DR. REDDYS LABORATORIES Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The present case relates to appeals filed both by the Assessee and by the revenue against the judgment dated 20th January, 2006 passed by Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as "CESTAT"). The Appellant company had been importing various models of diagnostic equipment such as BTS 302, BTS 310, BTS 320 and BTS 370 manufactured and supplied M/s. Bio Systems, Barcelona, Spain. On 27th May, 1999, the Appellant in its Bill of Entry filed at Hyderabad for clearance of models of BTS 320 and BTS 310 classified the goods as "auto analysers" under Entry 9030.89 of the Customs Tariff Act, 1975. The goods were seized by the custom authorities, being a total of 8 BTS 320 and 15 BTS 310 models, valued at Rs. 26,97,741.21. During the course of investigation, statements of six persons were recorded Under Section 108 of the Customs Act. On 2nd November, 1999 the Directorate of Revenue Intelligence, Chennai issued a show cause notice stating that the goods in question are "photometers" and not "auto analysers". On this basis, the revenue demanded:

(2.) On 24th December, 1999, the Assessee sent a detailed reply to the said show cause notice and explained that the imported equipments were "Auto Analysers" which used the photometry principle and were different from photometers. Being a pathology lab, these equipments were imported for the purpose of automatic analysis of blood samples. This, according to the Assessee, could not be done by a photometer. The only difference between the four models imported was that whereas model BTS 370 was technologically superior and fully automatic, the other models were not as technologically advanced nor were they fully automatic. However, insofar as the analysis of Enzymes is concerned, the said two models, namely, BTS 310 and BTS 320 were fully automatic, the only non-automatic part being the manual mixing of certain elements with blood samples. They further relied upon the technical literature to buttress their point and claimed that they were exempted under notification No. 20/1999 : , dated 28th February, 1999. The said notification exempts medical equipments specified in List 21, serial No. 66 of which reads as follows:

(3.) The Assessee was given a hearing on 9th January, 2001 by the learned Commissioner of Customs, Hyderabad. In a detailed order dated 1st March, 2001, the learned Commissioner went through the show cause notice and the reply filed by the Assessee. He correctly concluded that the issue for determination was whether the impugned goods were qualified to be called "auto analysers" of Enzymes, drug levels and biochemical investigations. In this connection, he referred to a book by "Tietz Text Book of Clinical Chemistry", second edition, edited by Carl A. Burtis and Edward R. Ashwood. More importantly, in para 46, which deserves to be quoted, the Commissioner found: