the Directorate of Revenue Intelligence, Chennai issued a show cause notice stating that the goods in question are "photometers" and not "auto analysers". On this basis, the revenue demanded: (a) Duty of Rs. 1,79,11,499/- [as detailed in Annexure 11 to the Notice] towards import of BTS 302, BTS 310, BTS 320 and BTS 370 from 1994 till 1999. (b) Confiscation of goods valued at Rs. 3,31,55,908/- imported without payment of duty and sold (in the market) as auto analysers Under Section 111(m) of the Customs Act, 1962. (c) Confiscation of goods valued at Rs. 26,97,741/- imported vide Bill of Entry No. 4454 dt. 27-05-99 and seized by the officers of DRI on 8.6.99 Under Section 111(m) of the Customs Act, 1962. (d) Penalty Under Section 114A of the Customs Act, 1962. (e) Penalty Under Section 112(a)/112(b) of the Customs Act on Dr. Jayaram Chigurupati, Senior Vice President and in-charge of Diagnostic Division of the Appellant.
(2.) On 24th December, 1999, the Assessee sent a detailed reply to the said show cause notice and explained that the imported equipments were "Auto Analysers" which used the photometry principle and were different from photometers. Being a pathology lab, these equipments were imported for the purpose of automatic analysis of blood samples. This, according to the Assessee, could not be done by a photometer. The only difference between the four models imported was that whereas model BTS 370 was technologically superior and fully automatic, the other models were not as technologically advanced nor were they fully automatic. However, insofar as the analysis of Enzymes is concerned, the said two models, namely, BTS 310 and BTS 320 were fully automatic, the only non-automatic part being the manual mixing of certain elements with blood samples. They further relied upon the technical literature to buttress their point and claimed that they were exempted under notification No. 20/1999 : , dated 28th February, 1999. The said notification exempts medical equipments specified in List 21, serial No. 66 of which reads as follows: Sl. No. 66: Blood Gas Analyser (including cartridges, if any) Sodium Potassium Analyser, Auto Analyser for Enzymes, Drug Levels and Biochemical Investigations, or a combination of two or more of the aforesaid.
(3.) The Assessee was given a hearing on 9th January, 2001 by the learned Commissioner of Customs, Hyderabad. In a detailed order dated 1st March, 2001, the learned Commissioner went through the show cause notice and the reply filed by the Assessee. He correctly concluded that the issue for determination was whether the impugned goods were qualified to be called "auto analysers" of Enzymes, drug levels and biochemical investigations. In this connection, he referred to a book by "Tietz Text Book of Clinical Chemistry", second edition, edited by Carl A. Burtis and Edward R. Ashwood. More importantly, in para 46, which deserves to be quoted, the Commissioner found: 46. This very question came up for examination before the conference of Commissioners of Customs held in Cochin in October 1995 in the context of Notification No. 55/95-Cus. dated 16.3.95. It would be important and relevant to reproduce the extracts of the minutes of the said conference herein below: The issue raised by the Board was whether the term "Auto Analysers for enzymes, Drug levels and Biochemical investigations" could be applied to Analyzers in which a part of the operations are performed manually, like some in which mixing of samples and reagents is done manually but the actual analysis is done automatic. The doubt arose since a view existed that the term applied only to those instruments in which all operations, including mixing of samples and reagents are automatic. However, in one particular case of semi-automatic analyser "Technician-Chemistry Auto Analyzers', the DGHS had clarified that the term could fall within the item auto Analyzers in the predecessor Notification namely 122/94-Cus. CONFERENCE CONCLUSION: The conference was of the view that the process of analysis is automatic, though mixing of sample is done manually. It is to be noted that for the exemption to accrue under the entry at SI. No. 77 thereto, all that is required is that the analysis has to be done automatically. TRU may, however, examine in consultation with the administrative Ministry concerned whether they would like this entry to be amended in any manner to remove ambiguity. Thus what is crucial to determine whether a medical equipment is an auto analyser or not is to see whether the analysis is done automatically or not. All the models (BTS 302, BTS 310, BTS 320 and BTS 370) in the impugned goods did not achieve this purpose. of course, more and more features increasing the extent of automation have been built-in in the later models as compared to the earlier models. But all of them are auto analysers. It would also be relevant to note that the Minutes of the Conference of Commissioner's of Customs extracted above also indicates that DGHS a competent expert body did clarify that a semiautomatic analyser was eligible for the exemption under Notfn. No. 122/94-Cus. as auto analyser. Furthermore inspite of the recommendation of the Conference of Commissioners of Customs to amend the entry relating to auto analysers if found necessary for the purpose of removing ambiguity, no such amendment has been carried out till date indicating that there is no ambiguity regarding the scope of the expression auto analysers as viewed by the Conference of Commissioners of Customs.;