2017 (6) TMI 414 - AT - Central Excise

Whether I.V. Cannulas fall within the scope of the term Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces or otherwise - N/N. 6/2002 dated 01/03/2002, after amendment vide N/N. 6/2003-CE dated 01/03/2003, read with N/N. 21/2002-CU dated 01/03/2002 and continued to be exempted under such similar N/N. 6/2006-CE. Held that - the issue herein is squarely covered by the precedent orders of this Tribunal in M/s Becton Dickinson India Pvt. Ltd. Versus CCE, Delhi III 2015 (6) TMI 335 - CESTAT NEW DELHI , where it was held that On the basis of the certificates of various experts certifying that the scalp vein infusion sets, in question, are Cannula which can be used for blood vessels, the Tribunal held that the same would be eligible for exemption - the appellants are eligible for exemption for i. v. cannula manufactured by them - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Interpretation of the scope of exemption for I.V. Cannulas under specific notifications.
2. Dispute regarding the eligibility of the subject goods for exemption from Central Excise Duty.
3. Consideration of previous Tribunal and Supreme Court decisions on similar matters.
4. Application of the term "Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces" in the context of exemption.

Issue 1: Interpretation of the scope of exemption for I.V. Cannulas under specific notifications:
The case involved the appellant and its Director engaged in the manufacture of medical instruments, including I.V. Cannulas. The dispute centered around whether the subject goods fell within the description of "Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces" for exemption under specific notifications. The Tribunal referred to previous decisions, including CCE, Coimbatore Vs. Saberwal Surgical Pvt. Ltd., where the exemption was allowed. The issue was whether the subject goods were covered by the description and eligible for exemption.

Issue 2: Dispute regarding the eligibility of the subject goods for exemption from Central Excise Duty:
The Department, relying on a circular, contended that the subject goods were not covered by the description for exemption. Show cause notices were issued to demand duty on goods cleared during a specific period. The Order-in-Original confirmed the demand, imposing penalties on the appellant and Director. The appellants contested the notice, citing previous Tribunal and Supreme Court decisions supporting their eligibility for exemption based on the description provided in the notifications.

Issue 3: Consideration of previous Tribunal and Supreme Court decisions on similar matters:
The Tribunal considered previous decisions in cases like C.C.E., Coimbatore vs. Sabharwal Surgical Pvt. Ltd. and Medisphere, where the issue of exemption for similar goods was decided in favor of the appellants. The Tribunal also referred to decisions in cases like Becton Dickinson India Pvt. Ltd. and Eastern Medikit Ltd., which followed the earlier rulings supporting the eligibility of the subject goods for exemption. The Tribunal emphasized that the matter was interpretational and that the demand for an extended period was not tenable.

Issue 4: Application of the term "Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces" in the context of exemption:
The Tribunal analyzed the scope of the term "similar veins and blood vessels" in the context of exemption eligibility. It was noted that the term "blood vessels" should be read independently, and the exemption applied to cannulas used in veins similar to aorta and vena cavae. The Tribunal held that the denial of exemption based on an opinion from the Department was not sustainable, as the description in the notifications did not specify the degree of similarity required. Following precedent decisions, the Tribunal ruled in favor of the appellants, allowing the exemption for the I.V. cannulas manufactured by them.

This detailed analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's decision based on legal interpretations and precedents.