TMI Blog2010 (9) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... d with intent to evade payment of duty Regarding penalty - The learned Commissioner is requested to reconsider the applicability of Sl. No. 267 of Notification No. 6/2002-C.E., dated 1-3-2002 (as amended) to the subject goods for the period from March, 2003 to February, 2006 in accordance with law and having regard to the relevant observations contained herein, and also to take fresh decision on all ancillary issues including the limitation issue - Appeals are disposed of - E/79-80/2008 - 1244-1245/2010 - Dated:- 16-9-2010 - S/Shri P.G. Chacko, P. Karthikeyan, JJ. REPRESENTED BY : Shri M.S. Srinivasa, Advocate, for the Appellant. Smt. Sudha Koka, SDR, for the Respondent. [Order per : P.G. Chacko, Member (J) (Oral)]. These appeals are directed against the Commissioner s order confirming demands of duty against the assessee-company (first appellant) in adjudication of two show-cause notices, one of which invoked the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act on the ground of alleged suppression of facts by the assessee with intention to evade payment of duty. The penalty equal to duty imposed on the Company under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. In the second show-cause notice dated 23-3-2007, the proposal was to deny the benefit of Notification No. 10/2006-C.E., dated 1-3-2006 (Sl. No. 28 of the Table annexed thereto) to the assessee in respect of the same product cleared from their factory during 1-3-2006 to 31-1-2007. The assessee had classified the Sutures under Heading 90.18 of the CETA Schedule and paid duty at the concessional rate of 8%. In terms of the Notification All goods (other than parts and accessories thereof) falling under Heading 90.18 ibid were chargeable to duty at the concessional rate of 8% vide Sl. No. 28 of the Table annexed to the Notification. In the above show-cause notice, the goods are allegedly classifiable as Sterilised Atraumatic Needled Sutures under CSH 3006 10 10 of the CETA Schedule and, therefore, the benefit of the Notification was proposed to be denied to the assessee. The notice also sought to levy interest on duty under Section 11AB of the Act and to impose penalty on the assessee under Rule 25 of the Central Excise Rules, 2002. In their reply to the show-cause notice, the assessee raised various points in support of classification of the goods under CSH 9018 90 19 of the CET ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the Central Excise Range Superintendent even issued certificates to the assessee to the effect that the sutures manufactured by the latter were exempt from payment of duty by virtue of Notification 6/02-C.E. (as amended). These certificates were also produced before the adjudicating authority. The learned Counsel has also referred to certain Audit Notes which pertain to the period April, 2001 to May, 2004 and contain specific mention of the assessee s claim for exemption under Notification 6/02-C.E. (as amended). On the strength of these documents, the learned Counsel has submitted that the assessee did not suppress or misdeclare or misstate any material fact with intent to evade payment of duty. All such facts were duly disclosed to the Department and, therefore, it was not open to them to invoke the extended period of limitation under the proviso to Section 11A(1) of the Act. The learned Counsel, apart from the above arguments, has also raised a feeble plea to the effect that the activity of connecting a needle with a piece of thread did not amount to manufacture for levy of duty of excise on the resultant suture. 5. In relation to the demand of duty for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, there is no evidence to show that the sutures manufactured by the appellant were put to cardio-vascular surgical purposes and, therefore, the decision of the Apex Court cannot be applied to this case. The learned SDR has also contested the plea of limitation raised by the appellant. She submits that, during the material period, the appellant was following the self-removal procedure and was expected to abide by the Central Excise Rules as a responsible manufacturer of excisable goods. The Central Excise Range Officer was not expected to certify the applicability of any exemption notification and, therefore, his certificates cannot be relied on by the appellant. It is submitted that the burden is on the manufacturer, who claims exemption, to show that his goods fall within the ambit of the exemption notification. In this case, according to the learned SDR, the appellant has not succeeded in discharging this burden. In this connection, she has claimed support from the apex court s judgment in Mysore Metal Industries v. Collector [1988 (36) E.L.T. 369 (S.C.)] wherein it was held that the burden was on the importer to prove that the goods imported by him were covered by exemption n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 in the Schedule appended to Notification No. 339/86-C.E., whereunder the manufacturer claimed exemption from payment of duty. The question arose before the apex court as to whether the sutures manufactured by the company could be held to be a surgical appliance classifiable under Heading 90.18. The Counsel for the Revenue had argued that the needle along with suturing material could not be said to be a surgical appliance classifiable under Heading 90.18 inasmuch as the suturing material stood specifically covered by Note 3 of Chapter 30 to be classified under Heading 30.05 as pharmaceutical goods not elsewhere specified . The apex court rejected the contention and held that, if the needle by itself fell within Heading 90.18 as a surgical appliance, it would not cease to be a surgical appliance by mere reason of the suturing material getting affixed thereto. Further, their lordships also observed that the intention of the Government was to grant exemption to certain life-saving and sight-saving articles manufactured in the country and, therefore, there was no reason why a narrow view should be taken to confine the surgical appliances to Heading 30.05 (SH 3005.90) rather than to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dio-vascular sutures and that this aspect is covered by the certificates issued by such hospitals. From the records, it appears that several such certificates were issued by reputed hospitals and these documents were produced before the Commissioner, but none was considered. It is for the appellant to establish that the sutures in question were meant for cardio-vascular surgeries inasmuch as their claim is in terms of Sl. No. 4 (cardio-vascular sutures) of List 37 appended to Customs Notification 21/2002 read with Sl. No. 267 of Notification 6/2002-C.E. (as amended). In their bid to establish their case, the appellant submitted the aforesaid certificates but the same are yet to be examined. In this scenario, we are of the view that the question as to applicability of Sl. No. 267 of Notification No. 6/2002-C.E. (as amended) to the goods in question for the period covered by the first show-cause notice should be considered afresh by the adjudicating authority. The plea of time-bar also relates to the same period and, therefore, this plea should desirably be reconsidered by the Commissioner. We take this view after noting that all the documents relied on by the assessee (ER-1 returns, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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