2026 (1) TMI 1020 - AT - Customs

Oxygen concentrator classification as apparatus for therapeutic respiration affirmed, allowing exemption and setting aside restrictive order

Interpretation of a tariff notification concerning exemption for 'apparatus for artificial respiration or other therapeutic respiration' was addressed by ... Interpretation of scope of exempted description 'apparatus for artificial respiration or other therapeutic respiration' (ventilators) - Eligibility of 'oxygen concentrator' for exemption under notification - Appellate duty to obtain/supplement speaking order and compliance with assessing officer's obligations - Doctrine of merger of appellate order with speaking order - Holistic reading of notification and cross-column interpretation - HELD THAT:- ‘Oxygen concentrator’ is an apparatus that, in a manner of speaking, pedestrianized ‘respirators’ by substituting the compressed and bottled ‘oxygen’ with perennial source of ‘clean oxygen’; the convenience of the former for public health institutions in administrative aspects, such as accountal, storage and patient billing, is no cause for linking source of oxygen with delivery system as prophylactic, palliative or therapeutic. Both from physiological perspective and from the descriptions in the First Schedule to Customs Tariff Act, 1975 can it hardly be averred that source of supply of oxygen determines ‘apparatus for artificial respiration or therapeutic respiration’ to affirm that constricted view in the impugned order. Had it been the intent of government to isolate ‘respiratory apparatus’ – for artificial respiration or for therapeutic respiration –to ‘ventilators’, the common parlance usage did not merit parenthetical exposition as posited by representative and delegate of Revenue in support of their stand. Every person concerned would not be unaware that ‘ventilator’ is apparatus for assisted breathing and parenthetical emphasis nothing but superfluous. There was no call for the policy formulators to dally with a generic description when the specific was the answer to the intent canvassed by the lower authorities. Not only does technology evolve but the history of human resourcefulness also chronicles invention as the offspring of necessity. Not only the shortage of ‘ventilator’ as specific apparatus much in need at public health care facilities– existing as well as proposed – but also, confronted with ‘end of times’, policy formulators may have been influenced and inspired to adopt description covering technologies of past, present and potential in one phrase and deployment of ‘ventilator’, for ensuring that no confusion, from lack of particularity in specially crafted concatenation of words, remained about the then presently known apparatus, is not to be inferred, particularly from subordination of parenthetical framing, as legislative intent to restrict. We find no reason to interpret the broad framework of description in the notification as restricted to only the parenthetical emplacement. No evidence has been put forth in support of the only ground for denial of exemption, viz., not being apparatus for therapeutic respiration, that is touted as essence of eligibility. Thus, the impugned order has erred in restricting the benefit of notification only to ‘ventilator’ and, owing to which, we have no hesitation in setting aside the impugned order to allow the appeal. Issues: Whether an 'oxygen concentrator' falls within the scope of 'artificial respiration or other therapeutic respiration apparatus (ventilators)' for entitlement to exemption under Notification No. 20/2020-Cus dated 09.04.2020.Analysis: The notification must be read holistically across its columns and in the context of the relevant tariff heading and General Rules for Interpretation of the Import Tariff. The question turns on scope of the broad descriptive phrase 'apparatus for artificial respiration or therapeutic respiration' and the effect, if any, of the parenthetical reference to 'ventilators'. The obligation under section 17(5) of the Customs Act, 1962 to provide reasons when denying exemption was not satisfied by the assessing authority, and the appellate order relied unduly on subsequent notifications and contemporaneous press material to narrow the earlier notification. Technical distinctions based on source of oxygen do not, by themselves, exclude apparatus that perform the described respiratory function. Where a notification is designed for urgent public relief, a broad construction of the descriptive phrase to cover apparatus performing the stated function is appropriate.Conclusion: An 'oxygen concentrator' falls within the scope of 'artificial respiration or other therapeutic respiration apparatus (ventilators)' in Notification No. 20/2020-Cus dated 09.04.2020, and the impugned order restricting exemption to only 'ventilators' is set aside; the appeal is allowed.