2017 (9) TMI 335 - AT - Central Excise

Classification of goods - Special Steel Bone Screws and plates - Held that - The goods manufactured by the appellant include various implants used in surgical interventions which are basically used in ortho surgery. The items which are commonly known as rehabilitation aids for the handicap can be understood to refer to the items such as wheelchair, etc. which are needed for the rehabilitation of handicapped persons - the items manufactured by the appellant cannot be considered under the term rehabilitation aids for the handicapped covered by Sl. No.11 of the N/N. 71/86-CE. - the items manufactured would no doubt be classifiable under CTH 9021, but will not be covered within the Sl. No.11 of the N/N. 71/86 and hence will not be eligible for clearance at nil rate of duty. SSI exemption - use of brand name of others - brand name of foreign collaborator used - Held that - the goods have been cleared with brand name SYNTHSES and AO/ASIF . A letter / certificate submitted by the appellant on the letter head of foreign collaborator supports the view of the Revenue that these are the brand names of the foreign collaborator - appellant not eligible for SSI exemption. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Classification of goods under Central Excise Tariff Act 1985.
2. Eligibility for concessional rate of duty under SSI exemption notification.
3. Brand name usage and eligibility for SSI exemption.

Analysis:
1. Classification of goods under Central Excise Tariff Act 1985:
The dispute in this case revolves around the classification of goods manufactured by the appellant, which are 'Appliances for implantation in the body to compensate the defects of disability,' specifically Special Steel Bone Screws and plates. The appellant claimed that these goods fell under heading no. 9021 of the Central Excise Tariff Act 1985. However, the issue arose as to whether these goods qualified under the specific description provided in the relevant notification no.71/1986-CE. The Tribunal examined the description of goods under CTH 9021, which includes orthopedic appliances, artificial parts of the body, and other devices for compensating defects or disabilities. The Tribunal noted that while the appellant's goods were classifiable under CTH 9021, they did not qualify under the specific description of 'artificial limbs and rehabilitation aids for the handicapped' as per the notification. The Tribunal relied on the opinion of the All India Institute of Physical Medicine and Rehabilitation to determine that the appellant's goods did not fall under the category of rehabilitation aids for the handicapped as specified in the notification.

2. Eligibility for concessional rate of duty under SSI exemption notification:
The appellant also faced allegations of irregularly availing the benefit of SSI exemption notifications dated 01.03.1986 and 01.03.1993 by clearing goods bearing the brand names of their foreign collaborators. The Department contended that the appellant was not eligible for the concessional rate of duty under the notifications due to the usage of brand names not eligible for the said benefit. The Tribunal examined the documents submitted by the appellant, which included letters/certificates from the foreign collaborator indicating the brand names 'SYNTHSES' and 'AO/ASIF.' Based on the evidence presented, the Tribunal concluded that the appellant was not entitled to the SSI exemption under the relevant notifications due to the usage of brand names of their foreign collaborator, as per para 7 of notification 175/1986 and para 4 of notification no.01/1993.

3. Brand name usage and eligibility for SSI exemption:
The Tribunal's decision was also influenced by the appellant's usage of brand names belonging to their foreign collaborator, which led to the denial of SSI exemption benefits. The Tribunal found that the goods were cleared with the brand names 'SYNTHSES' and 'AO/ASIF,' supported by documentation from the foreign collaborator. This usage of brand names not eligible for the SSI exemption resulted in the rejection of the appellant's claim for the concessional rate of duty. Consequently, the Tribunal upheld the impugned orders, dismissing all appeals and affirming the duty demands along with penal consequences. The judgment was pronounced on 20.7.2017 by the Tribunal.