2017 (12) TMI 1075 - AT - Central Excise

Classification of goods - various instruments and appliances used in medical, surgical dental or veterinary sciences including I.V. Cannulas - whether the subject goods 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? - benefit of 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. Held that - similar issue decided in the case of 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 term "Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces" for exemption eligibility.
2. Validity of denial of exemption based on Circular No.847/05/2007-CX.
3. Applicability of exemption under Notification No.6/2002 and subsequent notifications.
4. Justification for demanding duty on goods cleared during a specific period.

Issue 1: Interpretation of Exemption Term:
The case involved determining whether the subject goods, I.V. Cannulas, fell within the scope of the description "Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces" for exemption eligibility. Previous decisions by the Tribunal and the Supreme Court had upheld that the subject goods were covered by this description, allowing for exemption. The Tribunal referred to similar cases and emphasized that the term "blood vessels" should be read independently, concluding that the denial of exemption based on an opinion from the DGHS was not sustainable.

Issue 2: Validity of Circular No.847/05/2007-CX:
The Central Board of Excise and Customs (CBEC) had issued Circular No.847/05/2007-CX, stating that the subject goods were not covered by the exemption description. This circular led to the Department initiating inquiries and issuing show cause notices to the appellants. However, the Tribunal found that the circular's interpretation was not in line with previous decisions and that the denial of exemption based on this circular was not tenable.

Issue 3: Applicability of Exemption Notifications:
The appellant had been availing exemption on the subject goods based on Notification No.6/2002 and subsequent notifications that provided exemption for goods under the same description. The Tribunal noted that the appellant was eligible for exemption for the I.V. cannulas manufactured by them, following the precedent decisions and setting aside the impugned order.

Issue 4: Duty Demand for Specific Period:
The Department had issued a show cause notice proposing to deny the benefit of the Notification and demand duty on goods cleared during a specific period. The appellants contested the notice, arguing that the issue had already been decided by previous judgments and that the demand for the extended period was not justifiable. The Tribunal agreed with the appellants, citing previous decisions and allowing the appeals.

In conclusion, the Tribunal held that the subject goods qualified for exemption under the specified description, rejecting the denial of exemption based on the circular and previous decisions. The appellants were granted relief, and the impugned order was set aside, following the precedent decisions and allowing the appeals.