ASSISTANT COLLECTOR OF CUSTOMS, AFU, AIRPORT, LAHORE VS The COLLECTOR OF CUSTOMS (APPEALS), LAHORE, 2018 PTD-CUSTOMS-APPELLATE-TRIBUNAL-LAHORE 2353 (2017)

Customs Act (IV of 1969)---

----S. 19---Exemption---Importer imported an Endosurgery and Endoscopy equipment and claimed the clearance thereof under PCT Heading 9939 vide goods declaration---Consignment was physically examined and documents/particulars were 100% confirmed, but the items did not fall in the list of items admissible for benefit under PCT Heading 9938---Such benefit was denied to the importer and the review filed by the importer was also rejected---Appeal filed by the importer was dismissed by Collector of Customs (Appeals)---Validity---Collector of Customs (Appeals) had extended a blanket exemption to "other equipments" relatable to fields of Neurovascular, Endosurgery, Endoscopy, Oncology, Urology and Gynecology under the garb of rescuing those components of PCT Heading 9938 from redundancy---PCT Heading 9938 (Entries A to K) related solely to disposables and equipments relating to cardiology/cardiac surgery, but it was deemed necessary that PCT Heading 9938 (Entry "L") thereof relating to "Peripheral Interventions Equipments" be further probed juxtaposed with preface of impugned Tariff Heading so that a correct conclusion could be reached---General overview of schematics of PCT Heading 9938 would reveal that the equipment and disposables mentioned thereunder, were used or deployed in the most advanced field of surgery known as minimally invasive surgery---Entry of "L" to PCT Heading 9938 clearly covered the disposables and equipments used in various peripheral interventions procedures in all the field of medical sciences mentioned in Preamble of PCT Heading 9938---Interpretation of the departmental officers, restricting items mentioned under entries "A" to "L" of PCT 9938 to the fields of cardiology and cardiac surgery and resultantly declaring other specified fields of medical science superfluous, was ill-conceived, which could not be sustained---One therefore, could not advent to the reasoning that the term "other equipment" was to be read in isolation---Finding of the forum below that same was disjunctive in nature to rest of the Tariff Heading 9938, could not be subscribed---Forum below had erred in interpreting that the narration "and other equipment" carried the impute of providing a blanket exemption to sundry "disposables and equipment", meant for cardiology/cardiac surgery, neurovascular, Electrophysiology, Endoscopy, Endosurgery, Oncology, Urology and Gynecology---Only those disposable and equipment would merit extension of exemption under the PCT Heading 9938 which qualified the specifics mentioned in item "A" to "L" thereunder---Impugned "cervical cup", not only failed the test of contemporaneousness with items specifically listed under PCT Heading 9938, but also did not fall within the precincts of peripheral interventions equipment used in conjunction with the various branches of medical science mentioned in the impugned Tariff Heading---Impugned instrument did not qualify for exemption of customs duty and taxes under PCT Heading 9938, benefit thereof, was correctly denied by the Deputy Collector, Model Customs Collectorate---Grossly errant impugned order was set aside and appeal was accepted, in circumstances.

G.N. Zafar for Appellant.

Sakhi Muhammad for Respondent.

JUDGMENT

OMAR ARSHAD HAKEEM, MEMBER (JUDICIAL).---This judgment shall dispose of an appeal filed against Order-in-Appeal No.240/2016 dated 04.11.2016 passed by the learned Collector of Customs, (Appeals) Lahore.

2.Precise facts of the core controversy involved in the instant appeal are that Messrs Kaleemullah and Company, Lahore imported a consignment comprising of Endosurgery and Endoscopy equipment and claimed clearance thereof under specified PCT Heading 9938 vide GD No. LPAF -HC-10883 dated 26.08.2016 filed in WeBoc System claiming exemption of custom duty and sales tax. The consignment was physically examined by the examination staff and documents/particulars have been 100% confirmed. The competent authority examined the case and discussed it in detail with the importer and the representatives. The product did not fall in the list of products admissible for benefit under PCT Heading 9938. Therefore, the benefit was denied. The review filed by the importer was also rejected.

3.Being aggrieved from the aforesaid assessment order Messrs Kaleemullah and Company filed an appeal before the learned Collector of Customs (Appeals), Lahore, who vide impugned order dismissed it in the following manner:--

"I have examined the case record, considered the ground of appeal, verbal arguments advanced by the learned counsel of the appellant as well as the departmental representative during hearing proceedings and have found that the assessment order dated 10.09.2016 passed on GD No. LPAF-HC-10883 dated 26.08.2016 by the Deputy Collector (AFU), indicates that since Endosurgery disposables/equipment imported by M/s Kaleemull and Company, Lahore are not specifically included at Sr. Nos. A to L of PCT Heading 9938 they are not covered under the same Heading.

