TaxTMI 
TaxTMI 
2015 (6) TMI 335
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....missioner, by which he has confirmed duty demand of Rs. 1,23,36,635/- against the appellant for the period from August 2004 to July 2005. The show cause notice for this demand had been issued on 08/9/05. 1.2 Appeal No. E/2652/08 is against order-in-original dated 18/8/08 passed by the Commissioner by which duty demand of Rs. 1,80,07,091/- has been confirmed against the appellant for the period from December 2006 to October 2007. The show cause notice which had been adjudicated had been issued on 03/12/07. 1.3 Appeal No. E/488/10 is against Commissioner s order dated 01/12/09 confirming duty demand of Rs. 1,94,47,533/- for the period from November 2007 to August 2008. The show cause notice for this duty demand has been issued on 27/11/08. 1.4 The facts leading to filing of these appeals are, in brief, as under. 1.4.1 The appellant company manufactures of Intravenous Cannula (IV Cannula) under the brand name Venflon and Neoflon. The period of dispute, as mentioned above, is from March 2003 to August 2008. During the period of dispute, Notification No. 6/03-CE dated 01/3/03 and its Successor Notification No. 6/06-CE dated 01/6/06 exempted from the whole of the Basic Excise....
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....s letter dated 08/12/04 opined that the Venflon Cannula being primarily used in peripheral veins and arteries for the purpose of blood sampling, blood transfusion, drug infusion etc. cannot be treated as the Cannula for aorta, vena cavae and similar veins and blood vessels or the Cannula for intra-corporal spaces, as peripheral blood vessels cannot be treated as blood vessels similar to Aorta or vena cavae. It is on this basis that the proceedings were initiated by the show cause notices mentioned above for denying the duty exemption under Notification No. 6/03-CE dated 01/3/03 and its successor notification and for demand of duty which resulted in passing of the adjudication orders, mentioned above, by which the above-mentioned duty demands has been confirmed. Against these orders of the Commissioner, these appeals have been filed. 2. Heard both the sides. 3. Shri Ravinder Narain, Advocate, the learned Counsel for the appellant, pleaded that the issue involved in this case is squarely covered by the decisions of the Tribunal in the cases of CCE, Coimbatore vs. Saberwal Surgical (P) Ltd. reported in 2000 (117) E.L.T. 400 (Tri.), and also in the case of Medisphere Marketing P.....
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....doctrine of merger, to be followed in subsequent cases, that in the case of V.M. Salgaocar & Bros. (P) Ltd. vs. Commissioner of Income Tax reported in (2000) 5 SCC 373, the Apex court has held that when appeal is dismissed by the Apex court, even if by a non-speaking order, the doctrine of merger applies, that the Apex court in another judgment in the case of Waman Rao vs. Union of India reported in (1981) 2 SCC 362 has held that it is sufficient for invoking the Rule of stare decisis that a certain decision was arrived at on a question which arose or was argued, no matter on what reason the decision rests or what is the basis of the decision, or in another words, for the purpose of applying the Rule of stare decisis, it is unnecessary to inquire or determine as to what was the rationale of the earlier decision which is said to operate as stare decisis, that in view of this, the decision of the Tribunal in the case of CCE, Coimbatore vs. Saberwal Surgical (P) Ltd. (supra) which has been affirmed by the Apex court by the way of dismissal of the Government civil appeal, becomes a binding precedent, that in view of this, in the expression the disposable and non-disposable Cannul....
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....o Section 11A (1) would not be applicable and for the same reason to the fact that provision of Section 11AC would not be invokable. 4. Shri A.K. Raha, Advocate, the learned Counsel for the Revenue, pleaded that the point of dispute in this case is as to whether in the entry disposable and non-disposable Cannula for aorta, vena cavae and similar veins and blood vessels and Cannula for intra-corporal spaces , the word similar would quantify the expression blood vessels also or whether the expression blood vessels is to be read independently of the expression disposable and non-disposable for Cannula for aorta, vena cavae and similar veins , that this point has not been examined at all in the Tribunal s earlier judgment in the case of CCE, Coimbatore vs. Saberwal Surgical (P) Ltd. (supra) and conclusion on this point has been arrived at without any discussion, that for this reason only the Tribunal in respect of stay application filed in appeal No. E/2652/2008 filed by this appellant had vide order dated 12/05/09 reported in 2009 (242) E.L.T. 584 (Tri. Del.) ordered 100% pre-deposit and had refused to grant un-conditional waiver and ....
