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Case Law Details

Case Name : In re Edifice Medical Technologies (CAAR Mumbai)
Appeal Number : CAAR/MUM/ARC/29 & 30/2024
Date of Judgement/Order : 27/02/2024
Related Assessment Year :

In re Edifice Medical Technologies (CAAR Mumbai)

Introduction: The Customs Authority for Advance Rulings (CAAR) in Mumbai recently delivered a comprehensive ruling regarding the classification of Operation Theatre Lights imported by Edifice Medical Technologies. This case has drawn significant attention due to its implications on import tariffs and the medical equipment industry. The ruling provides a detailed analysis of the classification under the Customs Tariff Act, pitting the specialized medical equipment against general lighting apparatus classifications.

Detailed Analysis: Edifice Medical Technologies sought an advance ruling on the classification of Operation Theatre Lights imported for medical purposes. The debate centered around whether these lights, equipped with advanced features such as adjustable color temperature and minimal shadow casting, should be classified under Customs Tariff Heading (CTH) 9018, which pertains to medical, surgical, dental, or veterinary instruments, or under CTH 9405, generally covering lighting fixtures and lamps.

The CAAR Mumbai meticulously examined the features and intended use of the Operation Theatre Lights, as presented by Edifice Medical Technologies. The applicant provided substantial evidence, including catalogs and case laws, to support the classification under CTH 9018. The ruling referenced various legal precedents and the detailed functionality of the lights, emphasizing their specialization for medical use over general lighting purposes.

The opposition, including the Joint Commissioner of Customs, Nhava Sheva-V, argued for classification under CTH 9405, suggesting that the lights, being LED-based and capable of general illumination, did not exclusively serve medical purposes. This perspective was challenged by the detailed submission from Edifice Medical, which highlighted the specialized medical applications of the Operation Theatre Lights.

Conclusion: The CAAR Mumbai’s ruling in favor of classifying the Operation Theatre Lights under CTH 9018 underscores the importance of intended use and specialized features in determining the classification of imported goods. This decision not only clarifies the tariff classification for Edifice Medical Technologies but also sets a precedent for the classification of similar medical equipment. The ruling illustrates the complexity of customs classifications and the necessity for detailed analysis and evidence in advancing such cases. Importers and manufacturers in the medical equipment sector can draw valuable insights from this ruling for future classifications and imports.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI

M/s. Edifice Medical Technologies (having IEC No. AAKE0779R and hereinafter referred to as ‘the applicant’, in short) filed two applications (CAAR- I) for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR in short). The said applications were received in the secretariat of the CAAR, Mumbai On 13/07/2023 along with enclosures in terms of Section 281-1 (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’ also). The applicant is seeking advance ruling on the classification of “Operation Theatre Lights” for imports through the port of Nhava Sheva and Air Cargo Complex, Mumbai.

Operation Theatre Lights' merit classification under CTH 9018 CAAR Mumbai

2. Applicant submitted that they are currently importing and continue to import in future the consignments of operation theatre lights from Germany and other countries. The goods are described in invoice as Surgical Operation Theatre Lights with Standard Accessories OR as Operation Theatre Lights. They are classifying the goods under Customs Tariff (leading No 90189099 on the ground that the goods are specialized shadow less lights exclusively designed for use in operation theatres. The applicant has submitted a catalogue of the subject goods which throws light on the special features of the models of these Operation Theatre Lights and these are mainly as follows:

The surgeon can set the color temperature according to the tissue structure, the surgical application and individual color sensitivity. This way the surgeon avoids tiredness during work: for instance, dazzling effects can be avoided. On the other hand, it is possible to increase the contrast by using higher color temperatures, which supports the surgeon’s power of concentration. The composed light leaves the optical system as white light and is dispersed over the wound field homogeneously. Color shadows in the light beam of the Operation Theatre light caused by the surgeon’s head, shoulder or hands are avoided by the color composition in the optical system. The explanation in the Catalogue shows clearly that these Operation Theatre lights are not mere lamps used anywhere for lighting purposes but are highly specialized, high-technology products meant exclusively for operation theatres only. The color of the light and the temperature of the light can be adjusted to the needs of the surgeon and the nature of the tissues to be operated on. The arrangement of the lights and the chips ensure that there is no shadow and even the fatigue likely to be experienced by the surgeon is minimized by the combination of light and temperature. In short, these are very high-tech appliances designed exclusively for operation theatres to enable the surgeons to perform operation and surgical procedures.

