2000 (3) TMI 208 - AT - Central Excise

Summary

Issues Involved:
1. Correct classification under the old Central Excise Tariff of various adhesive plasters and bandages.
2. Conflict between two Tribunal decisions regarding classification.
3. Consideration of therapeutic properties for classification.
4. Adherence to governmental circulars and Supreme Court rulings.
5. Specific relief for M/s. Surgichem based on a previous Tribunal decision.

Detailed Analysis:

1. Correct Classification under the Old Central Excise Tariff:
The primary issue in these appeals is the correct classification of adhesive plaster described as Porofix Adhesive Plaster BPC/USP, plaster of paris bandages, Johnson plast adhesive type USP (all sizes), and economy pack under the old Central Excise Tariff. The contention revolves around whether these items fall under Tariff Item 14E, 60, or 68.

2. Conflict Between Tribunal Decisions:
The Larger Bench was convened due to conflicting decisions by the Tribunal in the cases of J.L. Morison, Son & Jones (India) Ltd. v. Collector of Central Excise, Bombay (1984) and Collector of Central Excise, Rajkot v. Surgichem (1987). The first decision classified zinc oxide adhesive plasters B.P.C. under Tariff Item 14E, while the second classified adhesive plaster B.P.C. tapes under Tariff Item 68 and not under 14E or 60.

3. Consideration of Therapeutic Properties:
The products in question are surgical dressings used for protecting and immobilizing affected areas, manufactured under drugs license according to British and American pharmacopoeia specifications. The counsel for the appellants argued that these items, despite being manufactured according to pharmacopoeia specifications, possess no therapeutic or curative properties. They merely protect the affected area or immobilize parts of the body to aid natural healing. References were made to the British Pharmaceutical Codex and the United States Pharmacopeia, which describe these items as non-therapeutic.

4. Adherence to Governmental Circulars and Supreme Court Rulings:
The counsel for the appellants referred to various governmental circulars which consistently clarified that non-therapeutic surgical dressings do not fall under Tariff Item 14E. Circulars from 1974, 1979, and 1980 emphasized that non-medicated surgical dressings without therapeutic properties should not be classified under 14E. The Supreme Court's decision in Paper Products Ltd. v. Commissioner of Central Excise (1999) was cited, asserting that departmental authorities are bound by C.B.E. & C. circulars and cannot adopt a contrary stance.

5. Specific Relief for M/s. Surgichem:
M/s. Surgichem filed a miscellaneous application asserting that their case was covered by a previous Tribunal decision (Order No. 727/1986-C, dated 27-11-1986). As no appeal was filed by the Revenue against that order, it became final, and consequential relief should be granted. The Tribunal agreed, stating that the Revenue could not question the implementation of the final order, subject to provisions relating to unjust enrichment.

Conclusion:
The Tribunal concluded that Tariff Item 60 is ruled out for classification based on previous decisions. The primary consideration is whether the products fall under Tariff Item 14E or 68. Given the consistent governmental view and pharmacopoeial standards indicating the non-therapeutic nature of the products, the Tribunal held that the correct classification is under Tariff Item 68. Consequently, the items are classifiable under Tariff Item 68 with concessional assessment applicable to drugs and medicines under various notifications. The appeals and the reference were ordered accordingly, granting specific relief to M/s. Surgichem.