Reusable Insulin Delivery Device classifiable under CTH 9018 3100: CESTAT Ahmedabad

Sanofi India Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)

Introduction: The case of Sanofi India Limited versus the Commissioner of Central Excise & ST, adjudicated by CESTAT Ahmedabad, addresses the classification of the “All Star” Reusable Insulin Delivery Device. The central question revolves around whether these devices, often referred to as syringes without needles, qualify as parts and accessories of goods under heading 9018 of the Central Excise Tariff.

Analysis: Sanofi India Limited manufactures Reusable Insulin Delivery Devices, commonly known as syringes without needles, and classified them under Central Excise Tariff Heading 9018 3100. They availed the benefit of a concessional duty rate under Notification No. 12/2012-CE. However, the Department contended that these products fell under Serial No. 309 of the same notification, attracting a nil rate of duty as parts and accessories of goods under heading 9018.

The crux of the matter lies in the interpretation of whether syringes without needles qualify as parts and accessories under Serial No. 309 or if they are standalone products entitled to a concessional duty rate under Serial No. 310 of the notification.

Sanofi India Limited argued that their product, being reusable syringes for administering insulin, should be classified under Chapter sub-heading 9018 3100, warranting a concessional duty rate of 6%. They contended that these syringes, complete and independent in themselves, do not fall under the category of parts and accessories of goods under heading 9018.

CESTAT, after considering both arguments, observed that the Reusable Insulin Delivery Device, resembling syringes without needles, indeed falls under Chapter sub-heading 9018 3100. The tribunal noted that Serial No. 309 of Notification No. 12/2012-CE dated 17.03.2012 covers only parts and accessories, while Serial No. 310 pertains to all goods except parts and accessories thereof.

Conclusion: In its ruling, CESTAT concluded that the Reusable Insulin Delivery Device, categorized as syringes without needles, cannot be classified as parts and accessories of goods under heading 9018. Therefore, Sanofi India Limited rightfully availed the concessional duty rate of 6% and is entitled to Cenvat credit on inputs and input services.

FULL TEXT OF THE CESTAT AHMEDABAD ORDER

The facts in brief are that the appellants are 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 have started classifying 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. It has been the contention of the department 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. The department has issued following show cause notices demanding reversal of Cenvat credit availed on inputs input services:-

2. Shri Anand Nainawati, learned advocate appearing on behalf of the appellant submitted that the manufactured goods namely Reusable Insulin Delivery Device are classifiable under Chapter sub-heading 9018 3100. Earlier, the appellant have been classifying their manufactured product under CETA 90330000 as “Parts and accessories for machines, appliances, instruments, or apparatus of Chapter 90”. 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 has been the contention of the learned advocate that ^„syringes with or without needle‟ are not covered by serial No. 309 of Notification No. 12/2012-CE dated 17.03.2012 which only prescribes for exemption to the parts and accessories of the goods falling under chapter heading 9018.

3. It has been contended by the appellant that the impugned goods namely ^„syringes without needles‟ classifiable under tariff classification number 9018 3100 are not part and accessories of the goods falling under Chapter heading 9.18 rather the same are independent and complete product which are used for administering insulin in the human body and the same are entitled for concessional rate of duty at the rate of 6% under serial number 310 of the Notification No. 12/2012-CE dated 17.03.2012 and therefore, the appellant is very much entitled for availing Cenvat credit on the inputs and input services going into manufacture of finished products namely ^„Reusable Insulin Delivery Device or syringes with needles‟. It has been the contention of the learned advocate that their product is reusable syringes for injecting insulin and same is classifiable under Chapter sub­heading 9018 3100 and entitled for concessional rate of duty at the rate of 6% under serial No. 310 of the Notification No. 12/2012-CE dated 17.03.2012.

4. We have also heard the learned AR who has reiterated the findings given in the impugned order-in-original.

5. Having heard both sides, we find that only question we need to be answered is whether the product ‘All Star’ Reusable Insulin Delivery Device cleared by the appellant as ‘Syringes without needles’ is 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 gods are eligible for complete exemption and appellants have wrongly paid Central Excise duty at the rate of 6% on their final product.

6. There is no denying of the fact that both, the department as well as appellant submitted that the right classification for their product namely Reusable Insulin Delivery Device i.e. in the form of Syringes without needle is rightly classifiable under Chapter sub-heading 9018 3100 which reads as ‘Syringes with or without needle’. The only question which needs to be answered by us is whether the impugned finished product namely Syringes with or without needle will fall under Serial No. 309 or 310 of Notification No. 12/2012-CE dated 17.03.2012. It will be relevant to reproduce the relevant entries of exemption Notification No. 12/2012-CE dated 17.03.2012:-

7. During the course of hearing we have physically seen the finished product namely Reusable Insulin Delivery Device which looks as below:-

It can be seen that Reusable Insulin Delivery Device is nothing but a ^„Syringe without needle‟ and is rightly classifiable under Chapter sub-heading 9018 3100. So far as the availability of Notification No. 12/2012-CE dated 17.03.2012 is concerned, the entry at Serial No. 309 covers only parts and accessories of goods of heading 9018 and 9019 whereas we find more specific serial number for concessional rate of duty under the exemption Notification No. 12/2012-CE dated 17.03.2012 for the product will be under Serial No. 310 which reads as “All goods (other than parts and accessories thereof)”. Therefore, we are of the view 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, we hold that the impugned product will be entitled for concessional rate of duty under Serial No. 310 of exemption Notification No. 12/2012-CE dated 17.03.2012. Accordingly, we are of the opinion that the appellant have rightly been paying excise duty at the concessional rate of 6% and they are entitled for Cenvat credit on the inputs and input services availed by them.

8. In view of above, we find no merit in the impugned orders-in-appeal and the same are set-aside. Appeals are allowed.

(Pronounced in the open court on 20.03.2024)