3. The applicant submitted that under the Explanatory Notes to Heading 9018 under the Section titled, “Instruments and Appliances for human medicine or Surgery”, under sub­section (C), a list of “Other Medical Apparatus” has been given. In this list, item (R) gives the following inclusion:

“(R) Lamps which arc specially designed for diagnostic, probing, irradiation etc. purposes. Torches such as those in the shape of pen are excluded (heading 85.13) as are other lamps which are not clearly identifiable for medical or surgical use (heading 94.05

From the above, it is clear that lamps which are included under CTH 9018 are those:

1. Specially designed for medical purposes;

2. Clearly identifiable as for medical or surgical use.

From the description in the catalogue and as explained above, it is clear that these lights are specially designed for medical purposes and are used only for medical purposes for carrying out surgeries in Operation Theatres. They are clearly identifiable as for surgical use from the design and the features. Heading 9018 states “Instruments and appliances used in medical, surgical, dental or veterinary sciences”, there is no doubt that these imported lights are “used in” operation theatre. These lights cannot be used at any other place for lighting. Thus, it is crystal clear that the imported goods arc “used in Medical Sciences” and hence correctly classifiable under CTH 9018 9099. There are no definitions of the terms like “surgical Instrument” and “Surgical Appliance” in the Explanatory Notes but they list out a number of instruments which are actually used in surgery. From the Explanatory Notes, it is clear that the coverage of Heading No 9018 is not confined to specific instruments and appliances but includes many instruments and appliances used in medical and surgical fields. Among the list of items included in this heading are general purpose items like “mirrors and reflectors” for examination of ear, eye, larynx etc., “scissors”, face masks, face-piece harness (anesthetic apparatus). These general purpose instruments are classified under this heading on the basis of their design and their identity as for medical use.

The applicant has cited Hon’ble CESTAT Order in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-II versus COGNATE INDIA 2017 (345) E.L.T. 122 (Tri. ­Del.)

Medical equipment – Operation Theatre Lights – Classification of – These specialized lamps having shadow less operation, heat defusing capacity and colour correction capabilities especially designed to be used in operation theatres classifiable under sub­heading 9018.00 of Central Excise Tariff as medical equipment and not under heading 9405 ibid as search lights/spot lights not elsewhere specified. [paras 3, 4, 5, 6]

Medical equipment – Operation Theatre Lights – Exemption under Notification No. 10/2003-C.E., dated 1-3-2003 – These equipment being classifiable under sub-heading 9018.00 of Central Excise Tariff eligible to exemption under Notification No. 10/2003-C.E. paras 1, 3, 4, 5, 6]

The applicant has also relied upon the Hon’ble CESTAT Order in the case of WESTFORT HI-TECH HOSPITAL LTD. Versus COMMISSIONER OF CUSTOMS, COCHIN 2006 (204) E.L.T. 113 (Tri. – Bang.)

Lamps – Hospital operation theatre lamps specifically designed for operation theatre – Any surgery or operation will either have a curative or preventive purpose – Such lights can be considered as appliances coming under sub-heading 9018.19 of Customs Tariff Act, 1975 and not classifiable under sub-heading 8539.39 ibid. – The technical literature produced highlights the special features of the impugned product. There is minimum shadow formation and optimized depth of illumination. The light radiates from the rim of the light head and potential areas of shadow are brightened. As a result of the above design, the light is homogeneous and arrangement of filters for infrared radiation limits the temperature increase to only 2°C. The suspension is designed in such a manner that light heads can be positioned with the touch of the hand and without restriction. The shape of the light head is aerodynamic and its concave underside restricts any turbulence that may occur to the area immediately below the light head. [paras 6, 6.1]

“The Supreme Court Bench on 1-10-2015 dismissed the Civil Appeal No. 2736 of 2007 filed by Commissioner of Customs, Cochin against the CESTAT Final Order No. 1189/2006, dated 14-7-2006 as reported in 2006 (204) E.L.T. 113 (Tri.-Bang.) (West fort Hi-Tech’ Hospital Ltd. v. Commissioner). While dismissing the appeal, the Supreme Court passed the following order:

“Since the tax effect involved in the instant appeal is negligible, leaving the question of law open, the appeal is dismissed on this ground alone.”

The Appellate Tribunal in its impugned order had held that ‘Hospital Operation Theatre Lamps’ are classifiable under sub-heading 9018.19 of Customs Tariff Act, 1975 as ‘other electro medical apparatus’ and not under sub-heading 8539.39 ibid as ‘other discharge lamp’.

