Custom, Excise & Service Tax Tribunal
Eastern Medikit Limited vs Cce, Delhi-Iii on 12 August, 2015
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision:12.08.2015
E/Misc/55386, 55381 to 55384/2013-Ex (DB)
In Appeals Nos.E/167/2008, E/309, 1982/2010 and E/01-08/2012-EX(DB)
[Arising out of Order-in-Original No.19/CE/JM/07 dated 28.09.2007 in Appeal No.E/167/2008, Order-in-Original No.12/SSS/CE/09 dated 10.11.2009 in Appeal No.E/309/2010, Order-in-Original No.02-03/SSS/CE/10 dated 31/10/2010 in Appeal No.E/1982/2010, Order-in-Appeals No.370-377/BK/GGN/2011 dated 21.09.2011 in Appeals Nos. E/01 to 08/2012-EX(DB), passed by the Commissioner of Central Excise, Gurgaon].
Eastern Medikit Limited .Appellants
Vs.
CCE, Delhi-III Respondent
Appearance:
Rep. by none for the appellants.
Rep. by Shri A.K. Raha, Advocate, Special Counsel for the respondent. For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Coram: Honble Shri Ashok Jindal, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Orders No. 52655-52665/2015 dated:12.08.2015 Per B. RAVICHANDRAN:
There are 11 appeals filed by the appellants against the orders of the lower authorities. These appeals are taken up for decision together as the issue involved is same.
2. The brief facts of the case are that the appellants are engaged in the manufacture of medical and surgical instruments and appliances. A dispute arose regarding their eligibility for exemption for Intra Venous Cannula (IVC) and Central Venous Catheters (CVC) as per notification no.6/2003-CE as amended, read with notification no.21/2002-customs (List 37, Sl.No.34). The appellants claim is that these are covered by the entry in the notification viz. disposable and non-disposable Cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces. Various demand notices were issued to the appellants for the periods from August, 2004 to July, 2009. These notices were affirmed along with penalty. Aggrieved by the lower authoritys orders, the appellant is before us in these appeals.
3. In the appeals, the appellants contested the lower authorities findings that their product IVC is not covered by the above mentioned description for exemption. This conclusion to confirm the demands was arrived at based on the reasoning that the disposable/non-disposable cannula are to be used for aorta, vena cavae or two similar veins similar to vena cavae or for intra-corporal spaces. Reliance was placed on the opinion given by DGHS vide a letter dated 8.12.2004. In the said letter, the DGHS clarified that IVC in dispute now cannot be used in aorta or vena cavae or any other bigger blood vessels. The IVC manufactured by the appellant are used in peripheral blood vessels, which are essentially smaller vessels and are not comparable to bigger vessels and cannot be treated as similar to aorta or vena cavae. With these reasonings, the exemption for IVC manufactured by the appellant was denied. The appellant contended that the DGHSs opinion does not categorically state anything about the nature of blood vessels and the peripheral blood vessels, on which their IVCs are useable, are not discussed in the opinion or by the lower authority. It is not their case that the IVC made by them are useable for aorta or for vena cavae. The appellants main contention is that IVC manufactured by them is for blood vessels which includes all arteries and veins. This aspect has not been considered with clarity either by DGHS or by the lower authority, who relied on such DGHSs opinion.
4. The appellant also contended that the demands in respect of CVC were also not sustainable as they are nothing but different types of cannula. Certain show cause notices covered the demand consequent on denial of exemption to CV Catheters (CVC).
5. The appellants in their appeal relied on the experts opinion given by doctors to the effect that IVC is inserted into jugular vein, cephalic vein, femoral vein, basilic vein, which are structurally and functionally similar to vena cavae and drained into the same. Finally, it was pleaded that, their case is squarely covered by the ratio of the law laid down in the case of Commissioner of Central Excise, Coimbatore Vs. Saberwal Surgical (P) Ltd. reported in 2000 (117) ELT 400 (Tribunal) and Medisphere Marketing Pvt. Ltd. Vs. CCE reported in 2001 (131) ELT 608 (Tribunal-Delhi).
6. During the course of arguments, none appeared on behalf of the appellants. Shri A.K. Raha, Special Counsel for the Department supported the Revenues case for demands. He contended that though this Tribunal in the case of M/s. Becton Dickinson India Pvt. Ltd. Vs. CCE, Delhi-III - Final Order No.A-51750-51753/2015-EX dated 2.6.2015 again held in favour of the appellant on the very same issue, the present case can be distinguished. It is his submission that in the case of M/s. Becton Dickinson India Pvt. Ltd. case, the Tribunal held that denial of cross examination of DGHS officials vitiated the judicial proceedings. In the present case, there is no request for any such cross examination. Secondly, the second item - CVC is clearly a distinct product in trade and commerce and also as per Tariff and cannot be interchangeably used with Cannula as such. The appellant is not eligible for exemption under Sl.No.34 of List 37 of notification no.21/2002-Cus for CVC. The appellant originally claimed exemption under Sl.no.33 and later changed their stand to claim exemption as Cannula under Sl.No.34 itself. He further stated that the Tariff Sub-heading for Catheters of different types are 90183910 and 90183920 and whereas Cannula is under 90183930.
