Accessory classification for MRI-linked medical equipment supports exemption, while demand fails when adjudication goes beyond the notice.

Sonalleve MR HIFU KIT was treated as an accessory to an MRI apparatus because it was usable only with MRI machines, could not function independently, and had a functional nexus with MRI-based treatment. Applying Note 2(b) to Chapter 90, the Tribunal noted that parts and accessories suitable solely or principally for a particular machine are classified with that machine, supporting exemption eligibility under Notification No. 21/2002-Cus. and Notification No. 6/2006-C.E. The demand was also found unsustainable because the adjudication denied central excise CVD exemption on a ground not proposed in the show cause notice, which had only questioned the customs exemption.

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Issues: (i) Whether the Sonalleve MR HIFU KIT is an accessory to a magnetic resonance imaging apparatus and, on that basis, eligible for the claimed customs and central excise exemptions; (ii) Whether the demand could be sustained when the adjudication travelled beyond the scope of the show cause notice.

Issue (i): Whether the Sonalleve MR HIFU KIT is an accessory to a magnetic resonance imaging apparatus and, on that basis, eligible for the claimed customs and central excise exemptions.

Analysis: The goods were found to be usable only with MRI machines and to be incapable of functioning independently. Under Note 2(b) to Chapter 90, parts and accessories suitable for use solely or principally with a particular kind of machine are to be classified with that machine. The Tribunal applied the principle that an item which aids, enhances, or is essential to the operation of the principal machine may qualify as an accessory, and relied on the functional nexus between the HIFU kit and MRI-based treatment. The classification adopted by the importer under heading 9018 13 00 was also treated as supporting the accessory character of the goods.

Conclusion: The Sonalleve MR HIFU KIT was held to be an accessory to the MRI apparatus and eligible for exemption under Notification No. 21/2002-Cus. and Notification No. 6/2006-C.E.

Issue (ii): Whether the demand could be sustained when the adjudication travelled beyond the scope of the show cause notice.

Analysis: The show cause notice proposed denial of the customs exemption, but it did not contain a proposal or allegation regarding denial of the central excise CVD exemption. The adjudication order nevertheless denied the CVD exemption and confirmed differential duty on that basis. A demand founded on a ground not put to the noticee in the notice cannot be sustained.

Conclusion: The demand was held unsustainable because the order exceeded the scope of the show cause notice.

Final Conclusion: The exemption claim succeeded and the duty demand was set aside with consequential relief.

Ratio Decidendi: Where goods are shown to be usable solely or principally with a particular machine and cannot function independently, they may be classified as accessories with the principal machine; a demand cannot be sustained on a ground not proposed in the show cause notice.

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