From the above, it is clear that the items examined in these orders were the same items, namely, operation theatre lights with special features to get light without shadow. The Tribunal categorically held that these lights are classifiable under CTH 9018 and the order in respect of West fort Hospitals was upheld by the Honourable Supreme Court.

4.1 The Joint Commissioner of Customs on behalf of Nhava Sheva-V which is the concerned jurisdictional Customs Commissionerate has responded to the subject application vide a letter dated 29.08.2023 and has submitted that on going through the submission and catalogue of the applicant, it is noticed that the goods are LED light fitted in movable stand and in respect of the nature of the goods, it appears to be classified under 9405, in terms of heading 9405 which covers in particular (i) Lamps and lighting fittings normally used for the illumination of rooms (ii) Lamps for exterior lighting e. g. street lamps, porch lamps (iii) Specialized lamps e. g darkroom lamps, photographic studio lamps, inspection lamps (iv) Lamps and lighting fittings for the vehicles of Chapter 86 for aircraft or for ships, boats, e. g headlamps for trains, headlamps for aircraft (v) Portable lamps (other than those of heading 8513) e. g. hurricane lamps, hand lanterns (vi) Candelabra, candlesticks, candle brackets e. g. for pianos. Specialized lamps e.g. darkroom lamps, inspection lamps should be classified under 9405, the goods under consideration appears to be similar in nature and is to be categorized as specialized lamps or inspection lamps which are comprising of LED lights.

From the Explanatory Notes of Harmonized system of 90.18 under the section titled “Instrument and appliances for human medicine or surgery” where it has been mentioned that “Lamp which arc specially designed for diagnostic, probing , irradiation , etc. purposes, torches such as those in the shape of a pen are excluded (heading 8513) as arc other lamps which are not clearly identifiable as being for medical or surgical use (heading 94 05)”, it is noted that the lamp of this heading are specially designed for diagnosis, probing, irradiation, etc. purposes which means that a lamp can be used only while checking, probing and diagnostic purposes and it cannot be used for getting light source, however, goods in question are made of led lights, fitted in ceiling which are used for getting lights source.

The applicant has also cited a case law of the Honourable Tribunal in the case of West Fort Hi-Tech Hospital Ltd. vs. Commissioner of Customs, Cochin, where tribunal pronounced the judgment in the favour of party and considering the fact, department filed an appeal to the Hon’ble Supreme Court where the Hon’ble Supreme Court held that “Since the tax effect involved in the instant appeal is negligible, leaving the question of law open, the appeal is dismissed on this ground alone.” It is noted that Tribunal order was upheld by the Hon’ble Supreme Court on the monetary ground and question of law is still open. In view of the above, the goods viz. operation theatre light appears to merit classification under heading 9405. However, the Hon’ble Customs Authority for Advance Rulings may decide the case on its merit.

4.2 Air Cargo Complex, Andheri (E), Mumbai which is another concerned jurisdictional Customs Commissionerate has responded to the subject application vide letter dated 30.09.2023 and has submitted that M/s Edifice Medical Technologies is importing goods in India and has been actively importing Mach LED which is used in Operation Theatre and that it appears to be eligible for filing this application under Section 2811 of Customs Act, 1962. Said importer is a reputed distributer of Surgical Instruments. Hence the nature of activity as claimed by Importer in Sr. No. 6 of CAAR-1 appears fair and as per available records no case has been found w.r.t classification of the subject goods (Operation Theatre Light).

However, it is worth mentioning that said Commissionerate has not submitted comments on the issue of classification of the subject goods.

5. Further, the applicant rebutting the comments of Nhava Sheva-V, JNCI I has submitted that these comments suggesting classification of “Operation Theatre Light System” under CTH 9405 cannot stand any legal scrutiny. It is evident from the catalogue of the product that the impugned goods arc not mere LED lamps as claimed by Nhava Sheva-V but arc highly specialized high technology products meant exclusively for operation theatres. Colour and temperature of the light can be adjusted to the needs of the surgeon which helps the surgeon to find the optimal position of the OT light to the wound field. Sub-Group (R) covers lamps which are specially designed for diagnostic, probing, irradiation etc. purposes. Applicant states that as per the said HSN Note, this sub-group (R) excludes lamps which are not clearly identifiable as being for medical or surgical use. Applicant submits that as per the catalogue, the use of the impugned goods viz. “operation theatre Lights system” is clearly in the field of surgery and hence the appropriate classification of the goods would be under CTH 9018 and not 9405 as suggested by the Joint Commissioner of Customs, NS-V in their letter dated 29.08.2023. Further, it could be seen from the USN Note to Chapter 9405 that medical diagnostic, probing, irradiation etc. lamps are excluded from the purview of CTH 9405 and the same are covered by CTH 9018. Conjoint reading of above would clearly establish that the Operation Theatre lights are used for surgery in hospitals and as such, the same are excluded from the purview of CTH 9405.