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.... produced, that the appellant had concealed the relevant facts from the Department and have deliberately availed of the exemption for which they are not eligible and, hence, longer limitation period under proviso to Section 11A (1) has been correctly invoked and penalty under Section 11AC has been correctly imposed, and that cross examination of Dr. P. Ravindran, ADG (M), DGHS was not required as his opinion is not in respect of a particular assessee and, hence, denial of cross examination has not vitiated the proceeding in any manner. With regard to the appellant s plea that since the Tribunal s judgment in the case of CCE, Coimbatore vs. Saberwal Surgical (P) Ltd. (supra) stands affirmed by the Apex Court by dismissal of the Government civil appeal and, hence, by virtue of the doctrine of merger, the Tribunal s judgment in the case of CCE, Coimbatore vs. Saberwal Surgical (P) Ltd. (supra) stands merged with the Apex court s judgment order dismissing the civil appeal and, hence, this order of the Apex court is a binding precedent, Shri Raha pointed out to the findings of the Tribunal in its order dated 12/5/09 reported in 2009 (242) E.L.T. 584 (Tri. Del.) in respect of stay applic....
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....ins and blood vessels and Cannula for intra-corporal spaces . The point of dispute is as to whether the IV Cannula being manufactured by the appellant are covered by the above entry in list 37 of Notification No. 21/02-CUS. The Department s contention is that this entry covers only the three types of Cannula (a) disposable and non-disposable Cannula for aorta and vena cavae; (b) disposable and non-disposable for Cannula for veins and blood vessels similar to aorta and vena cavae and (c) Cannula for intra-corporal spaces. According to the Department, in view of the opinion of Dr. P. Ravindran dated 08/12/04, ADG, Directorate General of Health Services, the Cannula being manufactured by the appellant are not the Cannula meant either for aorta and vena cavae or for similar veins and blood vessels. Thus according to the Department the IV Cannula being manufactured by the appellant are not covered in the list 37 of the exemption Notification No. 21/02-CUS and, hence, are not eligible for exemption under Notification No. 6/02-CE and its successor notifications. 7. The appellant s plea, on the other hand, is that the entry in list 37 of Notification No. 21/02-CUS covers (a) disposable ....
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....he Department s contention is that the IV Cannula, in question, can be used only for peripheral veins/arteries and cannot be used for aorta and vena cavae or for similar veins or arteries. It is the contention of the Department that the veins similar to vena cavae are the four pulmonary veins and the arteries similar to aorta are the pulmonary arteries and, hence, the IV Cannula, in question, are not covered by the above-mentioned entry. It has been pleaded on behalf of the Department that the opinion of the DGHS on the question as to whether the IV Cannula, in question, can be used for arteries and veins similar to aorta and vena cavae is binding on the Department and there was no need for cross examination of the official of DGHS who had given this opinion. It has also been pleaded by the Department that the expression similar veins and blood vessels in the entry must be construed in ejusdem generus with preceding expression and, therefore, this expression would cover only those IV Cannula which are meant for veins and arteries similar to aorta and vena cavae. With regard to the judgment of the Tribunal in the case of CCE, Coimbatore vs. Saberwal Surgical (P) Ltd. (su....
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....the one used for blood vessels as can be seen from the various certificates produced. Now, we are required to see as to whether the item satisfy the term Cannula . On a perusal of the certificates, it is clear that the item does satisfy the term Cannula. As there is no claim for its use for aorta, vena cavae and similar veins , therefore we are required only to see whether the same is being used for blood vessels . Both the sides have produced large number of certificates which would help in the determination of this aspect of the matter" Accordingly, on the basis of the certificates of various experts certifying that the scalp vein infusion sets, in question, are Cannula which can be used for blood vessels, the Tribunal held that the same would be eligible for exemption. In the same para, the Tribunal s has accordingly given a finding on perusal of all the certificates from both the sides, a clear string of opinion is in favour the respondents and the item having satisfied the term Canula and it is used in blood vessels, therefore, the Commissioner (Appeals) having granted the benefit is totally justified . Thus, the Tribunal in this order has held....
