Custom, Excise & Service Tax Tribunal
M/S. Lakshmi Technology & Engg. ... vs Cce & St, Coimbatore on 8 September, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/96/2009
(Arising out of Order-in-Appeal No. 104/2008 dated 12.11.2008 passed by the Commissioner of Central Excise (Appeals), Coimbatore)
M/s. Lakshmi Technology & Engg. Industries Ltd. : Appellant
Vs.
CCE & ST, Coimbatore : Respondent
Appearance Shri Akhil Suresh, Advocate, for the Appellant Shri B. Balamurugan, AC (AR) for the Respondent CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Date of Hearing / Decision: 08.09.2017 FINAL ORDER No. 42013 /2017 Per: B. Ravichandran The appeal is against the order dated 12.11.08 of the Commissioner (Appeals), Coimbatore. The appellants are engaged in the manufacture of articles of plastics such as Speed Indicator, Windscreen wiper, keyboard parts etc. On examination of their accounts Revenue entertained a view that they were also engaged in the manufacture and clearance of parts of ophthalmic equipments viz., Plunger & Cap and Outer body without payment of duty, on job work basis, for M/s. Aurolab, Aravind Eye Hospital, Madurai. Proceedings were initiated against the appellant to demand and recover central excise duty on such items. The appellant contested the demand. The original authority confirmed their duty liability of Rs. 2,01,479/- classifying the product under CETH 90185090. He also imposed equal amount of penalty under Section 11AC of the Central Excise Act, 1944. On appeal, vide impugned order, the Commissioner (Appeals) confirmed the order of the original authority.
2. The Ld. Counsel appearing for the appellant contested the findings of the lower authority stating that the classification proposed in the SCN was not followed by the lower authority. Apart from this, despite of recording that goods manufactured by them are semi-finished in nature, the original authority proceeded to confirm the demand. The Ld. Counsel submitted that the equipment which they make are sent to M/s. Aurolab to undergo various processes before being packed and sent to the hospital for use. These are sensitive ophthalmic equipment used in Ophthalmologic Surgery which requires high standards of sterilization. This is done at the finished stage by the Aurolab. Without this, the goods can never be marketed and as such cannot be subjected to excise levy.
3. The Ld. AR reiterated the findings of the lower authority.
4. We have heard both sides and perused the appeal records.
5. The impugned goods are admittedly medical equipment used in eye surgery. As such these are to be very precise and to undergo high degree of sterilization. Processes undertaken by M/s. Aurolab on the goods supplied by the appellants are listed by the appellant in their appeal. This was also pleaded before the original authority. M/s. Aurolab on receipt of the impugned items checked the products for dimension and standard for defects and thereafter these are subjected to ultra cleaner to remove the dust and dirt. Thereafter, the product is sent to control room again to ultrasonic cleaning using purified water so that all living organisms are removed. Then after drying of the items by purified air these are assembled and functionally checked and then packed in the pouch and sealed. The sealed pouches are again put in hot circulator chamber and kept for 5 days to remove the remains of Ethylene Oxide gas, if any. All these processes are apparently essential pre-requisite to make the product fit for marketing /use. Considering the ultimate use of the product which are specifically designed for eye surgery, we find that the product cleared by the appellant cannot be considered as excisable goods fit for marketing or use and as such cannot be brought to excise levy. The products cleared by the appellants are of semi-finished nature was also recorded by the original authority. However, he did not examine further these aspects before proceeding to classification and confirmation of demand.
6. In view of the above discussions and analysis, we find that the impugned order not sustainable. Accordingly, it is set aside and the appeal is allowed with consequential relief, if any.
(Order dictated and pronounced in the open court)
(B. RAVICHANDRAN) (SULEKHA BEEVI C.S.)
Member (Technical) Member (Judicial)
BB
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