A close perusal of the PCT Heading 9938 indicates that it covers 'following cardiology/cardiac surgery, Neurovascular, Electrophysiology, Endosurgery, Endoscopy, Oncology, Urology, Gynaecology disposables and other equipment". However the list given thereunder at S. Nos. A to L include only cardiology/cardiac surgery disposables/equipment and does not specifically include Neurovascular, Electrophysiology, Endosurgery, Endoscopy, Oncology, Urology, Gynaecology disposables and other equipment. The department's contention as is evident from the assessment order implies that the words "Neurovascular, Electrophysiology, Endosurgery, Endoscopy, Oncology, Urology, Gynaecology" are redundant. However, it is an established and well recognized and trite rule of interpretation of statutes (1994 MLD 1340" 2010 SCMR 354: PLD 2008 SC 771) that no word mentioned in any law is to be considered as redundant; a meaning has to be given to each and every word used in a statutory provision.

(i) For the purpose of interpretation of Heading 9938 it can be sub-divided into two parts as below:--

(ii) Following cardiology/cardiac surgery, neurovascular, electrophysiology, endosurgery, endoscopy, oncology, urology, gynaecology disposables.

(ii) And other equipment.

The items at S. No. A to L under Heading 9938 are meant for the goods at S. No. (i) above as the word "following" refers to cardiology/cardiac surgery, neurovascular, electrophysiology, endosurgery, endoscopy, oncology, urology, gynaecology disposables (which includes equipment), whereas the words "and other equipment" is an independent narration which is not governed by the word 'following'. This narration is meant for the disposables/equipment other than those given at A to L of Heading 9938 meant for cardiology/cardiac surgery, neurovascular, electrophysiology, endosurgery, endoscopy, oncology, urology, gynaecology. This interpretation is in consonance with the intent and purpose of the board concession envisaged for a wide variety of equipment including disposables used in the nine different branches of medicine. The word 'including' implies that peripheral intervention disposables and equipment for cardiology/cardiac surgery, neurovascular, electrophysiology, endosurgery, endoscopy, oncology, urology, gynaecology too are covered under Heading 9938.

The above interpretation coincide with the historical background of PCT Heading 9938. In the years 2008-2009 Heading 9938 reads "following cardiology/cardiac surgery disposables and other equipment". The list of disposables and equipment was given at its S. Nos. A to K. However, in the Pakistan Customs Tariff 2009-2010 the scope of the heading was extended and it now read as under:--

"Following cardiology/cardiac surgery, neurovascular, electro-physiology, endosurgery, endoscopy, oncology, urology, gynaecology disposables and other equipment".

The list of disposables and equipment mentioned in the Tariff 2009-2010 (even in Tariff 2014-2015) is exactly the same as given in the Tariff 2008-2009 with the addition of "peripheral intervention equipment" mentioned at its S. No. E which reflects the intention of the legislature to extend the facility of zero % duty to neurovascular, electrophysiology, endosurgery, endoscopy, oncology, urology, gynaecology disposables/equipment also by classiffing them under Heading 9938.

The clearance data of the similar goods also indicates that such goods are/were being released under Heading 9938 by the Lahore Customs as well as Karachi Customs which fact can be verified through the computerized record. Further the Board vide its letter No. 17(4)/2006.Cus.Hxm-18353-R dated 13.02.2013 has already decided that resectoscope, cystoscope, ureteroscope, arthroscopy and the accessories are covered under PCT Heading 9938 of Pakistan Customs Tariff as equipment for endosurgery and endoscopy.

In view of the above the following disposables/equipments, imported by Messrs Kaleemullah and Company Lahore vide GD No. LPAF-HC-10883 dated 27.08.2016 specifically used for endosurgery are covered under the PCT Heading 9938.

The instant appeal is accepted and the assessment order dated 10.09.2016 passed on GD No. LPAF-HC- 10883 dated 26.08.2016 is modified to this extent only."

4.Being aggrieved from the aforesaid order of the learned Collector of Customs (Appeals), Lahore the appellant/department has filed the instant appeal before this Tribunal on the following grounds:--

(a)That impugned goods i.e. V Care Cervical Cups of assorted sizes imported by the respondent No. 2 are not specifically mentioned at S. Nos. A To L of PCT heading 9938 therefore the benefit of claimed PCT heading was denied being inadmissible.