The Applicant submitted that the Joint Commissioner, NS-V Customs Commissionerate has failed to appreciate that the decision of the Mon. CESTAT in the case of Westford Hitech Hospital Ltd vs. Commissioner of Customs, Cochin reported in 2006(204) ELT 113(Tri-Bang) which held that the operation theatre lamps would fall under CTH 9018, has neither been stayed nor set aside by the Hon’ble Supreme Court. As such, following the principles of judicial discipline, he ought to have concurred with the classification of goods under CTH 9018 instead of staying vague. Joint Commissioner ought to have borne in mind that as a quasi-judicial authority, he is bound by the binding principles of judicial discipline as highlighted in the order of Hon’ble Supreme Court in the case of Union of India vs. Kamlakshi Finance Corporation Ltd reported in 1991(55) ELT 433(SC). Applicant further states that this decision was followed by the Hon’ble CESTAT Delhi in the case of Commissioner of Central Excise Delhi-II vs. Cognate India reported in 2017(345) ELT 122(Tri-Delhi), by and under which, the classification of Operation Theatre lights was held to be under the CM 9018.

6. A personal hearing in the matter was conducted on 13.02.2024 in the office of the CAAR, Mumbai. During the personal hearing the authorized representatives of M/s. Edifice Medical Technologies, Shri Girish Nadkarni, Advocate and Shri Bhupendra Gokani reiterated their earlier written submissions made in the applications to CAAR, Mumbai. They submitted a relevant portion of ‘Notice’ dated 13.09.2020 issued by Govt. of India, Director General of Health Services (Medical Device Division) and contended that the subject import goods i.e. ‘Operation Theatre Light’ merit classification under CTH 90189099. In support of their claim the said representatives also reiterated reliance on two case laws viz. CCE Delhi II vs. Cognate India 2017 (345) E.L.T. 122 (Tri.-Del) and West fort Hi-tech Hospital Ltd. vs. CC, Cochin 2006 (204) E.L.T. 113 (Tri.-Bang.).

Nobody appeared from the concerned Jurisdictional Customs Commissionerate i.e. Nhava Sheva-V, JNCH and Air Cargo Complex, Mumbai during the Personal Hearing either online or in person.

7. I have taken into consideration all the materials placed on record in respect of the subject goods including the submissions made by the applicant during the course of personal hearing. I have gone through the response received from the Nhava Sheva-V and the rebuttal to that filed by the applicant. I therefore proceed to decide the present applications regarding classification of Operation Theatre Lights on the basis of the information on record as well as the existing legal framework having bearing on the classification of the Operation Theatre Lights under the first schedule of the Customs Tariff Act, 1975.

7.1 I have gone through the catalogue of the subject goods issued by Dr. Mach medical lighting + technology and from this it is observed that the subject goods have the advantages of LED technology viz. adjustable light colour (MC models only), a life-span of minimum 40,000 hours and an almost nonexistent heat development in the surgeon’s head area and in the wound field. The advantages already provided by Dr. Mach’s light technology with halogen and gas discharge lamps have been maintained viz. natural colour reproduction, exact illumination of the wound field and easy positioning of the light head. Dr. Mach provides two different LED technologies for its Operation Theatre Light (OT-lights) – one is MC models wherein the use of different coloured LED chips allows the surgeon change , the colour temperature of the OT-light depending on the preference for a more cold-white light or for a warm-white OT-light. The surgeon can set the colour temperature according to the tissue structure, surgical application and individual colour sensitivity. This way tiredness during work, for instance dazzling effects can be avoided. On the other hand it is possible to increase the contrast by using higher colour temperatures, which supports the surgeon’s power of concentration. The other one is SC models equipped with the single-colour chip wherein changing the colour temperature is not possible but all other advantages of LED technology are implemented here, or they can be ordered for surcharge (integrated laser pointer).

