Whether Operation theatre lights covered under CET Heading 9018 or 9405?

PJ/Case Law /2016-17/3435

Case- COMMISSIONER OF CENTRAL EXCISE, DELHI-II Versus COGNATE INDIA

Citation- 2017 (345) E.L.T. 122 (Tri. - Del.)

Brief Facts- Revenue is in appeal against order dated 28-8-2009 of Commissioner (Appeals), Delhi-II. The respondents are engaged in the manufacture of hospital furniture and operation theatre lights. The dispute in the present appeal relates to correct classification of operation theatre lights. The respondents have claimed the classification under Central Excise Tariff Heading 9018.00 as Instruments and Appliances used in medical, surgical, dental or veterinary sciences. However, the Department contested the assessee’s claim and classified the said products under CETH 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 and denied the exemption available to medical equipments in terms of Notification No. 10/2003, dated 1-3-2003. On appeal vide the impugned order, the Commissioner (Appeals) set aside the original order and allowed the appeal. Aggrieved by this, the Department is in appeal.

Appellant’s Contention-The dispute is relating to classification of operation theatre lights. It is the contention of the Department that these lights cannot be considered as medical equipment or apparatus. They are basically lighting system with more features of spot lights. The exemption claimed by the respondent under “other medical equipments” is not tenable. It is the case of the Department that even if these lights are designed for use in operation theatre they do not become any type of medical equipment. They cannot be considered as electro medical apparatus.

Respondent’s Contention- 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). The Tribunal held that the operation theatre lamps are specially designed for operation theatres and are to be classified under Heading 9018. The Department’s contention that the said order of the Tribunal has been appealed to Hon’ble Supreme Court is no ground for denying their claim. We note 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.).

Reasoning Of Judgement- The Tribunal perused the impugned order and also the product literature. The observation in the impugned order on the product is as below :-
“Light systems has been specifically designed for purpose of operation, purchased by doctors and hospitals, not used for general purpose and therefore should be considered as medical equipment. In the product literature, the item has been referred to as ‘Operation Theatre Lights’, the standard features are given as under :
*          Centre adjusting handle which is detachable and autoclavable
*          A Spring-loaded Counter Balance is provided for convenient adjustment of the light position.
*          Ceiling mounted with free movements at all positions.
*          Dome can be swept around the pole and also on its own axis.
*          Special bearings are used for smooth movements.
*          Unique spring loading system is used for perfect and steady positioning.
*          Beautifully finished by heat cure Resin paint, oven baked for long life. The salient features are mentioned as follows :
•          Halogen Lights for all Minor and Major Operations.
•          Cool lights that keep patients comfortable and Operating Staff free from fatigue.
•          Unique, high intensity, cool, colour-corrected, heatless and shadow-less light with easy, finger-touch maneuverability.
On a general nature, the features of Spotlight as alleged in the show cause notice are as follows :
•          Used for focusing on a personal or an object at a longer distance.
•          Can be sold to any body
•          Very uncomfortable to persons on whom it is focused.
From the product description, it is seen that the product O.T. Lights have a number of features to put them beyond the scope of ‘spotlight’, and to bring them within the scope of medical and surgical appliances and apparatus. Sub-heading No. 9405 covers ‘Lamps and lighting fittings including searchlights and spotlights and parts thereof’. These are simply items sold to any common man at an average cost either as a part of a vehicle or furniture. The instruments - appliances and apparatus for medical and surgical use were to be classified under Heading No. 9018 of the CET. The O.T. Lights are nothing but specialized surgical equipment”.
The Tribunalnoted that these specialized lamps have shadowless operation, heat defusing capacity and also colour correction capabilities. The Tribuanal was in agreement with the lower authority that these lamps are specially designed and made to be used only in operation theatres. The Tribuanal found that the reliance placed by the Commissioner (Appeals) on the observation of Hon’ble Supreme Court in the case of M/s. Metagraph (P) Ltd. v. CCE reported in 1996 (88)E.L.T.630 (S.C.) is appropriate.
On careful consideration of the materials on record, the Tribunal found no merit in the appeal filed by the Department. Accordingly, the same is rejected.

Decision-Appeals rejected

Comment- The analogy of the case is that these specialized lamps having shadowless operation, heat defusing capacity and colour correction capabilities especially designed to be used in operation theatres should be classified under sub-heading 9018.00 of Central Excise Tariff as medical equipments and not under Heading 9405 as search lights/spot lights. Further these equipments being classifiable under sub-heading 9018.00 of Central Excise Tariff were eligible to exemption under Notification No. 10/2003-C.E. Tribunal rejected the department appeal on the observation of Hon’ble Supreme Court in the case of M/s. Metagraph (P) Ltd. v. CCE reported in 1996 (88)E.L.T.630 (S.C.)

Prepared By- Prateeksha Jain

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PJ/Case Law /2016-17/3435

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