TaxTMI 
TaxTMI 
2020 (7) TMI 93
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....ectorate of Revenue Intelligence, initiated investigations into the imports by the Appellant and statements of Shri M.S. Swaminathan, Authorised Signatory of the Appellant and Shri Kulveen Singh Bali, Head, Regulatory Affairs and Quality Assurance of the Appellants were recorded. A Show Cause Notice dated 30.09.2011, demanding differential duty of Rs. 9,33,25,582, on imported Micropore, Transpore and Tegaderm, cleared during the period from October 2006 to February 2010. It was alleged that 'Hypoallergenic Surgical Adhesive Tapes' (under the brand name micropore, Transpore and Tegaderm), sold as general purpose medical adhesive tapes, are not 'ostomy appliances' for managing the four types of ostomy; in terms of the exemption Notification concessional rate of 5% BCD and Nil rate of CVD are available only for 'Skin barrier micropore surgical tapes' used as an Ostomy product (appliance) for managing Colostomy, Ileostomy, Ureterostomy, Heal Conduit Urostomy Stoma cases. Learned Commissioner passed the impugned Order-in-Original, 10/2012 dated 14.12.20 12, confirming duty of Rs. 9,33,25,582 on the appellants along with equal penalty under Section 114A of Customs....
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....arned senior Counsel submits that the issue is settled by the tribunal by the decision in the case of Sutures India Pvt ltd 2019-VIL-221-CHE-CU; Tribunal examined the issue whether "Micropore surgical tape", classifiable under CTH 3005 90 60,are entitled to exemption Sl. 363(A) of Notification No. 21/2002 dated 01.03.2002; Tribunal held that the Notification apart from covering specific Ostomy products also covers the general purpose products; therefore, the impugned order is liable to be set aside. 4. Learned senior counsel further submits that surgical tapes imported by the appellants are an appliance used in managing ostomy cases and hence the exemption has been rightly claimed; Sl. No. 363(A) of Notification No.21/2002-Cus dated 1.3.2002 as amended from time to time, exempted goods specified in List 37 therein from so much of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the Table; correspondingly, Sl.No.61 of Notification No.6/2006-CE exempted goods covered under SI.No.363 of Notification No.21/2002-Cus and mentioned in List 37....
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....ape as a picture frame to hold the entire system securely to the patient. 6. Learned senior Counsel submits that the above procedure shows that the tapes are used for securing the ostomy pouches to the abdomen as a window frame and act as an additional support to the whole pouching system; the efficacy of the pouching system, both in collecting the body waste as well as in protecting the peristomal skin by preventing leakages depends heavily on its secure adherence to the body of the ostomate; thus, the impugned imported tapes are actually used as an appliance for ostomy management and care; the appellants have produced the following documents evidencing use of imported goods for the purposes of ostomy (i). Copies of the letters issued by the hospitals and letter from Ostomy Association of India certifying the use of Micropore tapes for managing ostomy cases. (ii). Illustrative copies of purchase orders placed by various hospitals for purchase of Micropore tapes, the dealers' invoice evidencing sale of Micropore tapes and the certificates issued by the Max Super Specialty Hospital, New Delhi and HCG Cancer Centre, Ahmedabad certifying the use of Micropore t....
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....ll be extended as the imported goods are capable of being used and have been used for managing ostomy cases; appellants have produced several documents evidencing use of imported goods for the purposes of ostomy; department has not produced any evidence to establish that the impugned goods imported by the Appellant is not necessary in ostomy procedure. (i). Special Court for Economic Offences held, vide order dated 11.02.2019, that based on the literature and patents downloaded from the website, it cannot be held that the imported surgical tape is not usable in ostomy procedure; (ii). Shri K.K Ghosh, SIO, DRI admitted during Cross- Examination that the relied upon document does not state that the tape is not used for Ostomy purpose. 9. He submits that the use of the impugned goods for ostomy is undisputed and the impugned goods are therefore entitled to exemption. 'Skin barrier' and 'micropore surgical tapes' are two distinct products and there is no product corresponding to the description 'Skin barrier micropore surgical tapes' as averred in the impugned order; certain products in List 37 have not been separated by appropriate commas; ....
