2019 (4) TMI 538 - AT - Customs

Benefit of concessional rate of duty - applicability of N/N. 21/2002, dt.01.03.2002 - import and trading of various surgical products, including surgical tapes from China/Taiwan and Thailand - whether the surgical tapes imported by the appellant and declared as skin barrier Micropore Surgical Tapes would be entitled to the benefit of the notification in question. Sl.No.22 of List 37 under Sl.No.363A of Notification No.21/2002, dated 01.03.2002? - Majority decision. Held that - The entire evidences produced in the impugned order by the Commissioner, which is primarily based upon the information downloaded from the web sites, relates to the Ostomy procedure and various Ostomy products, which in our view is not of much importance, inasmuch as, it is the assessee's own case that such surgical tapes can be used in other procedures also. Learned advocate has rested his case on the simple reading of the said notification and the interpretation of the same and has impressed upon the point that the goods in question being admittedly skin barrier 'Micropore Surgical Tapes' are entitled to the exemption even though the same were capable of being used, apart from Ostomy products, in other procedures also - The notification nowhere insists on the end-use of the products and, inasmuch as, the product in question is capable of being used as Ostomy products, the same would attract the exemption. The expression used in the notification is skin barrier 'Micropore Surgical Tapes' and there is no justification in interpreting the said expression as wafers . As such, the Revenue's stand that such expression only refers to the product Ostomy Wafers cannot be appreciated. According to us as long as the appellant's product satisfy the definition of the skin barrier Micropore Surgical Tapes , exemption would beavailable to them. As regards the interpretation of the notification, we can have guidance from the Hon'ble Supreme Court's decision in the case of Commissioner of Central Excise, Gujarat Vs M/s. Reliance Petroleum Ltd 2008 (5) TMI 13 - SUPREME COURT wherein it was observed that an exemption notification has to be considered liberally and the benefit thereof should not be denied by taking recourse to doctrine of narrow interpretation. In the present case, we agree with the learned advocate that the entire purpose of the notification is to grant exemption to the products which are used for management of specified Ostomy procedures. The notification apart from covering the specific Ostomy products, also covers the general purpose products as already observed by us. Hence, benefit cannot be disallowed on the sole ground that the product in question is not being used exclusively as Ostomy product. Merely because the tapes in question are being used as multiple use items, the same would not be a reason to deny the benefit of the notification. The benefit of notification cannot be denied and the appeal has to be allowed

Issues Involved:
1. Applicability of Notification No. 21/2002 for concessional rate of duty on imported 'Micropore Surgical Tapes'.
2. Classification of 'Micropore Surgical Tapes' as Ostomy products.
3. Jurisdiction of DRI to issue show cause notice.
4. Requirement of end-use certification for claiming exemption under the notification.
5. Interpretation of the notification and its terms.

Detailed Analysis:

1. Applicability of Notification No. 21/2002:
The primary issue is whether the imported 'Micropore Surgical Tapes' qualify for a concessional rate of duty under Notification No. 21/2002. The appellant claimed the benefit under Sl.No.22 of List 37 covered by Sl.No.363A of the notification, which pertains to Ostomy products.

2. Classification of 'Micropore Surgical Tapes':
The Revenue contended that the tapes were general-purpose surgical tapes and not exclusively used as Ostomy products. The appellant argued that the tapes, although capable of general use, are also suitable for Ostomy procedures and thus should qualify for the exemption. The notification does not specify that the products must be exclusively used for Ostomy purposes. The Tribunal noted that the notification's language is inclusive and does not restrict the exemption to products exclusively used for Ostomy.

3. Jurisdiction of DRI:
A significant procedural issue was the jurisdiction of DRI officers to issue the show cause notice. The matter was complicated by various judicial pronouncements, including the Supreme Court's decision in Commissioner of Customs vs. Sayed Ali and subsequent amendments to the Customs Act. The Tribunal noted that similar cases had been remanded to the adjudicating authority to decide the jurisdiction issue after the Supreme Court's decision in Mangli Impex.

4. Requirement of End-Use Certification:
The Tribunal observed that the notification does not mandate an end-use certification to claim the exemption. The appellant argued successfully that the notification's terms do not require proving exclusive use in Ostomy procedures. The Tribunal agreed, noting that the language of the notification should be interpreted literally and not be burdened with additional requirements not explicitly stated.

5. Interpretation of the Notification:
The Tribunal emphasized a liberal interpretation of the exemption notification, guided by Supreme Court precedents, which advocate for a broad-based understanding of such notifications. The Tribunal concluded that the imported 'Micropore Surgical Tapes' qualify for the exemption as they can be used for Ostomy purposes, even if they have general applications.

Judgment:
The Tribunal, by majority, set aside the impugned order and allowed the appeal, granting the benefit of the notification to the appellant. The decision highlighted that the notification's terms do not restrict the exemption to products exclusively used for Ostomy procedures and that the tapes in question, being capable of such use, qualify for the concessional rate of duty. The Tribunal also noted that the issue of jurisdiction, raised by the Technical Member, was not pressed by the appellant and thus did not affect the final decision.

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