TaxTMI 
TaxTMI 
2025 (7) TMI 1346
X X X X Extracts X X X X
X X X X Extracts X X X X
....2.2. The appellants herein is engaged in the business of supplying orthopaedic and medical appliances, implants which are used for knee, hip replacement surgeries; implants for repair of joints, shoulder and various other parts of the body; repair of soft tissue injuries and degenerative conditions of the shoulder, knee, hip and small joints. For this purpose the appellants have inter alia, imported and supplied knee, hip implants such as 'Screw Biosure, Regenesorb, Legion etc.," by classifying the same under Customs Tariff Item (CTI) 9021 3100 and 'Bioraptor, Ultratape Suture etc.,' under CTI 9021 1000 of the First Schedule to the Customs Tariff Act, 1975, both as 'orthopaedic or fracture appliances, artificial joints' claiming customs duty exemption benefits vide Serial No.578 of the Notification No.50/2017-Customs dated 30.06.2017 [List 30, Sl. No. E(9)] read with Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017 [Serial No.257 of Schedule-I, List 3, Sl. No. E(9)]. The appellants have also filed various Bills of Entries from time to time covering import of the above goods by claiming customs duty concessions during the disputed period from 01.04.2018 to 31.01.2023, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y by e-filing their petition on 24.06.2024. After hearing the parties, the Hon'ble High Court had disposed of the matter vide order dated 10.09.2024 in the following manner, the extract of which is given below: "1. After the petition was heard, keeping open the rights and contentions of the parties, the following order is passed:- (a) Petitioner would file an appeal challenging Order-in-Original within four weeks from today. (b) If the appeal is so filed within four weeks from today, the delay, if any, in filing appeal shall be considered to have been condoned. (c) In view of the recurring nature of this issue, the Tribunal is requested to dispose the appeal as early as possible preferably on or before 31st December, 2024...." Further, the Hon'ble High Court had directed the Department for clearance of Bill of Entry No. 3168173 dated 23.04.2024 and the future imports under provisional assessment subject to usual terms and conditions in accordance with the law, upon considering the fact that the appellants had been importing and clearing the goods under classification 9021 since 2012, and that such imported goods are not prohibited. 2.6 When....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Order passed by this Court. In other words, the date of the 31st December, 2024 is not sacrosanct after which the Tribunal cannot act. 4. Be that as it may, if this is the confusion in mind of the Tribunal, we request the Tribunal to dispose of the Appeal as early as possible and preferably by 31st March, 2025" 2.8 On the basis of the aforesaid clarificatory order issued by the Hon'ble High Court of Bombay, we had taken up this case for hearing and disposal of the appeal filed before this Tribunal. 3.1 Learned Advocate appearing for the appellants had submitted as per plain language of the exemption entry provided in the notification No. 50/ 2017-Customs dated 30.06.2017 (Sl. No.578) read with List 30, and Notification No.01/ 2017-Integrated Tax (Rate) dated 28.06.2017 (Serial No.257) of Schedule-I, List 3, any goods forming part of 'List 30/List3' appended to such notification(s) would get covered by the scope of the said duty exemption. As per the said exemption entry, three distinct categories of goods i.e., (i) assistive devices, (ii) rehabilitation aids, (iii) devices for the disabled, are covered. Further, the list of goods which are eligible for exemption hav....
