2014 (10) TMI 558 - AT - Central Excise

Denial of the benefit of duty exemption - Notification 21/2002-Cus dated 01/03/2002 - instruments and implants for severely physically handicapped patients and joint replacements and spinal implants including bone cement. - goods on which respondent claimed the exemption are Depth gauges, Impactors, Hammers, etc. - Held that - Exemption covers both instruments and implants. The argument of the Revenue that instruments should also be implanted does not flow from the wordings of the entry. So long as the instruments are for severely physically handicapped patients or for joint replacements or they are in the nature of spinal instruments these would be eligible for the benefit of the said exemption. Therefore, the argument of the Revenue that the instruments should also be implanted cannot be sustained in law. However, we observe that the instruments should be for severely physically handicapped patients or for joint replacements or spinal instruments. From the product literature and write-up submitted by the respondent-assessee, it is not clear that these are for severely handicapped patients . To establish this fact expert opinion is required and, therefore the respondent-assesssee should be given an opportunity to lead expert opinion on the matter so as to establish their claim for exemption. The expert opinion can be by way of affidavits of leading orthopaedic surgeons or from hospital rendering such services. - Matter remanded back - Decided in favour of Revenue.

Issues Involved:
Interpretation of duty exemption under Notification 21/2002-Cus for instruments and implants for severely physically handicapped patients and joint replacements.

Detailed Analysis:
1. Issue: Denial of duty exemption by the lower appellate authority.
- The appeal challenged the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Pune-III, which set aside the denial of duty exemption under Notification 21/2002-Cus.
- The Revenue contended that the goods claimed for exemption by the respondent, M/s. Sushrut Surgicals Pvt. Ltd., such as Depth gauges, Impactors, Hammers, do not qualify as implants for severely physically handicapped patients, thus, should not be eligible for exemption.
- The Revenue argued that the exemption is specific to severely physically handicapped patients, and there was no evidence presented by the respondent to support their claim for exemption.

2. Issue: Interpretation of the exemption criteria for instruments and implants.
- The respondent argued that the Notification distinguishes between instruments and implants, indicating that instruments need not be implanted to qualify for exemption.
- The respondent provided a product catalogue and a write-up demonstrating the purpose of the instruments in orthopaedic surgical procedures to support their claim for exemption.
- The Tribunal noted that the exemption covers both instruments and implants for severely physically handicapped patients, joint replacements, and spinal instruments, without a requirement for instruments to be implanted.

3. Decision:
- The Tribunal held that the argument of the Revenue, stating that instruments should be implanted to qualify for exemption, was not supported by the wording of the exemption entry.
- However, the Tribunal noted that expert opinion is required to establish if the instruments are for severely physically handicapped patients.
- The Tribunal allowed the appeal by way of remand, directing the respondent to provide expert opinion from orthopaedic surgeons or hospitals to support their claim for exemption.
- The adjudicating authority was instructed to reconsider the matter after reviewing the expert opinion submitted by the respondent.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's decision regarding the interpretation of duty exemption criteria for instruments and implants under Notification 21/2002-Cus.

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