2025 (6) TMI 1850 - AT - Customs

Eligibility for benefit under of concessional rate of CVD as per Sl.No.28 of the Notification No.02/2011-CE dated 01.03.2011 - imported Powdered Latex Examination Gloves - denial of benefit only on the ground that in the import documents the word medical examination is not mentioned - HELD THAT - The appellant rebutting the finding of the learned Commissioner (Appeals) placed a copy of the certificate dated 14.02.2014 issued by the supplier whereunder it certified that the product in question is only for medical examination purpose. It is also found that the appellant has imported similar gloves from the same supplier through other Commissionerates and it has been assessed to duty allowing concessional rate of CVD under N/N. 2/2011 dated 01.03.2011. Besides it is found that this Tribunal in similar circumstances case of CC Cochin Vs. Midland Latex Products Ltd. 2001 (2) TMI 364 - CEGAT BANGALORE observed that We have carefully considered the submissions made by both sides with reference to the facts. Nothing has been brought on record to substantiate the claim of the revenue that the item in question cannot be used in medical examination. On going through the impugned order we find that the point at issue has been properly analysed by the Commissioner (Appeals) as can be seen from para 6 of the order. There are no merit in the impugned order. Consequently the impugned order is set aside and the appeal is allowed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal question considered by the Tribunal was whether the imported goods described as "Powdered Latex Examination Gloves" in the Bill of Entry No.4591660 dated 10.02.2014 qualify for the concessional rate of Countervailing Duty (CVD) under Notification No.2/2011-CE dated 01.03.2011. Specifically, the issue was whether these gloves fall within the category of "Surgical rubber gloves or medical examination rubber gloves" as per Sl.No.28 of the Notification, given that the import documents did not explicitly state that the gloves were for medical examination purposes. The Tribunal also considered the relevance and sufficiency of a certificate from the supplier attesting that the gloves are intended for medical examination use, and the applicability of precedents relating to the interpretation of exemption notifications concerning medical examination gloves.

2. ISSUE-WISE DETAILED ANALYSIS

Issue: Eligibility of imported "Powdered Latex Examination Gloves" for concessional CVD rate under Notification No.2/2011-CE dated 01.03.2011.

Relevant Legal Framework and Precedents: The Notification No.2/2011-CE provides concessional duty rates for certain goods, including "Surgical rubber gloves or medical examination rubber gloves" under Sl.No.28 of Chapter 4015. The legal principle of strict interpretation of exemption notifications was invoked by the Revenue, consistent with established case law that such notifications must be construed narrowly. The Tribunal referred to the precedent set in the case of CC, Cochin Vs. Midland Latex Products Ltd., where it was held that the concessional rate applies only to medical examination gloves and not to general-purpose examination gloves. The Supreme Court's decision in Central Excise Bombay v. Handicraft Exports was also cited, emphasizing that exemption notifications are specific and the burden of proof lies on the importer to demonstrate that the goods qualify.

Court's Interpretation and Reasoning: The Tribunal noted that the Revenue's denial of benefit was solely on the ground that the import documents did not explicitly mention "medical examination" as the intended use. The Tribunal examined the supplier's certificate dated 14.02.2014, which certified that the gloves were exclusively for medical examination purposes and conformed to relevant standards. The Tribunal also considered the fact that similar imports from the same supplier had been allowed concessional rates by other Commissionerates. The Tribunal observed that the term "Examination Gloves" in common parlance and packaging generally implies medical examination gloves, and the absence of the explicit term "medical" in the Bill of Entry should not negate the eligibility for exemption.

Key Evidence and Findings: The critical evidence included the supplier's certificate stating the medical examination use of the gloves, the consistent classification and duty treatment of similar imports, and the Tribunal's prior ruling in Midland Latex Products Ltd. The Tribunal found no evidence from the Revenue to contradict the claim that the gloves were for medical examination. The Tribunal also noted that the gloves met ASTM standards and were used in medical diagnostic and therapeutic procedures.

Application of Law to Facts: Applying the strict interpretation principle, the Tribunal nonetheless found that the description "Powdered Latex Examination Gloves" and the supplier's certification sufficed to establish that the gloves were medical examination gloves. The Tribunal distinguished the Revenue's narrow focus on the absence of the word "medical" in the import documents as an overly literal approach that ignored the substance and commercial reality. The Tribunal relied on the precedent that the exemption applies to goods described as medical examination gloves and that "examination" in this context generally means medical examination.

Treatment of Competing Arguments: The Revenue argued that without explicit mention of "medical examination" in the import documents, the goods could not be granted exemption. They relied on the principle of strict interpretation of exemption notifications and the HSN notes. The appellant countered by producing the supplier's certificate, pointing to consistent treatment of similar goods, and relying on Tribunal precedent. The Tribunal found the appellant's arguments more persuasive and the Revenue's objections unsubstantiated by evidence.

Conclusions: The Tribunal concluded that the imported gloves qualified as "medical examination rubber gloves" under the Notification and were thus eligible for concessional CVD rates. The absence of the explicit phrase "medical examination" in the Bill of Entry was not determinative, especially in light of the supplier's certification and consistent past practice. The impugned orders denying the benefit were set aside.

3. SIGNIFICANT HOLDINGS

The Tribunal held that:

"When the goods are described on the packages as well as in all the clearance documents as 'Latex Examination Gloves' the expression 'Examination' in the context can normally mean only medical examination. Therefore, in common parlance also, the item has to be understood only as Medical Examination Gloves only. The absence of the term 'medical' in the description cannot be taken to give a different meaning other than what is generally understood."

It was further held that the Notification No.2/2011-CE dated 01.03.2011 at Sl.No.28 covering "Surgical rubber gloves or medical examination rubber gloves" must be interpreted in light of the nature and use of the goods rather than a rigid requirement of explicit mention in import documents.

The Tribunal reaffirmed the principle that exemption notifications are to be strictly construed but also recognized that where the nature and end-use of the goods are established by credible evidence such as supplier certification and consistent past practice, the benefit of exemption should be granted.

The final determination was that the appellant's imported "Powdered Latex Examination Gloves" are eligible for the concessional rate of CVD under Notification No.2/2011-CE dated 01.03.2011, and the impugned orders denying such benefit were set aside with consequential relief.