2015 (10) TMI 1557 - AT - Central Excise

Denial of exemption for Intra Venous Cannula (IVC) and Central Venous Catheters (CVC) as per notification no.6/2003-CE as amended, read with notification no.21/2002-customs (List 37, Sl.No.34) - Held that - Denial of exemption to IVC manufactured by the appellants is solely based on the DGHS opinion. While DGHS elaborately discussed the difference between the aorta and vena cavae on one side and peripheral vessels at the other side, there is no clarity from the records as to what is the scope of the term that blood vessels . The IVC manufactured by the appellants are used as Cannula is not disputed. The department s contention is that the Cannula is not eligible for exemption as per the terms of the above entry. It is common knowledge that the circulator system of the body consisted of arteries, veins and capillaries. It is also not disputed that there are different types of arteries and veins and aorta and vena cava are anatomically and physiologically different from smaller peripheral, arteries and veins. If IVC manufactured by the appellants are used in the similar such arteries and veins, the exemption is certainly eligible. - exemption notification does not prescribe the degree of similarity in respect of blood vessels similar to aorta and vena cavae and in a broad sense, even peripheral veins would be similar to vena cavae as both carry deoxygenated blood from various parts of the body to heart and peripheral arteries would be similar to aorta as they carry oxygenated blood from the heart to various parts of the body. - impugned orders for denial of exemption to IVC are not sustainable. - Decided in favour of assessee. There are separate entries in the exemption notification for Cannula and for Catheters of different types. The appellants claim for exemption under entry no.34 in the List 37 of the Notification no.21/2002-Cus is not tenable as the entry talks about only disposable and non-disposable Cannula for various types of blood vessels and intra-corporal spaces. Entry No.33 talks about some specific type of Catheters. Except for claiming that the Catheters manufactured by them can be broadly brought under the category of Cannula, the appellant did not make any corroborative submissions we find that the CVC manufactured by the appellant are meant for delivery of drugs and monitoring of central venous pressure. The Catheters are different from Cannula in structure and function, though there may be certain overlapping in their nature of usage. As such, we find that the exemption available to Cannula as per Entry No.34 in List 37 of Notification No.21/2002-Cus cannot be extended to the CVC manufactured by the appellants. - appellants are eligible for exemption for Cannula and not for catheters manufactured by them - Decided against assessee.

Summary

Issues:
Eligibility for exemption of Intra Venous Cannula (IVC) under notification no.6/2003-CE as amended, read with notification no.21/2002-customs (List 37, Sl.No.34) and the sustainability of demands for Central Venous Catheters (CVC).

Analysis:

Issue 1: Eligibility for exemption of Intra Venous Cannula (IVC)
The appellants contended that their IVC falls under the exemption entry for "disposable and non-disposable Cannula for aorta, vena cavae and similar veins and blood vessels." The dispute arose when the DGHS opined that the IVC in question was not suitable for aorta or vena cavae, leading to the denial of exemption. The Tribunal analyzed previous decisions and highlighted that the word "similar" in the entry qualifies only the word "veins" and not "blood vessels." It emphasized that the term "blood vessel" should be interpreted independently. The Tribunal reasoned that if the IVC is used in arteries and veins similar to aorta or vena cavae, it qualifies for exemption. The Tribunal concluded that the denial of exemption based solely on the DGHS opinion was not sustainable, and the IVC manufactured by the appellants should be eligible for exemption.

Issue 2: Sustainability of demands for Central Venous Catheters (CVC)
The Special Counsel argued that CVC is a distinct product from Cannula and does not fall under the exemption category for Cannula under the notification. The appellants initially paid duty on CVC but later sought exemption under a different category. The Tribunal noted separate entries in the exemption notification for Cannula and Catheters, with specific criteria for each. It determined that the CVC manufactured by the appellants, used for drug delivery and monitoring central venous pressure, did not qualify for exemption under the Cannula category. The Tribunal held that the exemption available for Cannula could not be extended to the CVC manufactured by the appellants.

In conclusion, the Tribunal ruled that the appellants were eligible for exemption for Cannula but not for the catheters manufactured by them. All appeals were disposed of accordingly.