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TMI Blog2019 (4) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows : S.No.363A 90 or any Chapter The following goods namely : (A) Medical equipment (excluding Foley Balloon Catheters) and other goods, specified in List 37. List 37 S.No.22 Ostomy products (Appliances) for managing Colostomy, Illcostomy, Ureterostomy, Illeal Conduit Urostomy Stoma cases such as bags, belts, adhesives seals or discs or rolls adhesive remover, 'Skin Barriers MicroporeSurgica1 Tapes", bag closing clamps karaya seals paste or powder, irrigation sets, plastic or rubber faceplates, flanges, male or female urinary incontinence sets, skin gels, in parts or sets 3. As per the information received by DRI, Ahmedabad, Revenue entertained a view that concessional rate of 5% BCD and 'nil' CVD in terms of the said notification is being wrongly claimed by the importer, inasmuch as, the same is available only for 'Skin Barriers' Micropore Surgical Tapes" which are used as Ostomy products for managing Colostomy, Illcostomy, Ureterostomy, Illeal Conduit Urostomy Stoma and the appellants products did not fall under the said category, inasmuch as, the same are general purpose surgical tapes and not being exclusively used as Ostomy products. 4. Accordingly, inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particles to get into the wound and provided excellent skin barrier. At the same time, the tape should not be allergenic. He further deposed that the tapes imported by them had the following characteristics (i) they were microporous allowing the wound to heal, breathe and exudates; (ii) they were least allergenic and provided excellent skin barrier and allowed constant and quick permeation of air and water vapour. These surgical tapes were tested for these very qualities for strict compliance. All these properties were also mentioned in 'Hipore' brand surgical, however, in the 'Trupore' brand surgical tapes the word 'microporous' was not mentioned. He also deposed that the lead brands of surgical tapes as the Micropore and Transpore were manufactured by M/s. 3M and these products were promoted as Ostomy care products and the tapes imported by them were considered as alternative and economical substitute for the above brands respectively. The statement of the Managing Director was again recorded on 12.11.2008, wherein, he disclosed about the fact of import of fabric, which was being further converted by them into surgical tapes. In respect of the demand on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... printouts of the web page of M/s. SGV Medical, wherein in the Resources Section an article on "Life after Ostomy" had been presented and in the said article ostomy surgery viz. Colostomy, Ileostomy and Urostomy had been explained. The explanation of the surgeries was the same as described under the web page of Wikipedia reiterated above. Further it was explained in the article that learning about the products available in order to choose the right system for use was important. It had been elaborated that:- "Stomas require little care. The skin surrounding the stoma, called peristomal skin, must be protected from direct contact with discharge. This discharge is potentially irritating. The peristomal skin should be gently cleansed with plain soap (without moisturizer) that leaves no residue, and then rinsed with water after each change of your Ostomy pouching system. Water cannot enter the stoma because of its outward shape, so you won't need to cover it during bathing showering. Pouches come in different sizes and shapes to serve different functions. Today's pouches are light, odour-proof, leak proof and undetectable under clothing. Many pouches have clear or opaque option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omal skin, a skin barrier referred to as a wafer in a one piece or two piece systems was used for sticking the pouch to the abdomen. In a two-piece system, a plastic ring called flange was attached to the wafer, which fits to the pouch. In one-piece systems, the backing of the wafer was to be peeled off and was to be stuck to the abdomen and wear it as long as it remained secure and comfortable. 5. The printout of web page of M/s. HMP Communications titled as "Ostomy Wound Management' was also downloaded, as also, the web page of website of M/s. Convatec, USA. Further, the web page of web site of M/s. Medex Supply, wherein the product pouch for Ostomy Skin barriers was downloaded. From a conjoint reading of the information received from the websites, a view was entertained that the adhesive Skin Barrier Micropores Tapes/ Wafers attached to the pouches used in the wounds are the Ostomy products and adhesive skin barrier Micropores tapes cannot be considered as Ostomy appliances specifically. 6. In view of the above background, investigations were also made at other ends i.e., the distributors, sellers etc., wherein they clarified that such surgical tapes are sold over the coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opore Surgical Tapes'. The crux of the Revenue objections for denial of the said benefit is that the surgical tapes imported by the appellant are general purpose tapes and can be used for the procedures other than Ostomy. 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 Revenue has also referred to various prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts i.e., the one which are exclusively used for Ostomy, and second the general purpose products are also included. The fact of extending the exemption notification to adhesive removal skin, gels by mentioning the same in the notification, leads us to believe that even the general use items would get covered by the notification, even if a part of the same is actually used for general applications. As long as it is established that the 'Micropore Surgical Tapes' can also be used for Ostomy purposes, the same would get coverage under the said notification. It has to be observed here that the notification in question does not provide any end-use verification so as to hold that the items which are actually being used is Ostomy products, would get the exemption. 10. Our attention also stands brought to the product under reference i.e., Micropore being manufactured by M/s. 3M. The word Micropore has originated from the word "microporous", which according to Wikipedia refers to a material containing pores with diameter 2nm. Microporous materials, apart from other use are used in the first aid to fix dressings to wounds and hold pouches in place. If necessary, it may be used to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to their specific use in ophthalmic and ENT applications respectively. It is clarified that if the specified equipments are used in multiple applications in addition to their use in Ophthalmic and ENT applications respectively, the benefit of the exemption to such equipment is not to be denied." By relying upon the said circular Tribunal in the case of M/s. Wipro GE Medical Systems reported as 2005 (185) E.L.T. 321 [CESTAT-Bang.] has held as under:- "The fact that the Government wants the exemption to be extended, even when the Notification restricts the same to Ophthalmic applications, to other applications strengthens the case of the appellant as during the relevant period, there were no restriction in the notification to non-ophthalmic applications. Summing up, we hold that there is enough evidence to show that the impugned items are having A-scan facility and fall under Sl.No.351 of the Notification No. 17/2001. We also hold that the exemption Notification No. 16/2000-Cus. dated 1-3-2000 is not restricted to the equipments used in Ophthamology. If these items satisfy the conditions of Notification, the Probes, which are very necessary to use this scanner, would also be en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given their meaning and purpose may be allowed to be achieved. 