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TMI Blog2017 (7) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... G. Shakkarwar The above stated six appeals are in respect of M/s Shanti Surgical Pvt. Ltd. involving the same issue for different periods. Therefore, these are taken together for decision. 2. Appeal No.E/1561/2008-EX[DB] is Shanti Surgical Pvt. Ltd. challenging OIO No.01/Commr./2008 dated 29/04/2008. Appeal No.E/E/1562/2008/EX-[DB] is field by Shri Shanket Kheria, Director of M/s Shanti Surgical Pvt. Ltd. challenging OIO No.01/Commr./2008 dated 29/04/2008 & Appeal No.E/1563/2008-EX[DB] is filed by Shri Subhash Chandra Kheria, GM of M/s Shanti Surgical Pvt. Ltd. challenging the personal penalty imposed on them through said OIO No.01/Commr./2008 dated 29/04/2008. Further Appeal No.E/1911/2009-EX[DB] is filed by Revenue challenging OIA No.59-CE/APPL/KNP/2009 dated 25/03/2009 and the respondent in the said appeal M/s Shanti Surgical Pvt. Ltd. Appeal No.E/2841/2010-EX[DB] is filed by Revenue challenging OIA No.288-289-CE/APPL/KNP/2010 dated 25/05/2010 and the respondent in the said appeal M/s Shanti Surgical Pvt. Ltd. Appeal No.E/1234/2012-EX[DB] is filed by Revenue challenging OIA No.15-CE/APPL/KNP/2012 dated 20/01/2012 and the respondent in the said appeal M/s Shanti Surgical Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty on the goods manufactured by them. The investigations were conducted and a Show Cause Notice C. No.V(15)OFF/ADJ/77/07 dated 30/01/2008 was issued to M/s Shanti Surgical Pvt. Ltd., Shri Shanket Kheria & Shri Subhash Chandra Kheria. The contention of Revenue in the said Show Cause notice dated 30/01/2008 was that the goods manufactured by M/s Shanti surgical Pvt. Ltd. were Wadding, Gauze, Bandages and similar articles (for example-dressings, adhesive plasters, poultices), impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes and therefore they were falling under Chapter 3005. It, therefore, appeared to revenue that M/s Shanti surgical Pvt. Ltd. failed to take registration, failed to pay appropriated duty, failed to properly maintain the records & failed to file periodical returns with the Central Excise Department. Therefore, through the said Show Cause Notice M/s Shanti Surgical Pit. Ltd. were called upon to show cause as to why Central Excise duty amounting to ₹ 1,29,02,271/(BED) + Education Cess ₹ 2,14,224/- & Higher Education Cess of ₹ 6,476/- should not be dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word "Medicated" indicated that Cotton Wool should be impregnated or coated with the pharmaceutical substance exclusively fall within the description of the goods as classified under Chapter 3005 90 10. It was further contended that Absorbent Cotton Wool manufactured and cleared by them was specifically covered in the specific entry under 56 and the classification of specific entry prevail over classification of general description. (B) Shri Shanket Kheria, Director of the party & Shri Subhash Chandra Kheria, General Manager of the party have challenged the personal penalty imposed on them. 5. In respect of Appeal No.E/1911/2009, a Show Cause Notice on the similar line was issued on 22/09/2008 wherein Central Excise duty amounting to ₹ 20,43,256/- was demanded for period subsequent to the earlier Show Cause Notice with the same contention that the goods manufactured by M/s Shanti Surgical Pvt. Ltd. were classifiable under so-called Chapter 3005. The said Show Cause Notice dated 22/09/2008 was adjudicated through Order-in-Original No.03/Combined Commissioner/2009 dated 18/02/2009 wherein the proposals in the said Show Cause Notice were confirmed. M/s Shanti Surgica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evail over the general description and granted similar relief to M/s Shanti Surgical Pvt. Ltd. Being aggrieved by the said Order-in-Appeal dated 20/01/2012 Revenue filed appeal wherein Revenue has calimed that M/s Shanti Surgical Pvt. Ltd. were manufacturing the goods which were used for medical purposes and sold in bulk packing. 8. Heard the Id. Counsel for the appellants who has submitted that in all the said Show Cause Notices issue is common. He has submitted that M/s Shanti Surgical Pvt. Ltd. were manufacturing the goods which were properly classifiable under eight (08) digit Tariff Item No.5601 21 10 which was specific but Revenue wanted to classify the same under so-called Chapter 3005 which is a title of a group of commodities where it is mentioned that "put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes." He has further taken us through the findings by Id. Commissioner (Appeals) in Order-in-Appeal No.59-CE/APPL/KNP/2009 dated 25/03/2009 on Page No.39 to 46 of the said Order-in-Appeal dated 25/03/2009 and urged that appeals filed by M/s Shanti Surgical Pvt. Ltd. and that against