The Ahmedabad bench of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) ruled that a manufactured product contained in syringes without needles cannot be categorized as parts and accessories of goods falling under heading 9018.
Sanofi India Limited is a manufacturer of Reusable Insulin Delivery Device bearing the brand name “All Star”, this device is also referred to as “syringe without needle”. The Reusable Insulin Delivery Device are cleared by the appellant classifying the same under Central Excise Tariff Heading 9018 3100 availing the benefit of concessional rate of duty as per Notification No. 12/2012-CE dated 17.03.2012 under Serial No. 310 paying concessional rate of duty at the rate of duty 6% ad-valorem.
The appellant classified their product under CETH 9018 3100 with effect from 04.09.2015 and before that they were classifying the product namely Reusable Insulin Delivery Device under Central Excise Tariff Heading 90330000.
The department contended that the product manufactured by the appellant falls under Serial No. 309 of the Notification No. 12/2012-CE dated 17.03.2012 as amended which covers “parts and accessories‟ of the goods of heading 9018 and 9019 and attracts nil rate of duty as per the above referred exemption notification. On the basis of this contention, the Department is of the view that appellant have wrongly availed Cenvat credit on the inputs and input service used in the manufacture of their finished products i.e. Reusable Insulin Delivery Device. The appellant have classified their product as stated above under CETH 9018 3100 that covers “Syringes with or without needles” and have availed concessional rate of duty under Serial No. 310 of above mentioned exemption notification.
Mr. Anand Nainawati, representing the appellant submitted that the manufactured goods namely Reusable Insulin Delivery Device are classifiable under Chapter sub-heading 9018 3100. However, this classification was changed by them on an objection raised by the department and therefore with effect from 04.09.2015 they started classifying their products under Chapter heading 9018 3100 which reads as “Syringes with or without needles”.
It was further added that the “syringes with or without needle‟ are not covered by serial No. 309 of Notification No. 12/2012-CE dated 17.03.2013 which only prescribes for exemption to the parts and accessories of the goods falling under chapter heading 9018.
The bench found that only question whether the product “All Star” Reusable Insulin Delivery Device cleared by the appellant as “Syringes without needles” were exempted from excise duty under serial No. 309 of Notification No. 12/2012-CE dated 17.03.2012 or it is liable to pay concessional rate of duty at the rate of 6% under serial No. 310 of Notification No. 12/2012-CE dated 17.03.2012 and whether the demand of Cenvat credit availed on input and input services can be sustained on the ground that finished goods are eligible for complete exemption and appellants have wrongly paid Central Excise duty at the rate of 6% on their final product.
Furthermore, it was evident that the Reusable Insulin Delivery Device qualifies as a “Syringe without needle” and is appropriately classified under Chapter sub-heading 9018 3100. Regarding the availability of Notification No. 12/2012-CE, it’s notable that entry at Serial No. 309 pertains solely to parts and accessories of goods under headings 9018 and 9019. However, a more specific serial number for concessional duty rates under the exemption Notification No. 12/2012-CE is found under Serial No. 310, which explicitly includes “All goods (other than parts and accessories thereof)”.
The two member bench of the tribunal comprising Ramesh Nair (Judicial member) and C.L Mahar (Technical member) concluded that the impugned manufactured product is “Syringes without needle” and the same cannot be classified as “parts and accessories” of the goods of heading 9018.
Therefore, CESTAT held that the impugned product would be entitled for concessional rate of duty under Serial No. 310 of exemption Notification No. 12/2012-CE dated 17.03.2012. The tribunal found no merit in the impugned orders-in-appeal and the same were set-aside. Appeals were allowed.
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