Common characteristics of the MC models and SC models-

Facetted multi-lens system: A multitude of computer-calculated facetted lenses guarantees homogeneity and lowest shadiness in the light field. Separately arranged optical systems, each with four LED modules (Multi-Colour models) or each with one LED module (Single-Colour models), generate their own light field, which increases the contrast effect of the OR light. Light intensities of 160.000 Lux can be attained without difficulty.

Superiour colour rendition: With colour rendering indexes 1Z, above 96 and R9 (red) above 90 the surgeon recognizes clearly the tiniest nuances of colour in tissue. The colour rendering index for SC models is Ra = 95. For recognizing the exact colour spectrum of the wound the exact rendition of the red colour range is essential. R9 (red) >= 90 means for the surgeon a visibly better recognition of details. The colour spectrum of the wound is rendered naturally with rich contrast. The OT-light clearly provides welcome relief for your eyes.

Illumination in depth: There is possibility to increase the light intensity of the central segment of the OT-light. This enables an optimum illumination of the wound field according to its texture and the shadowing effects. A high and adequate light intensity is very important especially in cases of narrow and deep wound channels.

Integrated OT-laser pointer (optional): The built-in laser pointer always indicates the middle of the light field and helps the surgeon to find the optimal position of the OT-light to the wound field. The laser pointer can be activated either at the key pad on the lamp housing or by a left-turn of the ring at the sterilisable handle. After a short time the laser pointer turns off automatically.

Key pad on the lamp housing: Several light functions can be adjusted electronically, such as: Switching ON and OFF; Illumination in depth; Laser pointer; Electronic light intensity control; Endo-Light; Changing the colour temperature: 3750, 4000, 4250, 4500, 4750 K.

Flow properties: The flow-enhancing ring form of all light heads (open ring form for the Mach LED 5 models) and the minimal surface avoid any heat increase in the surgeon’s head area and create a perfect laminar flow performance being a basic hygienic requirement in surgery.

Hygiene: The disk sealings of the light outlets and the circumferential sealing cord avoid infiltrations of dust, dirt and liquids inside the lamp head.

Handle: Merging of light fields is done by turning the sterilisable handle. The ring at the top of the handle allows the surgeon to set the most important light functions in the sterile area. The light functions mentioned below can be set at the ring of sterilisable handle:

-Laser pointer (by a lelt-turn of the ring on the top of the handle)

– Changing the colour temperatura (MC models only) or illumination in depth (by a right-turn on the top of the handle).

Cool Light: The LED technology is much more effective than conventional light sources such as halogen bulbs. The heat radiation is reduced to a minimum without using any expensive filter technique. The temperature increase in the surgeon’s head area is almost non-existent.

Dr. Mach already merges the different coloured LED’s by a computer-calculated optical system with light guide and facetted lenses. The composed light leaves the optical system as white light and is dispersed over the wound field homogeneously. Colour shadows in the light beam of the OR light caused by the surgeon’s head, shoulder or hands are avoided by the colour composition in the optical system. The surgeon has the possibility to choose the optimum OR light according to the tissue type and the wound field texture.

Further, some OT-lights are available with integrated video system & monitor and video transmission system with HD/SD Camera.

From the above specifications it is amply clear that the subject goods i.e. Operation Theatre Lights are not to be used as a general purpose light source, because these are specialized goods and as the name suggests these are to be used in operation theatres.

7.2 ‘The applicant has relied upon a Notice dated 13.09.2020 issued by Director General of Health Services, Central Drugs Standard Control Organisation (Medical Device Division) wherein 24 categories of medical device for registration purpose is listed out in annexure-II attached therewith and at Sr. No. 9 of this annexure-II ‘operation theatre’ (OT) is included and further total 27 devices are specified in this category of operation theatre (01′) and at Sr. No. 6 of list of these 27 devices, Surgical Light System: an illuminator device intended for providing optimal light and colour rendering to aid in performing surgery are specified. By virtue of this notice the applicant has argued that Operation Theatre Lights are identified as medical devices by DGHS, CDSCO (Medical Device Division) which are intended for providing optimal light and colour rendering to aid in performing surgery.

