Exemption for dialysis fluids upheld where essential, life-saving character satisfied alternative notification limb.

Dialysis fluids Naturalyte and Erilyte were held not to be standard accessories of a dialyser because they were consumable fluids, not equipment fitted to the machine. Exemption was nevertheless available under the life-saving goods limb of Notification No. 208/81-Cus., because the DGHS certificate established that the fluids were essential for dialysis and had a life-saving character. The appellate authority was entitled to consider this alternative basis even though it had not been raised before the original authority. Exemption was therefore extended under part C, with consequential relief.

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Issues: Whether the dialysis fluids Naturalyte and Erilyte were entitled to exemption under Notification No. 208/81-Cus. as standard accessories of the dialyser, or alternatively as life-saving goods covered by part C of the notification.

Analysis: The fluids were not accessories within the ordinary meaning of that expression, since they were consumable fluids and not an attachment or equipment fitted to the main machine. However, the Court accepted the alternative claim because the DGHS certificate established that the fluids were essential for carrying out dialysis and had a life-saving character. The objection that this ground had not been raised before the original authority was rejected, since the appellate authority was bound to examine the claim once raised in appeal.

Conclusion: The fluids were not covered as standard accessories under part B, but they were entitled to exemption under part C of Notification No. 208/81-Cus. The appeal succeeded and the assessee was granted the exemption with consequential relief.

Final Conclusion: The exemption benefit was ultimately extended to the dialysis fluids on the basis of their essential and life-saving character.

Ratio Decidendi: Where a goods description in an exemption notification is not satisfied under one limb, the benefit may still be available under another applicable limb if the evidence establishes the prescribed essentiality or life-saving character.

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