X X X X Extracts X X X X
X X X X Extracts X X X X
....evidentially proved and therefore they are eligible to claim the customs duty exemption and CVD exemption. 3.4 He further submitted that the adjudicating authority had incorrectly assumed that the crux of the issue in extending the exemption is meaning of the term 'disabled' and that goods not for disabled, should not be entitled to any customs duty exemption. He also stated that in case the government wanted to include all the items under List 31 only for the use of 'disabled' as held by the adjudicating authority, then the description provided in the exemption in the could be 'goods for disabled' and not the three distinct categories of goods mentioned therein. He further submitted that by providing list of goods which are eligible for exemption under List 30/List3, the relevant issue is to examine whether the imported goods are covered by any of the category of goods itemized in such list for extending the customs duty exemption. The definition for the term 'disability' given in other acts viz., Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation), 1995; Rights of Persons with Disabilities Act, 2016 cannot be relied upon for deciding on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tional submissions made in the form of written paper books in this case by both sides were also perused carefully. 6. The short issue for determination before the Tribunal is that, in the facts and circumstances of the present case,_ (i) whether the impugned goods imported by the appellants during the period 01.04.2018 to 31.01.2023, are eligible for exemption from payment of Customs duty vide Serial No. 578 of the Notification No.50/2017-Customs dated 30.06.2017 [List 30, Sl. No. B(1), E(9)] read with Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017 [Serial No.257 of Schedule-I, List 3, Sl. No. B(1), E(9)] or Otherwise? (ii) whether imposition of redemption of fine and penalty on the appellants, under Sections 125(1) and 114A ibid is legally sustainable or not? 7. In order to appreciate the issues under dispute, the specific legal provisions of the Customs Act, 1962; and the relevant exemption entries of the exemption notifications relating to the dispute are extracted and herein given below for ease of reference: Customs Act, 1962 Power to grant exemption from duty. Section 25. (1) If the Central Government is satis....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Notification No. 50/2017-Customs New Delhi, the 30th June, 2017 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and sub-section (12) of section 3, of Customs Tariff Act, 1975 (51 of 1975), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012 -Customs, dated the 17" March, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 185 (E) dated the 17" March, 2017, except as respects things done or omitted to be done before such supersession, the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (3) of the Table below or column (3) of the said Table read with the relevant List appended hereto, as the case may be, and falling within the Chapter, heading, sub-heading or tariff item of the First Schedule to the said Customs Tariff Act, as are specified in the corresponding entry in column (2) of the said Table, when imported into India,- (a) from so m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s like the Taylor Frame (arithmetic and algebra types), Cubarythm, Speaking or Braille calculator (6) Geometrical aids like combined Graph and Mathematical Demonstration Board, Braille Protractors, Scales, Compasses and Spar Wheels (7) Electronic measuring equipment, such as calipers, micrometers, comparators, gauges, gauge blocks Levels, Rules, Rulers and Yardsticks (8) Drafting, Drawing aids, tactile displays (9) Specially adapted clocks and watches B. (1) Orthopaedic appliances falling under heading No.90.21 of the First Schedule (2) Wheel chairs falling under heading No. 87.13 of the First Schedule C. Artificial electronic larynx and spares thereof D. Artificial electronic ear (Cochlear implant) E. (1) Talking books (in the form of cassettes, discs or other sound reproductions) and large- print books, braille embossers, talking calculators, talking thermometers (2) Equipment for the mechanical or the computerized production of braille and recorded material such as braille computer terminals and displays, electronic braille, transfer and pressing machines and stereo typing machines ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter Assistive devices, rehabilitation aids and other goods for disabled, specified in List 3 appended to this Schedule xxx xxx xxx List 3 [See S. No. 257 of the Schedule I] (A) (1) Braille writers and braille writing instruments (2) Hand writing equipment Braille Frames, Slates, Writing Guides, Script Writing Guides, Styli, Braille Erasers (3) Canes, Electronic aids like the Sonic Guide (4) Optical, Environmental Sensors (5) Arithmetic aids like the Taylor Frame (arithmetic and algebra types), Cubarythm, Speaking or Braille calculator (6) Geometrical aids like combined Graph and Mathematical Demonstration