7.3 Chapter Note 1(ij) of Chapter 90 mandates that this chapter does not cover Searchlights or spotlights of heading 94.05. From the specifications of the subject goods it is clear that these are not searchlights or spotlight. Further, General Notes to Chapter 90 states that this Chapter covers a wide variety of instruments and apparatus which are, as a rule, characterized by their high finish and high precision. Most of them are used mainly for scientific purposes (laboratory research work, analysis, astronomy, etc.), for specialised technical or industrial purposes (measuring or checking, observation, etc.) or for medical purposes. Heading 9018 covers Instruments and appliances used in medical, surgical, denial or veterinary sciences, including scientigraphic apparatus other electro-medical apparatus and sight-testing instruments. Further, under sub-headings it convers Electro diagnostic apparatus (including apparatus for functional exploratory examinations or for checking physiological parameters), Syringes, needles, catheters, cannulae and the like, Other instruments and appliances, used in dental sciences, Other ophthalmic instruments and appliances. Sub-heading 9018 90 covers Other instruments and appliances, more specifically Stethoscopes, Bone saws, drills and trephines, knives, scissors and blades, forceps, forceps clamps, clips, needle holders, chisel, gauges, elevators, raspatones, anesthetic apparatus and instruments, ENT precision instruments, acupuncture apparatus, and endoscopes etc. Heading 9018 does not specifically accommodate a separate CTI for Operation Theatre Lights, under sub-headings 9018 12, 9018 19, 9018 32, 9018 39 & 9018 50, therefore, these should be classified under residuary entry i.e. 9018 9099.

Further, in the instant case the applicant itself has contended that the subject goods i.e. `Operation Theatre Lights’ merit classification under CTI 9018 9099.

Further, Explanatory notes to heading 9018 explains that this heading covers a very wide range of instruments and appliances which, in the vast majority of cases, are used only in professional practice (e.g., by doctors, surgeons, dentists, veterinary surgeons, midwives), either to make a diagnosis, to prevent or treat an illness or to operate, etc. Instruments and appliances for anatomical or autoptic work, dissection etc., are also included, as are, under certain conditions, instruments and appliances for dental laboratories.

On plain reading of this explanatory note it is amply clear that this heading also covers instruments and appliances which arc used not only to make a diagnosis or to prevent but also to treat an illness or to operate.

Explanatory Notes to heading 9018 further states that it should also be noted that a number of the instruments used in medicine or surgery (human or veterinary) are, in effect, tools (e.g., hammers, mallets, saws, chisels, gouges, forceps, pliers, spatulas, etc.), or articles of cutlery (scissors, knives, shears, etc.). Such articles arc classified in this heading only when they arc clearly identifiable as being for medical or surgical use by reason of their special shape, the ease with which they are dismantled for sterilization, their better quality manufacture, the nature of the constituent metals or by their get-up (frequently packed in cases or boxes containing a set of instruments for a particular treatment : childbirth, autopsies, gynecologic, eye or ear surgery, veterinary cases for parturition, etc.). The instruments and appliances classified here may be equipped with optical devices; they may also make use of electricity, either as motive power or for transmission, or as a preventive, curative or diagnostic agent.

Explanatory Note (R) explains that group “Instruments and appliances for human medicine or surgery” includes Lamps which are specially designed for diagnostic, probing, irradiation etc. purposes. Torches, such as those in the shape of a pen arc excluded (heading 85.13) as are other lamps which are not clearly identifiable as being for medical or surgical use (heading 94.05).

On perusal of the catalogue of the subject goods it is observed that these goods satisfy above explanation as these goods arc clearly identifiable as being for medical or surgical use by reason of their special shape also. These goods arc available with height adjustments so as to enable surgeons to operate on desired height, further, these OT lights are far costlier than general purpose light source and arc available with better quality manufacture.

Heading 9405 covers Luminaires and Lighting Fittings Including Searchlights and Spotlights and Parts thereof, Not elsewhere specified or included; Illuminated Signs, Illuminated Name-Plates and the like, having a Permanently Fixed Light Source, and Parts thereof Not elsewhere specified or included. Heading 9405 excludes Medical diagnostic, probing, irradiation, etc., lamps (heading 90.18).

8. Further, during the Personal Hearing the applicant’s representative argued that subject Operation Theatre lights are far costlier than general purpose lights, therefore, it would be absurd to conclude that one would purchase these high value/price lights and then would use them as a general purpose light source.

From the specifications elaborated in the catalogue (supra), it is worth considering that at the time of buying these Operation Theatre Lights, user would have the intention to use them for specific use i.e. to be used in operation theatres only not as a general purpose light source.