7. He further argued that ignoring the DGHSs opinion dated 8.12.2004, and arriving at a conclusion contrary to the same in the case of M/s. Becton Dickinson India Pvt. Ltd. (supra) by the Tribunal makes the said order as not binding in nature. It is his argument that the blood vessels similar to aorta and vena cavae are ought to be great or main blood vessel such as pulmonary artery/vein coronary artery/veins. These submissions made by the Revenue was over-looked in M/s. Becton Dickinson India Pvt. Ltd.. He insisted that the IVC in dispute is meant for peripheral blood vessels and are not covered by entry for exemption mentioned supra.
8. We have heard the Special Counsel for the Department and examined the appeal records.
9. First, we take up the case of eligibility of IVC manufactured by the appellant for exemption under entry no.34 of List 37 of notification no.21/2002-Cust read with notification no.6/2003-CE. A similar matter came up recently for decision before this Tribunal in the case of M/s. Becton Dickinson India Pvt. Ltd. (supra). The Tribunal examined at length the scope of entry at S.No.34 mentioned above and came to the conclusion that the earlier decision of the Tribunal in the case of Saberwal Surgical (P) Ltd. (supra), on an identical issue, holds good. It was also noted that the civil appeal filed against the Tribunals decision in that case was dismissed by the Honble Supreme Court reported in 2000 (121) ELT A-74 (SC). The Tribunal emphasized that the word similar used in the entry qualifies only the word veins and does not qualify the word blood vessels and thus, the expression, blood vessel has to be read independent of the preceding expression Cannula for aorta, Vena cavae and similar veins.
10. We find that that the denial of exemption to IVC manufactured by the appellants is solely based on the DGHS opinion. While DGHS elaborately discussed the difference between the aorta and vena cavae on one side and peripheral vessels at the other side, there is no clarity from the records as to what is the scope of the term that blood vessels. The IVC manufactured by the appellants are used as Cannula is not disputed. The departments contention is that the Cannula is not eligible for exemption as per the terms of the above entry. It is common knowledge that the circulatory system of the body consisted of arteries, veins and capillaries. It is also not disputed that there are different types of arteries and veins and aorta and vena cava are anatomically and physiologically different from smaller peripheral, arteries and veins. If IVC manufactured by the appellants are used in the similar such arteries and veins, the exemption is certainly eligible. The Special Counsels contention is that only Cannula used in those arteries or veins which are directly connected to the heart and which are similar to aorta or vena cavae are eligible for exemption is not supported when the full scope of the entry is examined. The terms used are ..Cannula for aorta, vena cavae and similar veins and blood vessels... This Tribunal held in the cases decided supra that the term blood vessels is to be taken independently. We follow the reasoning as the term blood vessel is preceded by a second and. If ld. Special Counsels plea is to be accepted the wordings could have been canula for aorta, vena cavae, similar veins and blood vessels. This is not the case. As pointed out in M/s. Becton Dickinson case, the exemption notification does not prescribe the degree of similarity in respect of blood vessels similar to aorta and vena cavae and in a broad sense, even peripheral veins would be similar to vena cavae as both carry deoxygenated blood from various parts of the body to heart and peripheral arteries would be similar to aorta as they carry oxygenated blood from the heart to various parts of the body. As such, considering the above discussion and earlier decisions of the Tribunal cited supra, we find that the impugned orders for denial of exemption to IVC are not sustainable.
11. Regarding the second issue, ld. Special Counsel contended that the CVC is clearly different and distinctive product and cannot be covered under the category of Cannula for the purpose of exemption under the above said notification. CVC is covered by Sl.No.33 as against Cannula covered under Sl.No.34 in the List 37. The appellants were paying duty on CVC and later claimed exemption under Sl.No.33. Further, after DGHS opinion, they changed their stand to claim exemption as Cannula.
12. We find that there are separate entries in the exemption notification for Cannula and for Catheters of different types. The appellants claim for exemption under entry no.34 in the List 37 of the Notification no.21/2002-Cus is not tenable as the entry talks about only disposable and non-disposable Cannula for various types of blood vessels and intra-corporal spaces. Entry No.33 talks about some specific type of Catheters. Except for claiming that the Catheters manufactured by them can be broadly brought under the category of Cannula, the appellant did not make any corroborative submissions we find that the CVC manufactured by the appellant are meant for delivery of drugs and monitoring of central venous pressure. The Catheters are different from Cannula in structure and function, though there may be certain overlapping in their nature of usage. As such, we find that the exemption available to Cannula as per Entry No.34 in List 37 of Notification No.21/2002-Cus cannot be extended to the CVC manufactured by the appellants.
13. In view of the above discussion and following the decisions of this Tribunal in similar cases cited above, we hold that the appellants are eligible for exemption for Cannula and not for catheters manufactured by them. All the appeals are disposed of in terms of the above conclusion.
[Operative part of the order pronounced in the open Court] ( Ashok Jindal ) Member (Judicial) ( B. Ravichandran) Member (Technical) Ckp.
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