(b)The word 'following' mentioned in the start of the PCT Heading 9938 is very important which restricted the benefit of PCT heading 9938 to the items specifically mentioned therein from S. Nos. A to L. As per literature the imported equipments are intended to be used by the Gyne surgeon during the surgery procedures of uterus and as such the same are not listed in the items mentioned at S. Nos. A to L of PCT heading 9938, therefore do not entitle for claimed exemption of said PCT heading. As per literature the impugned item is not endosurgery equipments as claimed by the respondent No. 2. However, the respondent No. 1 has ignored these facts and decided the case without any lawful excuse.

(c)The respondent No. 1 while deciding the case has ignored the fact that considering all equipment/ apparatus related to cardiology/cardiac surgery, neurovascular, electrophysiology, endosurgery, endoscopy, oncology, urology, gynecology disposables and other equipment exempted under PCT heading 9938 leaves PCT 9914 superfluous and redundant which is factually not possible.

(d)That to resolve the issue a reference has been sent to FBR for clarification regarding exemption of PCT Heading 9938 on impugned goods of the respondent No. 2. This fact was also brought to the knowledge of the respondent No. 1 and requested him to instruct the respondent No. 2 to release their consignment under section 81 of the Customs Act, 1969 till the final decision of the Board. However, the respondent No. 1 without considering the facts and merits of the case and fact that the matter is pending before the FBR for want of clarification regarding admissibility of PCT heading 9938 on impugned goods has decided the case in favour of respondent No. 2 without considering the word 'following' appearing in the preamble of the PCT heading 9938. Therefore the impugned orders may be set aside.

(e)That an option is also available to respondent No. 2 to release their consignment under section 81 of the Customs Act, 1969 till the final decision from the FBR.

5.I have given my anxious considerations to the contentions of learned counsel of the parties and perused the records.

6.I have seen the impugned order and it is manifest that the learned Collector of Customs (Appeals) has extended a blanket exemption to "other equipments" relatable to fields of Neurovascular, Endosurgery. Endoscopy, Oncology, Urology and Gynecology under the garb of rescuing these components of PCT 9938 from redundancy, this finding is pivoted on the following two perceptions;

(i)Firstly, the forum below has concluded that the items "A" to "L" to PCT 9938 exclusively enumerate disposables, equipments relating to Cardiology/Cardiac surgery and not disposables and equipments relatable to the fields of Neurovascular, Endosurgery, Endoscopy, Oncology, Urology and Gynecology.

(ii)While secondly, the aforementioned anomaly has been translated by the forum below into causing a disconnect, isolating thereby the term "Following" appearing at the inception of the Scheme of impugned Tariff Heading to the extent of the fields of Cardiology/Cardiac Surgery.

"A question then arises as to whether the item numbers "A" to "L" to PCT Heading 9938 exclusively include equipments or disposables relating to Cardiology/Cardiac Surgery or that these also include equipments or disposables relatable to the fields of Neurovascular, Endosurgery, Endoscopy, Oncology, Urology and Gynecology?"

7.I have gone through the said PCT Heading 9938, and manifestly it cannot be denied that item numbers "A" to "K" thereunder do relate solely to disposables and equipments relating to Cardiology/Cardiac Surgery, however, it is deemed necessary that position "L" thereof relating to "Peripheral Interventions Equipments" be further probed juxtaposed with preface of impugned Tariff Heading so that a correct conclusion may be reached;

8.The Tariff Heading 9938 read thus:--

9.When I look at the definition of peripheral in the above context; It is seen that according to Merriam Webster dictionary means;

"Of relating to involving or located near a periphery or surface part (as of human body)"

10.I begin by noting that a general overview of schematics of PCT Heading 9938 would reveal that the equipment and disposables mentioned thereunder are used or deployed in the most advanced field of surgery known as minimally invasive surgery, the most important aspect of minimally invasive procedures is that of Interventional Radiology wherein by the use of imaging techniques, interventional instruments can be directed through small cuts in the peripheries of the human body by the Surgeons/Radiologists by way of catheters to perform Endosurgery or Angioplasty etc. these systems are also designed to deploy various equipments (like Pacemakers, implantable Cardiovertes etc.) in the human body; Needless to emphasize that with these new technologies many conditions which once required surgery can now be treated non-surgically. These procedures also include several treatments and inspection procedures spanning the disciplines of Neurovascular, Endosurgery, Endoscopy, Oncology, Urology and Gynecology that can be classified as peripheral/ minimally invasive interventions;