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....#39;skin barrier'; in 2007, Heading 30069100 was inserted in the Tariff with the description 'Appliances identifiable for ostomy use'; clause (k) under Note 4 in Chapter 30 states heading 3006 applies to 'appliances identifiable for ostomy use, that is, colostomy, Ileostomy and urostomy pouches cut to shape and their adhesive wafers or faceplates'; thus, even after amendment in 2007, the Tariff does not describe the product as 'skin barrier micropores surgical tapes' but as adhesive wafers of 'pouches'; therefore it is submitted that if the expression 'skin barriers micropore surgical tapes' in S1.No.22 of List 37 is taken to denote a single product, read with the description in the Tariff, it can only apply to the 'surgical tapes' as imported by the Appellants; he places reliance on the decision of the Tribunal in the case of Equipment Sales Corporation reported in 1989 (39) 421 wherein the benefit of erstwhile Notification No. 208/81-Cus, dated 22.09.1981 was extended to Micropore Surgical Tapes. 10. Learned senior Counsel submits that alternatively, the imported goods are entitled to exemption under Sl.No. 363(B) of the Notifica....
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.... exemption Notification does not amount to mis-declaration warranting invocation of longer period and imposition of penalty; appellants have neither suppressed the facts nor had any intention to evade payment of duty and therefore penalty is not imposable under Section 114A of the Customs Act. 12. Dr. J. Harish, Joint Commissioner, Authorised Representative, appearing for the department reiterated the findings of OIO and submitted written submissions. He submitted inter alia that the appellant claimed exemption Notification 21/2002-Cus; Sl. No 363 A (List 37, Sl. No 22) under the category of Ostomy Products; appellants sought clearance of the products under the category of 'micropore surgical tapes' claiming that the items have microporous properties and are used in Ostomy procedures though they are being commonly used for other purposes also like fixing IV Cannulas, Bandage fixation and to hold tubes and other general purpose applications; the stated application in Ostomy cases is for giving Additional support/for affixing the Ostomy Bags or pouches; the claim is based on the premise that the said entry was also available under the earlier Customs Notification 208/1981-Cus unde....
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....ference on the premise that the said goods and other items like adhesive seals, adhesive remover, skin gels are items used for general purposes but find use also in ostomy procedures; there is no end use condition / exclusive use condition that such products need to be used only for ostomy applications and it is enough if they are used in relation to ostomy procedure and that the department has not been able to show any product which fits into the category of surgical tapes meant for Ostomy only. He submits that the said decisions have been taken by the bench without taking note of the fact that the item eligible for the benefit is a combination product of Skin Barrier Micropore Surgical Tape which combines the dual properties of preventing the seepage of the ostomy discharge onto the surrounding skin thus preventing harm to the skin as well as having the microporous breathing characteristics; the bench has not been made aware of the existence of such products and hence the bench has arrived at the conclusion that such products are not available. 13.3. He submits that however, in the impugned order the Commissioner and the investigating authority have shown that there are produc....
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....how by increasing the thickness of such hydrocolloid layer ostomies like ileostomy and urostomy which have a predominant liquid discharge the seals can be made efficient to handle the extra outflow; even the Skin Gels are not of regular application quality and ought to have Hydrocolloid properties for ensuring the skin care; products like Karaya paste, powder are also products which have these water absorbent properties and are used specially for Ostomy purposes; thus the conclusion by the bench that some of the products in the entry at Sl. No 22 of the Notification are General purpose products is factually incorrect; the whole entry is to be seen as genre of products from the perspective of being Ostomy Products and special skin care products and not products which are being used incidentally to just support/affix the ostomy pouches or tubing( as discussed in Paras 8.2.4; 8.2.5 and 8.2.6 of the OIO). 14. He submits that 3M Brochures themselves describe as follows. (i). Micropore Surgical Tape to be a non-woven rayon backed medical adhesive tape; this "paper tape" is latex free, hypoallergenic and gentle to the skin; thus, Micropore is an all-purpose tape for general us....
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....d demand is justified and the consequential proceedings of Confiscation, Redemption fines and penalties are liable to be upheld. 17. Heard both sides and perused the records of the case. The brief issue involved in this case is as to whether Micropore, Transpore and Tegaderm imported by the appellants are eligible for exemption contained in notification No. 21/2002-Customs dated 01/03/2002 as amended from time to time. The contention of the appellants is that their products are rightfully eligible for the exemption contained in the notification under the description "Skin Barriers Micropore Surgical Tapes"; otherwise also they are covered under Ostomy Products (appliances) for managing Colostomy, Illcostomy, Ureterostomy, Illeal Conduit Urostomy Stoma cases such as bags, belts, adhesives seals or discs or rolls adhesive remover; alternatively they claimed that they are eligible for exemption as per Sl.No. 365 which provides exemption to lifesaving equipment subject to the condition that the importer at the time of import produces the certificate to the effect that the imported goods are a lifesaving medical equipment; there is no product which suits the description "Skin Barrier....
