Excise benefit denied on heart device

Supreme Court has dismissed the appeal of BPL Ltd seeking excise exemption for two models of defibrillators, a medical device used in heart conditions. It delivers shock through paddles placed across the heart or on the surface of the body during cardiac emergency. According to the excise commissioner, Kochi, the devices manufactured by BPL were designed to provide external counter shock and was liable to duty. Only those which are meant for internal use had duty exemption. Since the product in question was the conventional one used externally, it did not enjoy exemption, it was argued. BPL produced evidence from the department of electronics, hospitals etc to argue that its products could be used internally also. The members of the appellate tribunal were divided on this technical question and referred it to a third member. His opinion went against the company. Its appeal to Supreme Court was not successful as it held that the products were primarily meant for external use and it is not implantable in the human body. The judgment emphasised that in interpreting notifications related to tax matters, exemption clauses must be strictly construed and the assessee must be able to prove conclusively that its claim was squarely within the ambit of the rules.

Business Standard, 15-6-2015

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