The Hon’ble Supreme Court in the case of Collector of Customs Vs. Kumudam Publications [1997 (96) ELT 226 (SC)] has held that “it is not entirely correct to say that the end use or function of the goods is irrelevant to decide the question of classification”. A three Judge ‘Bench of the Hon’ble Supreme Court had also relied upon the function and end use in determining the classification in Indian Tool Manufactures Vs. Asst. Collector of Central Excise, Nasik & Others reported in 1994 (74) ELT 12 (SC).

The apex court decision in the case of Atul Glass Industries Ltd. and Others v. Collector of Central Excise and Others – 1986 (25) E.L.T. 473 (S.C.) wherein para 8 their Lordships observed as under:

8. The test commonly applied to such cases is: How is the product identified by the class or section of people dealing with or using the product? That is a test which is attracted whenever the statute does not contain any definition. …………… It is generally by its functional character that a product is so identified………. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies it in his mind. In the case of a glass, mirror, the consumer recalls primarily the reflective function of the article more than anything else. It is a mirror, an article which reflects images. It is referred to as a glass mirror only because the word glass is descriptive of the mirror in that glass has been used as a medium for manufacturing the mirror. The basic or fundamental character of the article lies in its being a mirror.”

It has been observed by their Lordship in Commissioner of Customs & C. Ex., Amritsar v. U.L. Steels – 2022 (381) 289 (S.C.) that “……… well-settled principle that words in a taxing statute must be construed in consonance with their commonly accepted meaning in the trade and their popular meaning. When a word is not explicitly defined, or there is ambiguity as to its meaning, it must be interpreted for the purpose of classification in the popular sense, which is the sense attributed to it by those people who are conversant with the subject matter that the statute is dealing with. This principle should to the authorities as it is a good fiscal policy not to put people in doubt or quandary about their tax liability. The common parlance test is an extension of the general principle of interpretation of statutes for deciphering the mind of the law-maker.”

Applying the same ratio, the product in question i.e. Operation Theatre Lights are to be classified under heading 9018 as these arc specialised goods and arc to be used in operation theatres only.

9. Para 6.1 of the Hon’ble CESTAT Order in the case of West fort Hi-Tech Hospital Ltd. versus Commissioner Of Customs, Cochin 2006 (204) E.L.T. 113 (Tri. – Bang.) is reproduced as under:

“6.1. Now let us examine the HSN Explanatory Notes. Under the heading 9018 the following note is given:

9018.90 – Other instruments and appliances

This heading covers a very wide range of instruments and appliances, which, in the vast majority of cases, are used only in professional practice (e.g. by doctors, surgeons, dentists, veterinary surgeons, midwives), either to make a diagnosis, to prevent or treat an illness or to operate, etc. Instruments and appliances for anatomical or autoptic work, dissection, etc., are also included, as are, under certain conditions, instruments and appliances for dental laboratories. The instruments of the heading may be made of any material (including precious metals). The Commissioner (Appeals) is of the view that these Operation Theatre Lights cannot be treated as having either a preventive, curative or diagnostic purpose. We do not understand how he has come to such a conclusion. Any surgery or operation will either have a curative or preventive purpose. There are many cases where advise is given for surgical operation in order to prevent certain future complications. In many cases, surgery definitely has curative purposes. Therefore, the Commissioner (Appeals) has adopted a view without any basis. We should also bear in mind that these lights have .specifically been designed for Operation Theatre. In that view of the matter, these lights can be considered as Appliances coming under CSII 9018.19 as Other Dear° Medical Apparatus. Therefore, we allow the appeal with consequential relief by setting aside the impugned order in appeal”.

From these observations of CESTAT Bengaluru it is amply clear that Operation Theatre Lights should not be confined to be considered as mere general purpose light source, conversely, these lights are specifically designed for Operation Theatre.