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....t is that these can be used as ostomy appliances. In fact the noticee has gone one step ahead. The contention is that there is no medical item which is "Skin Barriers Micropore Surgical Tap" and that comma is missing in the description in the notification and that the said entry should be read as two different items, namely, 'skin barriers' and 'micropore surgical tape'. It is claimed that the items imported by them are 'micropore surgical tape'. It is averred that the surgical tapes imported by them can be used in ostomy management. It is also the case of the noticee that it is enough if the goods are capable of being used as Ostomy Products/Appliances to claim the benefit of notification and that there is no condition that the imported goods are to be used as ostomy appliances only. 28. DRI, on the other hand, has shown that there is a product which is called "Skin Barriers Micropore Surgical Tapes" as shown in RUD No.12 which refers to Medex Supply product "HOL-3723 Cut-to-fit Flex wear Flat Skin Barrier, Porous Paper Tape, 2-1/4", manufactured by M/s. Hollister. It is also seen that M/s. Coloplast also make another similar product, the details of which are given in RUD....
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....es; being hypoallergenic (less prone for allergic reactions) and causing no painful peeling off sensation like the earlier cloth based tapes, the products are marketed and are being practically used for these purposes of holding bandages/ dressings and tubes or even the colostomy bags as an additional reinforcement or affixation aid. He submits that the tapes which are imported by appellants can easily come off and cannot act as skin barriers. We find that there is visible and perceptible difference between the items as shown below. (i). Items imported by the appellants are as follows. (ii). the items demonstrated by AR are as follows 21. We find that the department has established that a product named and known as "Skin Barriers Micropore Surgical Tapes" exists. We find that evidence of the same has been supplied as RUD to the appellants. Under such circumstances, we find that the appellants contention that no product known as "Skin Barriers Micropore Surgical Tapes" exists and there should have been a comma (,) in between doesn't hold water. When such products are sold and used as such, it cannot be inferred that the notification was wrongly worded and therefore, it is t....
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....mission as this is to assume the function of legislature. This is not a case, where the Court is entitled to rewrite the notification. The language of Notification being plain and unambiguous, it is not open to read into it a word which is not there based on a prior reasoning as to the probable intention of the notification. In a Court of Law, what is unexpressed has the same value as which is unintended. This is a Rule of construction. It is the duty of the Court to give without engrafting, adding or implying anything which is not congenial to or consistent with such express intent of the law giver. More so, it a Statute is a taxing Statute. It must be assumed that the Rule making authorities do no commit mistake or make any omission. (Emphasis supplied). Therefore, the contention of the Respondent to supply the word 'Dibrugarh' in the Notification of 1981 is not permissible." In the present case, as already held, there is no omission in the notification as the products corresponding to generic description "Skin Barriers Micropore Surgical Tapes" exist. Even if it were to be so, such omission could not have been supplied in accordance with the law settled as above". 23....
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.... a tool or machine to a special purpose:attachment b:an instrument or device designed for a particular use or function an orthodontic appliance specifically :a household or office device (such as a stove, fan, or refrigerator) operated by gas or electric current c:British : fire engine d: an artificial part or mask that is worn as part of an actor's makeup or costume ... more grown-ups are shelling out for scary facial appliances-wounds, snouts and horns-to create the creepy characters they've dreamed up on their own.- Dana Coffield e: computing : information appliance A growing number of companies are coming up with ways [in 2000] to turn ordinary phones into Internet appliances.- Sharon Cleary 3.obsolete: compliance Cambridge dictionary defines appliances as follows (https://dictionary.cambridge.org/dictionary/english/appliance) a device, machine, or piece of equipment, especially an electrical one that is used in the house, such as a cooker or washing machine: Going by the above definition or any other definition one can find that the meaning attached with an appliance is closer to equipment. Therefore, we are not inc....
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....venting harm to the skin as well as having the microporous breathing characteristics; it was not convincingly demonstrated before the Chennai bench that a product having dual use and fitting the description as mentioned in the Notification exists and thus, the Bench arrived at the conclusion that suchproduct known as' Skin Barrier Micropore Surgical Tape' do not exist. On the basis of the facts and circumstances of the present case and as demonstrated before us, we find that products known as 'Skin Barrier Micropore Surgical Tape' exist and that the impugned goods do not match the description given in the notification so as to be eligible for the exemption. While we are in agreement with the coordinate bench that there is no specific mention in the Notification that Skin Barrier Micropore Surgical Tapes have to be exclusively used for ostomy procedures and it is enough if they are capable of being used, we find that to be eligible for exemption the impugned goods need to match the description as given in the notification and only then the question of their actual use or capability of being used would come into play. We also find in the instant case that the department could produce....