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 Revenue cannot introduce the word 'solely' or 'exclusively' in the notification so as to hold that only those tapes which are exclusively used in Ostomy procedures would get the benefit. Revenue further failed to establish that there are specific surgical tapes which are meant for exclusive use as Ostomy product. According to the Revenue, the benefit is not required to be extended to the surgical tapes which can be used apart from Ostomy products, as general purpose products also. If that be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act, 1962. To overcome the situation created by the above decision of the Apex Court, Notification No. 44/2011-Cus. (NT) dated 06.07.2011 was issued by CBEC assigning the functions of the proper officer to various officers including ADG, DRI. Further, sub-section 11 was inserted under Section 28 of the Customs Act vide the Customs (Amendment and Validation) Act, 2011 dated 16.09.2011, assigning the function of proper officers to various DRI officers with retrospective effect. For the period subsequent to the amendment, the matter came up before the Hon'ble Delhi High Court in the case of Mangli Impex vs. Union of India - 2016 (335) ELT 605 (Del.) in which the Hon'ble High Court inter alia held that even the newly inserted Section 28(11) does not empower the officers of DRI to issue the show cause notice or adjudicate for the period prior to 08.04.2011. Revenue challenged the decision of the Hon'ble High Court before the Hon'ble Supreme Court and the Apex Court stayed the judgment in the case of Mangli Impex vs. UOI reported as 2016 (339) ELT A49 (SC). However, on the same issue, Hon'ble Mumbai High Court as well as the Hon'ble High Court of Telengana & A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration, I find that there is no difference of opinion between two Members on the issue on the dispute per se. In case, I agree with the Member (Judicial), the issue decided by Member (Technical) would have to be totally left out as untouched and vice versa. A third Member is called upon to agree or disagree with the reason or conclusion made by both members on a particular point. The point being divergent before me, I am unable to agree or disagree. To me, the right resolution of the present situation would be to relist the matter for rehearing. However, as per Section 129C the third Member does not have power to relist or rehear the appeal but can only agree or disagree. For this reason, I am of the view that the Hon'ble President is to decide whether to relist the matter for hearing of both sides. The ld. counsel for appellant Shri S. Jaikumar has placed before me a decision in Amod Stampings Pvt. Ltd Vs. Commissioner of Customs - 2013 (289) ELT 421 (Guj.) to argue that when the points of reference framed by the Members is unclear, the matter can be sent back to the same Bench for reformulating the difference. I do not think that the problem is with formulation of the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R appearing for the department. However, the Hon'ble President has stated that the matter need not be relisted before a Division Bench. As per the direction of the Hon'ble President I proceed to decide the difference of opinions in this appeal. 22. The points of difference referred are as under:- (i) Whether the appeal is to be decided on merit and allowed as held by the Ids Member (Judicial)? Or (ii) Whether the impugned order is to be set aside and the matter remanded for decision on merit by the adjudicating authority after the availability of the decision of the Hon'ble Supreme Court in the case of Mangli Impex? 23. The issue in the appeal is with regard to the eligibility of concessional rate of duty on the goods imported by the appellant. Though the appellant has imported items such as non-woven fabrics and Skin Barriers Micropore Surgical Tapes, the dispute in this appeal is confined to the concessional rate of duty on Skin Barriers Micropore Surgical Tapes. The liability to pay merit duty on non-woven fabrics has been admitted by the ld. counsel for the appellant. The facts already having been narrated in detail by the Member (Judicial), I do not think it n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority has rightly disallowed the eligibility of the notification. She heavily relied upon the medical literature obtained from the website to explain that adhesive Skin Barrier Micropore Surgical Tapes / Wafers which has stoma and can be aligned or attached to pouches alone are the products to which the notification would apply. It is also submitted by her that in the packaging of the impugned goods, it is not mentioned that these are exclusively used for ostomy procedures. 26. Heard both sides. 27. On perusal of the order passed by Ld. Judicial Member, it is seen that all the contentions raised by both sides, as noted above, have been discussed in detail. In page 6 of the said order, the medical literature obtained from website with regard to the Skin Barriers Micropore Surgical Tapes / Wafers used in the ostomy procedures and contentions of Revenue are stated. The ld. AR has emphasized that such products which can protect the skin from direct contact of the discharge from the body would only be covered under the notification. Thus, the main ground on which the benefit of notification is denied by the department is on the view that the Skin Barrier Micropore Surgical Tapes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be governed wholly by the language of notification, equity or intendment having no place interpretation of notification. 30. In List 37, it is not mentioned that the Skin Barrier Micropore Surgical Tapes have to be exclusively used for ostomy procedures. There are other products also which can be used for procedures other than ostomy. None of these products which can be used for general purpose are qualified by stating that the eligibility is available if they are used' only for ostomy. At the cost of repletion, there is no condition attached to the notification to produce end use certificate. Then nothing can be read into the notification to interpret that only goods which are exclusively used for ostomy procedures are eligible for exemption. Although Sl. No. 22 of List 37 in the notification starts with the words "ostomy products (appliances) for managing Colostomy, Illcostomy, Ureterostomy....", since there are goods such as adhesive remover, skin gel etc. which are not exclusively used for ostomy, the benefit will be eligible to the Skin Barrier Micropore Surgical Tapes imported by the appellants. 31. Therefore, I agree with the ld. Judicial Member in holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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