2024 (12) TMI 967 - AT - Customs

Medical oxygen cylinders for ambulances classified as medical equipment not gas containers under CTH 90189099

M/s. GVK Emergency Management Research Institute Versus Commissioner of Customs (Port), Kolkata

CESTAT Kolkata allowed the appeal regarding classification of imported empty medical oxygen cylinders with valves. The tribunal held that cylinders ... Classification of imported goods - empty cylinders along with valves - cylinder accessories - to be classified under CTH 90189099 or under CTH 73110030? - Contravention of provisions of GCR, 2004 and GCR, 2016 - Invocation of extended period of limitation. Classification of goods - HELD THAT:- CTH 73110030 deals with containers for carrying compressed or liquefied gases. However, it is seen that the cylinders imported by the Appellant are meant for carrying medical grade oxygen for life supporting purposes. They are meant for carrying liquefied gases in general. Chapter Heading 9018 deals with appliances or apparatus used for medical/surgical/dental/veterinary sciences. It is on record that the cylinders, after being filled with oxygen, are used in the ambulances for life saving purposes. It is immaterial whether the cylinders are made up of steel or aluminium. As long as they are fitted in ambulances and used to store and supply medical oxygen to patients during transportation, it is to be considered as a life supporting medical equipment. In the present case, it is not in dispute that the goods imported are to be fitted in 108 / 102 Ambulance services, under the Janani Shishu Suraksha Karyakram (JSSK) Scheme, for 24*7 free transportation of expecting mothers and sick infants (up to one year from birth) through toll-free centralized call centres. The impugned goods imported by the Appellant are more appropriately classifiable under CTH 90189099, as claimed by them for the Bill of Entry No. 7836092 dated 15.12.2016 - the differential duty confirmed in the impugned order is set aside on account of re-classification of the impugned goods. Contravention of provisions of GCR, 2004 and GCR, 2016 - HELD THAT:- Section 2 (xxi) of the GCR, 2004 defines Gas Cylinder or 'Cylinder' - the definition specifically excludes cylinders fitted in special carriage vehicles such as ambulances. Thus, the medical oxygen cylinders to be fitted in ambulances are excluded from the purview of GCR, 2004/GCR, 2016 or the jurisdiction of the Explosives Act, 1884 or licensing by the Chief Controller of Explosives. Accordingly, the GCR, 2004/GCR 2016 are not applicable for the impugned goods imported by the appellant, as the said Rules have specifically exempted imported gas cylinders which are to be fitted in ambulances/special transport. Thus, the confiscation of the impugned goods for violation of the provisions of GCR, 2004/GCR 2016, is not sustainable, accordingly, the same is set aside. Invocation of extended period of limitation - HELD THAT:- It is found that the Appellant has not suppressed any information from the Department. In these circumstances, the Show Cause Notice issued beyond the normal period of limitation is liable to be set aside. Consequently, the Show Cause Notice issued after four years from the date of importation is legally unsustainable and accordingly, the demand confirmed in the impugned order by invoking the extended period of limitation is liable to be set aside - thus it is observed that there is no mis-declaration or suppression with intention to evade duty established on the part of the Appellant. Accordingly, no penalty is imposable on the Appellant. The impugned goods imported by the Appellant vide Bill of Entry No. 7836092 dated 15.12.2016 are rightly classifiable under CTH 90189099. The demand of differential duty confirmed in the impugned order on account of re-classification is not sustainable and thus, the same is set aside - the impugned goods imported by the appellant to be fitted in ambulances are excluded from the purview of GCR, 2004/GCR, 2016 or the jurisdiction of the Explosives Act, 1884 or licensing by the Chief Controller of Explosives. Also, there is no violation of BIS certification. Thus, the impugned goods are not liable for confiscation and accordingly, the same is set aside - appeal allowed. Issues Involved:1. Classification of imported goods under the correct Customs Tariff Heading (CTH).2. Applicability of Gas Cylinder Rules, 2004 and 2016 to the imported goods.3. Validity of the Show Cause Notice issued after a significant delay.4. Legality of the confiscation order and penalties imposed.Issue-wise Detailed Analysis:1. Classification of Imported Goods:The primary issue was whether the imported empty cylinders and accessories should be classified under CTH 90189099 or CTH 73110030. The Appellant argued for classification under CTH 90189099, which pertains to 'instruments or appliances or apparatus used in medical, surgical, dental or veterinary sciences,' as the cylinders were intended for medical oxygen use in ambulances. The Department, however, reclassified the goods under CTH 73110030, which covers 'containers of any capacity used for transport or storage of compressed gas or liquefied gas.' The Tribunal held that the goods were more appropriately classifiable under CTH 90189099, as they were intended for life-supporting purposes in ambulances, thus supporting the Appellant's classification.2. Applicability of Gas Cylinder Rules:The Tribunal examined the applicability of the Gas Cylinder Rules, 2004 and 2016, which require certain certifications for gas cylinders. The Appellant contended that these rules were not applicable as the cylinders were to be fitted in ambulances, which are excluded under Section 2 (xxi) of the GCR, 2004. The Tribunal agreed with the Appellant, noting that the rules specifically exclude cylinders fitted in special transport vehicles like ambulances. Therefore, the goods were not subject to the provisions of the GCR, 2004/GCR, 2016 or the Explosives Act, 1884, and the confiscation on this ground was not sustainable.3. Validity of the Show Cause Notice:The Appellant challenged the validity of the Show Cause Notice, arguing it was issued four years after the importation, which is beyond the normal period of limitation. The Tribunal noted that the Appellant had not suppressed any information and that the delay in issuing the notice rendered it legally unsustainable. Citing precedents, the Tribunal set aside the demand confirmed in the impugned order due to the extended period of limitation being improperly invoked.4. Legality of the Confiscation Order and Penalties:The Tribunal also addressed the confiscation order and penalties imposed on the Appellant. Given the findings on classification and the non-applicability of the GCR, the Tribunal found no grounds for confiscation or penalties. It was noted that there was no mis-declaration or intent to evade duty by the Appellant. Consequently, the penalties imposed were set aside, and the confiscation order was deemed unsustainable.Conclusion:The Tribunal concluded by setting aside the impugned order, allowing the appeal, and granting consequential relief to the Appellant. The goods were rightly classifiable under CTH 90189099, and the demands and penalties based on reclassification and alleged violations of the GCR were not upheld. The appeal was allowed with relief as per law.