Strict construction of customs exemption notifications narrows ultrasound equipment relief to specified systems only

Imported ultrasound systems were held to fall outside Notification No. 16/2000-Cus where the notification specified only particular ultrasonic equipment such as A scan and pacchy meters. The Court applied strict construction to exemption notifications and rejected the argument that systems with additional functions, including B scan or M scan features, remained exempt merely because they contained an A scan component. It also treated the deletion of earlier equipment references in later notifications as significant to the scope of the exemption. The matters on limitation and another notification were left for further Tribunal consideration.

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Issues: Whether ultrasonic equipment imported by the respondents, having the feature of A scan along with additional features such as B scan and M scan, fell within Notification No. 16/2000-Cus dated 01.03.2000 granting exemption to "Ultrasonic equipment (A scan/Pacchy meter)".

Analysis: The earlier exemption notifications showed that when B scan coverage was intended, it was expressly included. The later notifications progressively omitted B scan and confined the entry to A scan and Pacchy meter. The Court treated this change in wording as significant and held that the entry in the 2000 notification could not be expanded to cover equipment not clearly specified. The clarification relied upon for later budget changes distinguished between specified equipment and multiple applications of such equipment, and did not permit enlargement of the notification itself. Exemption notifications were required to be strictly construed, and only goods clearly falling within the language of the notification could receive the benefit.

Conclusion: The imported ultrasound systems with additional features were not covered by Notification No. 16/2000-Cus dated 01.03.2000, and the Revenue's view was accepted.

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