(i)For instance; In treatment of peripheral artery disease through Endosurgery the objective is to remove the blockage in arteries to reopen blood vessels to allow oxygen rich blood to flow smoothly through the vessel; the procedure adopted is that a physician threads a catheter (a thin flexible tube) with a balloon on the end through a small arterial nick in the peripheries of the human body guides the catheter to the site of blockage, once the catheter is in place the balloon is then inflated and dephlated repeatedly which flattens the plaque and restores normal blood flow through the artery, in many cases once the blood vessels have been widened they are too weak to hold their position therefore, the physician inserts a stent which acts as a scaffolding to hold the open artery.

(ii)For instance; In the field of Urology in case of Renal Artery Stenosis pertaining to the narrowing of the Arteries of kidney which can impede blood flow to the target Kidney resulting in Renal Vascular Hypertension, a small flexible tube called a catheter can be positioned inside a Renal Artery through peripheral intervention, an Angioplasty is performed using a catheter attached to a tiny balloon the Angioplasty Balloon is inflated inside the vessel and presses any plaque (blockage) into the walls of the vessel. Stenting is also employed in required circumstances to support the artery walls in order to keep them from collapsing.

(iii)For instance; In the field of Neurovascular Surgery in case of Carotid Artery disease; Carotid Stenting is a minimally invasive interventional procedure which involves a small puncture in the thigh through which a specially designed catheter is inserted into an artery in the thigh and directed to the area of narrowing in the Carotid Artery once the catheter is in place, a small balloon tip is inflated for a few seconds to dilate the artery, then, a stent (a small mesh tube that acts as a scaffold to provide support inside the artery) is placed in the artery and is opened to fit the Artery Tiny Filters are used to capture any particles in the artery and prevent them from going to the brain and causing a stroke.

11.When I look at the disposables and equipments mentioned in impugned entry "L" to PCT 9938 in light of what has been discussed in para 10 supra it is quite evident that the said entry clearly covers the disposables and equipments used in various peripheral interventions procedures in all the fields of medical sciences mentioned in preamble of 9938. In this view of the matter I am of the considered opinion that the interpretation of the forum below restricting items mentioned under entries "A" to "L" of PCT Heading 9938 to the fields of Cardiology and Cardiac Surgery and resultantly declaring other specified fields of medical science superfluous is ill-conceived, thus cannot be sustained.

12.One therefore cannot advert to the reasoning that the term "other equipment" is to be read in isolation, and consequently the finding of the forum below that the same is disjunctive in nature to rest of the Tariff Heading 9938 can also not be subscribed to; I am of the considered opinion that the preamble term "disposables and other equipment" is "ejusdem generic" to items number "A" through "L" to PCT Heading 9938 and thus cannot be isolated from the word "following" mentioned at the inception of its Scheme. It is manifest that the forum below erred in interpreting that the narration "and other equipment" carries the impute of providing a blanket exemption to sundry "disposables and equipment" meant for Cardiology/Cardiac Surgery, Neurovascular, Electrophysiology, Endoscopy, Endosurgery, Oncology, Urology and Gynecology.

13.In view of what has been discussed above it is very emphatically held that only those disposable and equipment shall merit extension of exemption under the PCT Heading 9938 which qualify the specifies mentioned in items "A" to "L" thereunder.

14.Now coming to case in hand the impugned product i.e. Cervical cup; According to its literature the impugned instrument provides correct amount of tension needed for Uterine Surgery; During surgery it is used to mobilize the Uterus and to prevent injury to adjoining organs such as the Bladder or Ureter by moving them safely away. I have carefully considered the instrument in hand in light of what has been discussed above ibid the terms of Heading 9938, I am of the considered opinion that the impugned V. Care Cervical Cup not only fails the test of contemporaneousness with items specifically listed under PCT Heading 9938 but also does not fall within the precincts of peripheral interventions equipment used in conjunction with the various branches of medical science mentioned in the impugned Tariff Heading; I am therefore constrained to conclude that the impugned instrument does not qualify for exemption of Customs Duty and taxes under PCT Heading 9938 thus hold that the benefit thereof was correctly denied by the Deputy Collector, Model Customs Collectorate (Preventive), Lahore.

15.The grossly errant impugned order is thus set aside consequently this Customs Appeal stands accepted in the above manner.

16.Parties be informed through registered post A.D. or by UMS.

17.File be consigned to record after completion.

HBT/98/Tax(Trib.) Appeal accepted.