TaxTMI 
TaxTMI 
2010 (9) TMI 744
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....him under Rule 26 of the said Rules. 2. In show-cause notice dated 31-1-2007, the Department proposed to deny the benefit of exemption under Notification No. 6/2002-C.E., dated 1-3-2002 (as amended) to the assessee for the period 1-3-2003 to 28-2-2006 in respect of goods manufactured and cleared as "Sterilised Atraumatic Needled Sutures" classified by them under sub-heading 3006.10 of the Central Excise Tariff Act (CETA) Schedule. These goods had been cleared by claiming exemption under Notification 6/2002-C.E. (as amended) (Sl. No. 268 of the Table annexed thereto) whereunder the effective rate of duty was 'Nil' for "medical equipment and other goods, specified in List 38 appended to Notification No. 21/2002-Cus., dated 1-3-2002", and falling under "Chapter 90 or any other Chapter" of the CETA Schedule. In List 38 ibid, one of the commodities mentioned at Sl. No. 5 was "atraumatic needles and sutures". During the period covered by the above show-cause notice, the assessee claimed the benefit of 'Nil' rate of duty in terms of List 38 appended to Customs Notification No. 21/2002 read with Entry No. 268 of Central Excise Notification No. 06/2002-C.E. (as amended). The show-ca....
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....aised in the show-cause notice was confirmed against the assessee and penalty was imposed on them. 4. We have examined the records and heard both sides. In so far as the Revenue's case covered by the first show-cause notice is concerned, the focus is on the Notification, there being no debatable issue with regard to classification of the goods as the assessee's claim for exemption from payment of duty is under an entry of the notification which covers medical equipments falling in Chapter 90 or "any other chapter". Though, during the relevant period, the assessee claimed under Sl. No. 268 of Notification No. 6/02-C.E. (as amended), they raised an alternative plea also before the adjudicating authority, which was to the effect that, in the event of the benefit not being allowed in terms of Sl. No. 268 ibid, it should be allowed in terms of Sl. No. 267 of the table annexed to the same Notification. Before us, the learned Counsel has focused on the alternative plea inasmuch as the goods in question are cardio-vascular sutures while the benefit of exemption under Sl. No. 268 (which was claimed in the reply to the show-cause notice) is admissible to only opthalmic equipments lik....
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....occasion to examine the distinction between "cardio-vascular sutures" and "atraumatic needled sutures" in the context of their classification under the CETA Schedule and it was held that it was not correct to say that a needle along with suturing material was not a surgical appliance and further 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 a suturing material being affixed thereto. The learned Counsel has also claimed support from the apex court's decision in the context of claiming the benefit of Notifications 6/2002 (as amended) and 10/2006. 6. The learned SDR has, apart from reiterating the findings of the adjudicating authority, relied heavily on HSN Explanatory Notes. She has referred to Chapter Note 4(a) in HSN Chapter 30, which reads thus : "Heading No. 30.06 applies only to the following, which are to be classified in that heading and no other heading of the Nomenclature : (a) Sterile surgical catgut, similar sterile suture materials and sterile tissue adhesives for surgical wound closure". According to the learned SDR, Tariff Heading 30.05 being aligned with HS....
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....e has also shown us a sample of the suture in loose form. The suture in question consists of a curved metallic needle with a piece of thread firmly attached to its wider end. 8. We have considered the submissions. There is no classification dispute for the period 1-3-2003 to 28-2-2006 covered by the first show-cause notice. For this period, the only issue to be considered is whether the assessee was entitled to claim the benefit of 'Nil' rate of duty under Sl. No. 267 of the table annexed to Notification 6/02 (as amended). Though the assessee claimed the benefit of 'Nil' rate of duty in terms of Sl. No. 268 in the reply to the show-cause notice, their counsel has, at the bar, shifted the focus to Sl. No. 267 in view of the fact that the benefit under Sl. No. 268 is applicable only to opthalmic equipments and that the goods were actually marketed as general purpose surgical sutures as evidenced by the samples shown by him. We shall, therefore, address the applicability of Serial No. 267 to the subject goods. Under this entry, medical equipments (falling in Chapter 90 or any other chapter of the CETA Schedule) specified in List 37 appended to Customs Notification 21/02 dated ....
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....laiming support from HSN Notes, that all sterile suturing materials used for closure of wounds are necessarily to be classified under Heading 30.05 (upto 28-2-2005)/30.06 (thereafter). As rightly submitted by the learned Counsel, there is a lot of difference between 'suture' as a finished surgical appliance on the one hand and 'suturing material' on the other. In the present case, undisputedly, the thread in coils was imported by the assessee and the needles were indigenously procured. We can say that the imported material is a suturing material. We can as well say that the metal or the alloy of metals, out of which the needles were made, is also a suturing material. But a finished needle with a chosen length of thread attached to it would stand on a different footing. We have no doubt in our mind that the fixing of a chosen length of the thread to the wider end of the curved needle results in the emergence of a surgical appliance, which is the goods under classification today. This commodity is not to be confused with mere surturing material referred to in the HSN Explanatory Notes mentioned bv the SDR. Claiming support from the apex court's decision, we hold that a suture consist....