The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that Sonalleve HIFU KIT is accessory to MRI and hence is eligible for customs duty exemption.
A Show Cause Notice dated 04.06.2012 was issued alleging wrong availment of benefit of Notification 021/2002- Cus. at serial no.357B (ii), alleging that the imported goods are not accessories. After due process of law, the original authority passed the impugned order denying the exemption of BCD as per Notification No. 21/2002 and also exemption of CVD under Notification 06/2006 at serial no. 59 (i). The differential duty demand was confirmed along with interest. No penalties were imposed. Aggrieved by such order the appellant is now before Tribunal.
The Counsel T. Viswanathan, appeared and argued for the appellant. It was submitted that the subject goods are accessories of MRI machines and that the Apex court in a plethora of decisions has held that the word accessory is used to describe goods which may have been manufactured for use as an aid or addition; Thus goods when used to aid the function are add to the function of a machine would fall under the category of accessory. The imported items are recognised as accessories to machines.
It was submitted by learned counsel that though the department has denied the eligibility to concessional rate of CVD, under the Notification No. 6/2006, the department has not disputed the classification adopted by the appellant. The subject goods were classified under CTI 9018 13 00 by the appellant. The said heading refers to MRI apparatus. The appellant had adopted the said classification by applying Note 2 (b) to Chapter 90. As per Note 2 (b) to Chapter 90 the parts and accessories of goods of Chapter 90 if suitable for use solely or principally with the particular kind of machine, are to be classified with the machines, instruments or apparatus of that kind.
N. Sathyanarayanan appeared and argued for the department. The findings in the impugned order was reiterated. It is submitted that the original authority discussed in para 10 the functioning of the subject goods and correctly concluded that the subject good is a full-fledged apparatus in itself and it is not an accessory to a MRI machine.
A Two-Member Bench comprising Vasa Seshagiri Rao, Technical Member and Sulekha Beevi CS, Judicial Member observed that “After understanding the function of the impugned goods and following the decisions above we hold that the Sonalleve HIFU KIT classified under CTH 9018 13 00 is an accessory to MRI. The goods are eligible for benefit of Notification of 21/2002 – Cus at Sl.No.357B (ii) and benefit of Notification of 6/2006 – CE at Sl. No. 59 (i).”
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