In the case of Commissioner of Central Excise, Delhi-11 Versus Cognate India 2017 (345) E.L.T. 122 (Tri.-Del.) Revenue was in appeal against order dated 28-8-2009 of Commissioner (Appeals), Delhi-II. The respondents were engaged in the manufacture of hospital furniture and operation theatre lights and had claimed the classification under Central Excise Tariff Heading 9018.00 as Instruments and Appliances used in medical, surgical, dental or veterinary sciences. The dispute in that appeal was related to correct classification of operation theatre lights. Department contested the assessee’s claim and classified the said products under CETU 9405 which deals with lamps and lighting fittings, including search lights and spot lights not elsewhere specified. The Original Authority classified the product under Heading 9405. The respondent on the other hand relied on the decision of the Tribunal, on similar set of facts, in M/s. West Fort Hi-Tech Hospital Ltd. v. CCE, Cochin reported in 2006 (77) R.L.T. 64 (CESTAT – Bangalore) = 2006 (204) E.L.T. 113 (Tribunal), wherein the Tribunal held that the operation theatre lamps are specially designed for operation theatres and arc to be classified under Heading 90.18. In the said case of CCE, Delhi-II vs. Cognate India, the Hon’ble CESTAT Delhi observed that the department’s contention that the order of the Tribunal in the case of M/s. West Fort Hi-Tech Hospital Ltd. vs. CCE, Cochin had been appealed to Hon’ble Supreme Court is no ground for denying their claim and held that the appeal filed by the department has been dismissed on monetary grounds by the Hon’ble Supreme Court keeping the question of law open 2015 (325) E.L.T. A154 (S.C.) and further held that these specialized lamps have shadow less operation, heat defusing capacity and also colour correction capabilities and these lamps are specially designed and made to be used only in operation theatres.

10. Now as far as judicial discipline and law is concerned the Hon’ble Supreme Court has held in the case of UOI vs Kamalakshi Finance Corporation Ltd. 1991 (55) ELT 433 (SC), that “order of higher appellate authorities should be unreservedly followed by subordinate authorities. The mere fact that the order of the appellate authority is not “acceptable” to the department — in itself and objectionable phrase- and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws”.

Further, the Joint Secretary (Revision Authority) to Government of India in its Order No. 288/13-CX dated 25.03.2013 in the matter of The Commissioner of Central Excise, Thane-II Vs. M/s. P.D. Impex, Mumbai relied on the same. Para 9 of the said order is reproduced as under:-

“Government observes that the department in this second round of revisionary proceedings is mainly contesting that they are filing Writ Petition against GOI Order dated 25.08.2009. This office vide letter F. No. 198/69/2004-RA-Cx dated 22.10.2012 specifically asked department to state the present status of the said Writ Petition. The department vide letter F. No. V(PKS/357) Trb Cell-246/10/AP/M-III dated 11.12.2012 stated the Writ Petition is at ‘Pre-admission stage’. As such, the said GOI order dated 25.08.2009 is neither set aside nor stayed by the Hon’ble Bombay High Court. Under such legal scenario the principle of judicial discipline demands that the order of higher authority is to be strictly implemented by the lower Authorities. Hon’ble Supreme Court has held in the case of UOI Vs. Kamalakshi Finance Corporation Ltd. 1991 (55) ELT 433 (SC), that orders of higher appellate authorities should be unreservedly followed by subordinate authorities unless operation of same has been stayed by competent court. Hence, Government finds no infirmity in the impugned Order-in-Appeal and therefore upholds the same.”

The Hon’ble SC has confirmed the same view already taken in the matter of UOI Vs. Kamalakshi Finance Corporation Ltd. 1991 (55) ELT 433 (SC) and passed the judgement on 01.02.2023 in the matter of M/s Godrej Sara lee Ltd. Vs. Excise and taxation officer-cum-assessing Authority, 2023 (384) E.L.T. 8 (S.C.). Para 34 of said judgement dated, 01.02.2023 is reproduced as under”-

“In our view, the revisional authority might have been justified in exercising suo motu power to revise the order of the Assessing Authority had the decision of the Tribunal been set aside or its operation stayed by competent court. So long it is not disputed that the Tribunal ‘s decision, having regard to the framework of classification of products/tax liability then existing, continues to remain operative and such framework too continues to remain operative when the impugned revisional orders were made, the Revisional authority was left with no other choice but to follow the decision of the Tribunal without any reservation. Unless the discipline of adhering to decisions made by the higher authorities is maintained, there would be utter chaos in administration of tax laws apart from undue harassment to assesses. We share the view expressed in Kamlakshi Finance Corporation Ltd. (supra).”

11. On the basis of foregoing discussions and findings, I reach to the conclusion that `Operation Theatre Lights’ merit classification under Custom Tariff Heading 9018, more specifically under CTI 9018 9099 of the First Schedule of the Customs Tariff Act, 1975, and I rule accordingly.

(P K Rameshwaram)
Customs Authority for Advance Rulings,
Mumbai.

F. No. CAAR/CUS/APPL/90 & 91/2023-0/o Commr-CAAR-Mumbai

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