Board, Braille Protractors, Scales, Compasses and Spar Wheels (7) Electronic measuring equipment, such as calipers, micrometers, comparators, gauges, gauge blocks Levels, Rules, Rulers and Yardsticks (8) Drafting, Drawing aids, tactile displays (9) Specially adapted clocks and watches (B) (1) Orthopaedic appliances falling under heading No.90.21 of the First Schedule (2) Wheel chairs falling under heading No. 87.13 of the First Schedule (3) Retr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd hence for the sake of brevity I restrain from reproducing the same. 75. On going through the facts of the case and submission by noticee, I find that it has not been disputed by the noticee that the imported impugned goods have been used for the treatment of injured persons. 76. Hence, having the facts on hand that the impugned goods have been used for treatment of injured person I find that it is very crucial to decide whether the term "disabled" and the term 'injured' are one and the same or not. I would like to discuss whether Injury and disability are same or different. I find that while the terms "disability" and "injured" can sometimes overlap in certain contexts, they generally refer to different concepts. "Injured" typically refers to a temporary state resulting from physical harm or trauma. It suggests a condition that is expected to improve with time and appropriate medical treatment. For example, someone might be injured in a car accident and need time to recover before returning to their normal activities. On the other hand, "disability" often refers to a more permanent or long-term condition that impairs one or more aspects of a person'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mporter has also not developed any mechanism to keep a record detailing the list of orthopaedic implants used by a disabled person and other than disabled person. In absence of such bifurcation, I do not find any merits in extending the notification benefits. 86...... I find that that the imported implants can be used by any injured person and are not intended for disabled. Accordingly, I hold that the Exemption Benefit of Notfn No 50/2017-Cus dated 30.06.2017 at Sr No 578 is not available to the impugned goods and the impugned goods attract merit rate of duty as proposed in the SCN/Accordingly I hold that differential duty demand of Basic Customs Rs. 135,66,08,237/-, Health Cess amounting to Rs.46,64,87,203/-, Social Duty Welfare Surcharge amounting to Rs18.23,09,544/as elaborated under para 72 of the SCN is liable to be confirmed. 87. As regards IGST, having established that the impugned goods were not meant/utilised for disabled person, I find that IGST @5% under Sl no 257 of Schedule 1 of the Notfn No 01/2017 IGST was not available to the impugned goods as Sl No 257 of Schedule I was meant for disabled only. I also find that from the description of goods menti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stoms duty specifically applicable under circumstances of exceptional nature to be specified therein, the Central Government has also powers for issue of ad- hoc duty exemption by way of issue of special order, which are of provided by extant guidelines as limited to goods, which are of secret or strategic nature or are meant for being used for charitable purposes. Such exemptions are called 'Ad-hoc exemption' and the Government has prescribed the specific guidelines for examining such ad-hoc exemption requests and even when such ad-hoc exemption is issued, these are subjected to the conditions that the imported goods will not be put to any commercial use and will not be sold, gifted or parted by the importer in any manner without the prior permission of the Central Board of Indirect Taxes & Customs (CBIC). It is a fact on record that the notifications under which exemption is claimed and in which the department had raised the dispute had been issued under Section 25(1) ibid. Therefore, it transpires that the exemption is applicable subject to the conditions, if any, specified in the said notifications and is not subjected to any general conditions of ad-hoc exemption issued under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le classifying goods, the foremost consideration is the 'statutory definition', if any, provided in the Customs Tariff Act. In the absence of any statutory definition, explanation or any guideline provided by HS explanatory notes or customs tariff or in the notification, the trade parlance theory is to be adopted for ascertaining as to how the goods are known in the common trade parlance for the purpose of dealing between the parties. 