the personal penalty may be allowed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended to classify the said goods under Chapter Heading No.3005 on the grounds that the goods were "put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes" because appellants were selling their goods to various government hospitals and hospitals of railway and defence establishments. The first part of broad definition of Chapter Heading 3005 was not considered because the fact that the goods were not coated or impregnated with pharmaceutical substances has not been disputed. For determining the classification under Chapter Heading No.30, the department has consulted and relied upon the Section notes, the Chapter note, the explanations of HSN and the case laws of various judicial forums. On the contrary, the appellants have pleaded that the goods in question were rightly classifiable under their respective Sub-headings as claimed by them, on the basis of nomenclature. The basic submission of the appellants was that the specific entry cannot be overridden the residuary entry. In support of their contention they have relied upon various judicial pronouncements of Hon'ble Apex Court and Hon'ble Tribunal, wherein it has been settled th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 30. I have gone through the various provisions of the Central Excise Act, 1944; the Rules for interpretation; relevant provisions of Drugs & Cosmetic Act, the Standards of Weight & Measures Act, 1976, the Standards of Weight & Measures (Packaged Commodities) Rules, 1977; the samples of the goods in question produced before me and the submissions made by the appellant in the grounds of appeal and at the time of personal hearing. Before proceeding to decide the appropriate classification, let us go through the correct method to be adopted for classification. In my opinion the basics of the classification are that initially an attempt should be made to search a specific entry where the goods can be classified as per the nomenclature and the constituent material. In case no specific entry is available the next attempt should be to find the nearest entry where the goods can be classified. In case both the attempts turn to be futile then the attempt should be made to consider the end uses, the inclusion and exclusion clauses provided in the section notes, the chapter notes and the explanatory notes given the HSN. While doing so the interpretation of the said Note will depend u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other articles of wadding: 5601 21 -of Cotton 5601 21 10 ---Absorbent Cotton Wool Kg 8% 5601 21 90 ---Other Kg 8% 5601 22 00 --Of man made fibres Kg 8% 5601 29 --Other Kg 8% 5601 30 -Textile flock and dust and mill neps Kg 8% 5602 Felt, whether or not impregnated, coated, covered or laminated. It is well settled what is not excluded would be held to be included. In this regard, I would like to quote the provisions of Rule 1 of the Rules for the Interpretation which clearly provides that "1. The titles of Sections and chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes don not otherwise require, according to the provisions hereinafter contained." In the aforesaid rule there is no ambiguity and it has clearly been held that the classification has to be determined according to the terms of headings and in case of any ambiguity the Rule 2, 3 Or 4 as the case may be, shall be applied. Furthermore, the Rule 5 of aforesaid Rules again clarifies the position. For the sake c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Tariff Heading 90.24 being a Bow meter, the Tribunal committed an error of law in classifying it under Tariff Heading 90.26 as it was a letter item under the classification list." In the same order, in Para 4 the Hon'ble Bench while comparing various Chapter Headings has further noticed that "Flow meters are specifically covered in Tariff Heading 90.24. Specific excludes general, is the well-known principle. Heading 90.29 permits levy on parts or accessories which are used solely in the manufacture of one or more of the articles falling within Heading 90.24. The Assistant Collector held that the accessories imported by the appellant were used solely for the meter manufactured by the appellant. Therefore, if the meter manufactured by the appellant can be said to satisfy the description of \Tariff Heading 90.24, then by virtue of Tariff Heading 90.29 the rate of duty on the components imported by the appellant could be levied as in Tariff Heading 90.24. On the finding recorded by the Assistant Collector the end-product manufactured by the appellant being specifically provided for by 90.24, the accessory imported by the appellant which was solely used for manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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