Case: Johnson and Johnson Limited Vs. Commissioner of Central Excise, Aurangabad

whether the appellants are entitled to exemption under Notifications Nos. 339/86-CE dated 11-6-1986 and 69/93-CE dated 28-2-1993 respectively. The Customs, Excise and Gold Control Appellate Tribunal (Mumbai Branch) has negatived the contention of the appellants. The Tribunal held that the decision of this Court in Jain Engineering case had no application as in that case the question was whether manufacturers of parts of combustion piston engines were entitled to that benefit or not. Distinguishing the case on that premise the Tribunal refused to place reliance thereon. It then quoted from the order of the appellate authority and held that the appellate authority had rightly held that the views of the experts could not be relied upon and so holding it concluded that the goods did not come within the purview of Heading 90 and, therefore, the demand of the appellants for exemption was baseless. It observed that since the goods in question are a combination of both items, the ratio of this Court in the decision cited above had no application. As far as the circular is concerned, it was held that it would not be applicable and accordingly dismissed the appeals. The appellants have approached this Court by way of these appeals 9. In the context of what we have stated hereinbefore the short question is whether the goods in question fall within Entry 3005.90 or they fall within the scope of Entry 90.18 within the meaning of the respective terms "others" and instruments and appliances used in surgical sciences. As stated earlier the submission of Mr. K. Parasaran, the learned Senior Counsel for the appellants, was that since each item in question was an integrated product comprising the needled suturing material, it fell within the meaning of the term "appliances" used in surgical operations and attracted duty under Item 90.18 of Chapter 90 whereas Mr. Subba Rao, the learned counsel for the Revenue, contended that it fell within the expression "others" in Item 3005.90. Mr. Parasaran further contended that if there was any doubt whatsoever it stood resolved by the subsequent two notifications issued under Section 5-A, being Notifications Nos. 60 of 1995 dated 16-3-1995 and 61 of 1995 dated 16-3-1995, respectively. Lastly, he relied on the Circular No. 9/96-Cus dated 13-2-1996 to state that the matter stood clarified in favour of the assessee by the said circular 10. Mr. Subba Rao contended that needle by itself could have fallen within Item 90.18 as an appliance but the needle along with the suturing material could not be said to be a surgical appliance and would not be attracted (sic covered) by the said item because suturing material stood specifically covered by Note 3 of Chapter 30 and would, therefore, fall within Entry 3005, namely, pharmaceutical goods not elsewhere specified and would be attracted by the residuary clause in Item 3005.90. We find it difficult to accept the contention urged on behalf of the Revenue. If the needle by itself fell within Entry 90.18 as a surgical appliance we find it difficult to conclude that if suturing material is affixed thereto, it ceases to a be a surgical appliance and would fall within the term suturing material in Note 3 of Chapter 30. Suturing material by itself may have attracted that item but the composite item comprising the needle as well as the suturing a material appended thereto could not fall within the expression suturing material and would not be outside the expression surgical appliances. At the relevant point of time these two were separately dealt with, needle simpliciter falling within the Entry 90.18 and suturing material simpliciter falling within clause (a) of Note 3 of Chapter 30 and consequently under Item 3005.90. But when the suturing material and the needle form an integrated single item used for surgical purposes it would not be proper to adopt a narrow construction to place it under the heading of suturing material removing it from the broader terminology of surgical appliance under Item 90.18. It was possibly for this reason that by the subsequent notifications the position was made clear and the ambiguity was removed. We are, therefore, of the opinion that the items produced by the appellant Company would fall within Entry 90.18 as the terminology surgical appliances has a broader compass than the terminology suturing appliances of Chapter 30 of the Excise Tariff. As far as the decision in Jain Engineering is concerned, the facts show that the notification provided that the article specified in the table annexed to the notification and falling under Heading 84.06 were exempt from payment of certain portion of customs duty. The table not only mentions internal combustion piston engines forming the subject-matter of Heading 84.06 but also mentions "parts thereof". It was construed that the notification intended to grant exemption to the parts also. The Court, therefore, turned down the Revenues contention that the notification was inapplicable to parts of the excisable item manufactured by the appellant. The Tribunal extracted para 7 of the judgment but merely stated that in the facts of the case the ratio was not applicable. We are afraid that the Tribunal failed to come to grips with the question. The submission was that the notification not only intended to grant exemption to internal combustion piston engines but also to parts thereof and once this intention was clear it was unreasonable to take a narrow view of the notification and to refuse to extend the benefit to the manufacturer. In the instant case also, we are of the opinion that the intention of the authorities was to grant exemption to certain life-saving and sight-saving articles manufactured in the country and once this intention is clear from the subsequent notifications issued under Section 5-A of the Act of 1995, we do not see any reason why we should take a narrow view to confine the two items produced by the appellants to Entry 3005.90 rather than place them in the wider connotation of surgical appliances in Entry 90.18 of Chapter 90

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]We are, therefore, of the opinion that the items produced by the appellant Company would fall within Entry 90.18 as the terminology surgical appliances has a broader compass than the terminology suturing appliances of Chapter 30 of the Excise Tariff. As far as the decision in Jain Engineering is concerned, the facts show that the notification provided that the article specified in the table annexed to the notification and falling under Heading 84.06 were exempt from payment of certain portion of customs duty. The table not only mentions internal combustion piston engines forming ther of Heading 84.06 but also mentions "parts thereof". It was construed that the notification intended to grant exemption to the parts also. The Court, therefore, turned down the Revenues contention that the notification was inapplicable to parts of the excisable item manufactured by the appellant. The Tribunal extracted para 7 of the judgment but merely stated that in the facts of the case the ratio was not applicable. We are afraid that the Tribunal failed to come to grips with the question. The submission was that the notification not only intended to grant exemption to internal combustion piston engines but also to parts thereof and once this intention was clear it was unreasonable to take a narrow view of the notification and to refuse to extend the benefit to the manufacturer. In the instant case also, we are of the opinion that the intention of the authorities was to grant exemption to certaing andg articles manufactured in the country and once this intention is clear from the subsequent notifications issued under SectionA of the Act of 1995, we do not see any reason why we should take a narrow view to confine the two items produced by the appellants to Entry 3005.90 rather than place them in the wider connotation of surgical appliances in Entry 90.18 of Chapter 90