9.3 In the impugned order learned Commissioner of Customs had stated that the crux of the issue is to decide the scope of the term "disabled" used in the exemption entry in the Notification No. 50/2017-Customs (supra). For this, he had referred to the Department's contention elaborated in the SCN on the basis of detailed investigation, to state that in respect of the said exemption entry the issue is to decide whether the goods covered under Serial No.578 should be read in order to cover the following at (i), (ii) and (iii) only or otherwise: (i) assistive devices for disabled; (ii) Rehabilitation aids and other goods for disabled; (iii) implants was severely physically handicapped patients and joints ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n. Accordingly, the exemption should be restricted only to those goods which would fall under the tariff references specified in the Notification. In the present case before us, there is no dispute in respect of the Chapter/ Heading/ Sub-heading/ Tariff item mentioned in the Notification, as the goods covered could be classifiable under 'Chapter 90 or Any Other Chapter(s)'. In other words, classification under any Chapter would not restrict the exemption. Therefore, the dispute lies in the narrow compass of analysing the scope of coverage of goods in terms of 'description of goods' provided under column (3) of the notification. 9.5 In order to examine the above, we have carefully perused the entire exemption Notification No. 50/2017-Customs (supra) and specifically at entry at Serial No.578 of Notification No. 50/2017-Customs (supra) and the similar entry at Serial No.257 of Notification No.01/2017-Integrated Tax (Rate) [supra]. Firstly, it is seen that in respect of the present entry in dispute, exemption has been given for the goods of the description specified in column (3) of the Table, read with the List-30 appended thereto, and falling within the specified Chapter of the F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oods specified in List 27, designed for use in the leather industry or the footwear industry 578. 90 or any other Chapter Assistive devices, rehabilitation aids and other goods for disabled, specified in List 30 (i) In respect of Serial No. 39, by means of an expression "all goods", it transpires that goods of any kind which can be classified under specified Chapter Heading No. 1007; Sub-heading Nos. 1008 21, 1008 29; Tariff Item No. 1005 1000 are eligible for exemption under the said notification. Here the scope of coverage of goods is wide by description, but specific in terms of Chapter Heading/Sub-heading/Tariff item. (ii) Serial No. 174, the expression used for the goods is specific as 'iodine' and covered under single tariff item, and thus the scope of coverage of goods is specific and limited/restricted. (iii) In Serial No. 59 & 126, the description of the goods given as 'vegetable oils of edible grade' though have wide scope by coverage in general, however only when such goods meet BIS standard specified therein or when they fit within the meaning given in the explanation clause i.e., in terms of specified percentage o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assistive devices/rehabilitation aids for disabled'; Therefore, proper construction of the description under column (3) for the exemption entries at Serial No. 578/Serial No.257 would be (i) assistive devices covered under Chapter 90 or any other chapter; (ii) rehabilitation aids covered under Chapter 90 or any other chapter; (iii) other goods for disabled which are specified under List-30 covered under Chapter 90 or any other chapter. Thus, it would appear that the punctuation mark 'comma' in the exemption entry under Serial No. 578 of the Notification No. 50/2017- Customs (supra) and similarly for Serial No.257 of the Notification No. 01/ 2017-Integrated Tax (Rate) [supra], having been used to carefully specify the scope of coverage of goods under specific three categories of goods, though it may be a minor element, should be resorted to for arriving at a correct understanding on the scope of goods covered under the exemption. Further, the use of the word 'disabled' have to be understood in its plain grammatical meaning. The meaning of the word 'disabled' cannot be understood differently by restricting the meaning given under Section 2(s) of The Rights of Persons with Disabiliti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r alia cover Orthopaedic appliances falling under heading No.90.21 of the First Schedule in (B)(1); Instruments and implants for severely physically handicapped patients and joints replacement and spinal instruments and implants including bone cement in (E)(9). Since, the implants such as repair of knee, hip and other joints, shoulder and various other parts of the body; repair of soft tissue injuries and degenerative conditions of the shoulder etc., are in the nature of instruments/implants described in item (B)(1), the impugned goods are also specifically covered under the List-30 and List-3 of the notifications No. 50/2017-Customs and No.01/2017-Integrated Tax (Rate) [supra]. Further, in terms of Note 6 to Chapter 90 of the First Schedule to the Customs Tariff, the meaning of 'orthopaedic appliances' has been given in the First Schedule to the Customs Tariff Act, 1975 as extracted below: "6. For the purpose of heading 9021, the expression "orthopaedic appliances" means appliances for: (i) preventing or correcting bodily deformities; or (ii) supporting or holding parts of the body following an illness, operation or injury. Orthopedic appliances inclu....