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.... to be a fit case for exercise of its jurisdiction under Article 136 of the Constitution. That certainly could not be so when an appeal is dismissed though by a non-speaking order. Here the doctrine of merger applies. In that case, the Supreme Court upholds the decision of the High Court or of the Tribunal from which the appeal is provided under clause (3) of Article 133. This doctrine of merger does not apply in the case of dismissal of a special leave petition under Article 136" Thus, in this judgment the Apex court has held that when civil appeal filed against order of the Tribunal or lower court has been dismissed by the Apex court, even if without giving any reasons, the doctrine of merger would apply and the order of the Tribunal or lower court has to be treated as upheld by the Apex court and becomes a binding precedent. 8.1 This question was also examined by the Constitutional Bench of the Apex court in the case of Waman Rao vs. Union of India reported in (1981) 2 SCC 362, wherein the Apex court has examined, in detail, the question as to whether dismissal by the Apex court without giving any reasons of the appeal against an order of the Tribunal or a High Court would....
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....ejusdem generus with preceding expression and that in view of the Apex court s judgment in the cases of Liberty Oil Mills (P) Ltd. vs. CCE, Bombay reported in 1995 (75) E.L.T. 13 (S.C.), and Novopan India Ltd. vs. CCE, Hyderabad reported in 1994 (73) E.L.T. 769 (S.C.), while interpreting an exemption notification, in case of doubt, the benefit has to go to the Revenue and that these points were not considered by the Tribunal in the case of CCE, Coimbatore vs. Saberwal Surgical (P) Ltd. (supra) and by the Apex court, is not acceptable, as once the Tribunal s judgment has been affirmed by the Apex court by the way of dismissal of the civil appeal, even if without giving any reasons, that becomes a binding precedent and in view of the Apex court s judgment in the case of Waman Rao vs. Union of India (supra) for applying the principle of stare decisis it is unnecessary to enquire or determine as to what was the rationale of the earlier decision which is said to operate as stare decisis. As regards the Tribunal s stay order dated 12/5/09 in respect of an appeal filed by the Appellant involving an identical issue wherein the Tribunal expressing a contrary prima facie view, has ordered pr....
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....n of DGHS, however, in his opinion has nowhere discussed as to which are the arteries and veins similar to aorta and vena cavae. In this regard, the opinion dated 08/12/04 of Dr. P. Ravindran reproduced in para 6 of the impugned order is reproduced below:- "6. The Directorate General of Health Services (DGHS), vide their letter No. Z-36011/12/98-MG dated 08/12/2004, have given the following expert opinion in the matter : Z-36011/12/98-MG dated 08/12/2004 Dte. General of Health Services (Medical General) I am directed to refer to your letter number C. No. IV (15) Hqrs. AE/D-III/11/2004-1955 dated 09/9/2004 and convey that the matter has been re-examined in the Directorate in consultation with experts in the field of Anatomy, Surgery, Neuro-Surgery, Cardio-thoracic Surgery and Anaesthesia from Central Government Hospitals. The opinion given by the experts is given below : (i) IV Cannula (Venflon, Neoflon etc.) are primarily used in the peripheral veins and arteries for the purpose of blood sampling, blood transfusion, single and multiple drug infusion, arterial pressure monitoring etc. (ii) Aorta and vena cavae are not similar to peripheral arteries and veins ....
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....These are larger in size, have bigger lumen, and have trochars for their introduction. In exigencies, where specific catheter is not available, IV Cannula are rarely used in abdominal/pleural cavities but this does not justify their use and they are not recommended by standard medical text books for this purpose. Literature alongwith samples as per annexure is enclosed. This issues with the approval of competent authority . Thus the opinion of Dr. P. Ravindran of DGHS while explaining the difference between Aorta and Vena Cavae and peripheral blood vessels and what are intra-corporal spaces, does not explain as to which blood vessels are similar to aorta and vena cavae. 10.2 But the notification is not confined only to the IV Cannula meant for aorta or vena cavae and for intra-corporal spaces. It is also applicable to IV Cannula meant for the arteries and veins similar to aorta and vena cavae, if the Department s stand that similar veins and blood vessels means the veins and arteries similar to vena cavae and aorta is accepted. In this Regard, Dr. Prabhu Vinayagam, Assistant Manager (Training) of the appellant company has claimed that cipahlic veins, basilic veins....