TMI Blog2017 (7) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ls are in respect of M/s Shanti Surgical Pvt. Ltd. involving the same issue for different periods. Therefore, these are taken together for decision. 2. Appeal No.E/1561/2008-EX[DB] is Shanti Surgical Pvt. Ltd. challenging OIO No.01/Commr./2008 dated 29/04/2008. Appeal No.E/E/1562/2008/EX-[DB] is field by Shri Shanket Kheria, Director of M/s Shanti Surgical Pvt. Ltd. challenging OIO No.01/Commr./2008 dated 29/04/2008 Appeal No.E/1563/2008-EX[DB] is filed by Shri Subhash Chandra Kheria, GM of M/s Shanti Surgical Pvt. Ltd. challenging the personal penalty imposed on them through said OIO No.01/Commr./2008 dated 29/04/2008. Further Appeal No.E/1911/2009-EX[DB] is filed by Revenue challenging OIA No.59-CE/APPL/KNP/2009 dated 25/03/2009 and the respondent in the said appeal M/s Shanti Surgical Pvt. Ltd. Appeal No.E/2841/2010-EX[DB] is filed by Revenue challenging OIA No.288-289-CE/APPL/KNP/2010 dated 25/05/2010 and the respondent in the said appeal M/s Shanti Surgical Pvt. Ltd. Appeal No.E/1234/2012-EX[DB] is filed by Revenue challenging OIA No.15-CE/APPL/KNP/2012 dated 20/01/2012 and the respondent in the said appeal M/s Shanti Surgical Pvt. Ltd. all the Orders-in-Appeals are pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .30/2004 dazed 09/07/2004. On visit of the manufacturing premises it appeared to Officers of Central Excise that M/s Shanti Surgical Pvt. Ltd. should have registered with the Central Excise Department since it appeared to them that the goods manufactured by them were inappropriately classified under Chapter 56. Further, the claim by M/s Shanti Surgical Pvt. Ltd. that some of the goods manufactured by them were classifiable under Chapter 52 which attracted nil rate of duty as per tariff and same were classifiable under Chapter 38 which were eligible for benefit of Notification No.30/2004-CE dated 09/07/2004 did not appear to be tenable to the Officers of Central Excise. It appeared to Revenue that M/s Shanti Surgical Pvt. Ltd. should have registered themselves with Central Excise Department and should have paid Central Excise duty on the goods manufactured by them. The investigations were conducted and a Show Cause Notice C. No.V(15)OFF/ADJ/77/07 dated 30/01/2008 was issued to M/s Shanti Surgical Pvt. Ltd., Shri Shanket Kheria Shri Subhash Chandra Kheria. The contention of Revenue in the said Show Cause notice dated 30/01/2008 was that the goods manufactured by M/s Shanti surgical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. and through Order-in-Original dated 29/04/2008 confirmed the demand of ₹ 58,86,591/- and imposed equal penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. He dropped the demand for an amount of ₹ 72,36,180/-. Further, he imposed penalty of ₹ 5,00,000/- each on Shri Shanket Kheria, Director of the party Shri Subhash Chandra Kheria, General Manager of the party under Rule 26 of the Central Excise Rules, 2002. Aggrieved by the said OIO No.1/Commr./2008 dated 29/04/2008 appellants filed these appeals before this Tribunal. 4. The grounds of appeal are as follows:- (A) The Original Authority should have appreciated the fact that Chapter 3005 90 10 with effect from 01/04/2005 specified Cotton Wool, Medicated, and after Cotton Wool the use of the word Medicated indicated that Cotton Wool should be impregnated or coated with the pharmaceutical substance exclusively fall within the description of the goods as classified under Chapter 3005 90 10. It was further contended that Absorbent Cotton Wool manufactured and cleared by them was specifically covered in the specific entry under 56 and the class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue filed appeal before this Tribunal. The grounds of appeal are that the goods manufactured by M/s Shanti Surgical Pvt. Ltd. are used for medical purposes and are sold in bulk pack and therefore, they should have classified under so-called Chapter 3005. 7. Another Show Cause Notice 31/08/2010 in respect of Appeal No.E/1234/2012 was issued demanding Central Excise duty amounting to ₹ 5,24,913/-. The same was adjudicated through Order-in-Original No.20/C.Ex./Additional Commissioner/2010 dated 01/09/2011 wherein the proposals of the Show Cause Notice was confirmed. The same was challenged before Commissioner (Appeals). The Id. Commissioner (Appeals) decided the appeal through Order-in-Appeal No.15-CE/APPL/KNP/2012 dated 20/01/2012 wherein Id. Commissioner (Appeals) passed a similar order holding that specific entry will prevail over the general description and granted similar relief to M/s Shanti Surgical Pvt. Ltd. Being aggrieved by the said Order-in-Appeal dated 20/01/2012 Revenue filed appeal wherein Revenue has calimed that M/s Shanti Surgical Pvt. Ltd. were manufacturing the goods which were used for medical purposes and sold in bulk packing. 8. Heard the Id. Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... textiles items Viz. 5601, 5203 and various Sub-headings of Chapter 58 whereas, the department has ordered for classification of aforesaid goods under Chapter 30, specifically under various headings of Chapter No.3005. The period of dispute is Financial Year 2007-08. On going through the entire order, I notice that the dispute relating to classification of Sanitary Napkins and duty liability on syringes was settled upto the satisfaction of the appellants and controversy regarding classification of said items rests settled. I also notice that the impugned order has been passed while deciding the Show Cause Notice that was issued in continuation to one earlier Show Cause Notice issued for the period from Financial Years 2003-04 to 2006-07. I further observe that the department has intended to classify the said goods under Chapter Heading No.3005 on the grounds that the goods were put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes because appellants were selling their goods to various government hospitals and hospitals of railway and defence establishments. The first part of broad definition of Chapter Heading 3005 was not considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the appellants started classifying the said goods under the said tariff heading. However, the goods continued to remain exempt by virtue of conditions contained in Notification No.30/2004. After going through the discussions and finding portion of the impugned order, I have observed that the department instead of classifying the goods under the specific CSH as per their nomenclature and the material used therein has resorted to consider various Section notes, Chapter notes, HSN explanations and end use of the goods. The use of letter 'IP' standing for Indian Pharmacopoeias on the packing material and the fact that the appellants were having Drug Licence issued under Drugs Cosmetic Act, has also been made a base for classification of goods under the aforesaid Chapter 30. I have gone through the various provisions of the Central Excise Act, 1944; the Rules for interpretation; relevant provisions of Drugs Cosmetic Act, the Standards of Weight Measures Act, 1976, the Standards of Weight Measures (Packaged Commodities) Rules, 1977; the samples of the goods in question produced before me and the submissions made by the appellant in the grounds of appeal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3005 10 90 ---Other Kg 16% 3005 90 -Other: 3005 90 10 ---Cotton Wool, Medicated Kg 16% 3005 90 20 ---Poulitice of Kaolin Kg 16% 3005 90 30 ---Lint, Medicated Kg 16% 3005 90 40 ---Bandages Kg 16% 3005 90 50 ---Burn therapy dressing soaked in protective gel Kg 16% 3005 90 60 ---Micro pores surgical tapes Kg 16% 3005 90 70 ---Corn removers and callous removers Kg 16% 3005 90 90 --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5601 30 -Textile flock and dust and mill neps Kg 8% 5602 Felt, whether or not impregnated, coated, covered or laminated. It is well settled what is not excluded would be held to be included. In this regard, I would like to quote the provisions of Rule 1 of the Rules for the Interpretation which clearly provides that 1. The titles of Sections and chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes don not otherwise require, according to the provisions hereinafter contained. In the aforesaid rule there is no ambiguity and it has clearly been held that the classification has to be determined according to the terms of headings and in case of any ambiguity the Rule 2, 3 Or 4 as the case may be, shall be applied. Furthermore, the Rule 5 of aforesaid Rules again clarifies the position. For the sake convenience the provisions of sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 being a Bow meter, the Tribunal committed an error of law in classifying it under Tariff Heading 90.26 as it was a letter item under the classification list. In the same order, in Para 4 the Hon'ble Bench while comparing various Chapter Headings has further noticed that Flow meters are specifically covered in Tariff Heading 90.24. Specific excludes general, is the well-known principle. Heading 90.29 permits levy on parts or accessories which are used solely in the manufacture of one or more of the articles falling within Heading 90.24. The Assistant Collector held that the accessories imported by the appellant were used solely for the meter manufactured by the appellant. Therefore, if the meter manufactured by the appellant can be said to satisfy the description of \Tariff Heading 90.24, then by virtue of Tariff Heading 90.29 the rate of duty on the components imported by the appellant could be levied as in Tariff Heading 90.24. On the finding recorded by the Assistant Collector the end-product manufactured by the appellant being specifically provided for by 90.24, the accessory imported by the appellant which was solely used for manufacture of it was liable to be cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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