Custom, Excise & Service Tax Tribunal
M/S. Bayer Pharmaceuticals Pvt. Ltd vs Commissioner Of Customs, Mumbai on 4 March, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. C/79/2011-MUM (Arising out of Order-in-Appeal No. 130/MCH/AC/Gr.VB/2010 dt. 2.11.2011 passed by the Commissioner of Customs (Appeals), Mumbai-I) For approval and signature: Honble Mr. Anil Choudhary, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
authorities?
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M/s. Bayer Pharmaceuticals Pvt. Ltd.
:
Appellant
VS
Commissioner of Customs, Mumbai
:
Respondent
Appearance
Shri T. Viswanathan, Advocate for Appellant
Shri Ahibaran, Additional Commissioner (A.R) for respondent
CORAM:
Mr. Anil Choudhary, Member (Judicial)
Mr. P.S. Pruthi, Member (Technical)
Date of hearing : 4/03/2015
Date of pronouncement : /03/2015
ORDER NO.
Per : P.S. Pruthi
This appeal is directed against the order in appeal passed by Commissioner (Appeals) holding the classification of the impugned imported goods under Customs Tariff Heading 90.18.
2. The facts of the case are that the appellant imported blood Glucose meters having the brand-name Breeze 2 Meter. The imported product consisted of a blood glucose meter and the users guide. The classification of the goods was sought under tariff item number 902780.90 which covers instruments and apparatus for physical or chemical analysis. And exemption from basic customs duty was claimed under notification number 24/05-Cus dated 1.3.2005. The Department did not accept this classification and in adjudication the Assistant Commissioner held the goods to be classifiable under Heading 90.18 which covers instruments and appliances used in medical, surgical, dental or veterinary sciences. In appeal, the Commissioner (Appeals) upheld the classification under Heading 90.27.
3. The Learned Counsel for the appellant stated that the Commissioner (Appeals) is not following an earlier decision of the Commissioner (Appeals) vide Order dt. 12.11.2008, holding that the blood Glucose meter is classifiable under Heading 90.27 as an instrument for chemical analysis and not under Heading 90.18 as an instrument or appliance used in medical science. This has resulted in judicial indiscipline. He relied on the Supreme Court judgement in the case of Birla Corporation Ltd. Vs. Commissioner 2005 (186) ELT 266 (SC). According to him, the product in question in the present case is identical to the product in respect of which the order dated 12.11.2008 was passed by the Commissioner (Appeals).
3.1. The further contention is that the function of the Glucose meter is to undertake chemical analysis of the human blood and find out the level of glucose present in the blood sample and measure it in terms of numerical value. Therefore the product in question is an instrument for chemical analysis appropriately classifiable under Heading 90.27. He stated that internationally, Glucose meters are classified under heading 90.27 only. He referred to the United States Customs Department Ruling on this issue which classifies similar products under Heading 90.27. He also referred to the Canadian International Trade Tribunal which took the view that glucose testing devices fall under heading 90.27 only. And these countries, like India, also follow the Customs Tariff based on the WCO HSN Explanatory notes. But the Commissioner in the impugned Order held that the earlier Order of Commissioner (Appeals) as well as the U.S. Customs and Canadian Tribunal Rulings dealt with complete glucose monitoring systems whereas the goods in the present case are only Glucose meters with user guide and not a complete glucose monitoring systems set. The leaned Counsel argued that the Glucose meter will continue to be classified under Heading 90.27 only, irrespective of the fact whether it is packed with test strips etc. because the glucometer gives the essential character to the entire kit. According to him, the actual analysis is undertaken by the glucometer only and the test strip does not play any role in testing and analyzing of the sample by the glucose meter. To substantiate this point, he referred to Sr. No. 65 of notification No. 6/2006 which specifies that Blood Glucose monitoring system (Glucometer) and test strips will be subject to SAD duty of 4%. According to him, this indicates that the glucose monitoring system refers to glucometer only.
3.2. The learned Counsel argued that HSN Explanatory Note to Heading 90.18 state that the goods therein are handled by professionals which is not so in the case of Glucose meters. He also referred to para (o) of the Explanatory Note which state that heading 90.18 does not cover Instruments and Appliances used in laboratories to test blood, tissue fluids, Urine etc. which would generally fall under the heading 90.27.
4. The learned AR appearing on behalf of Revenue reiterated the findings of the Commissioner (Appeals).
5. We have carefully considered the rival contentions of both sides. The competing Headings for classification of the impugned goods are extracted below:
9027 instruments and apparatus for physical or chemical analysis (for example, polarity meters, refractory meters, spectrometers, gas or smoke analysis apparatus); instruments and apparatus for measuring or checking viscosity, porosity, expansion,.
9018 instruments and appliances used in medical, surgical dental or veterinary sciences.
The learned Counsel showed us the product imported i.e. those which are covered by the earlier order of Commissioner appeals dated 12.11.2008 having the brand-name contour TS meter. These goods consist of Glucose meter, test strips, Lancing device and user guide. And the also showed product in question having the brand-name breeze 2 meter which consists of Glucose meter and user guide.
A point to be examined is whether the two products would be classified separately only because in the first case the product includes lancets and test strips. We are of the view that the essential character of the goods in both cases is to draw the blood and test it for glucose content. With changes in technology, the glucose meter can be expected to become more sophisticated and compact without change in its essential function. The essential function of a Glucose meter is to draw the blood as well as test the blood for Glucose level. The product in question is also able to draw the blood as well as test the blood. The testing of blood and then its analysis for indicating blood sugar content as revealed by the Glucometer is undisputedly the outcome of a chemical analysis. That is, the Glucometer is an instrument for chemical analysis. Having noted the essential characteristic of both ? a Glucose meter system with strips and lancets and the Glucose meter without strips, it would be illogical to say that the Glucose meter with strips will be classifiable under heading 90.18 whereas the Glucose meter without strips will get classified under heading 90.27.. Therefore we reject this argument of the Commissioner.
6. For a deeper examination of the issue, we may refer to the HSN Explanatory Notes and the Customs Tariff Act. The General Rules for the Interpretation of the Customs Tariff Act provide that (Rule 1) for legal purposes classification shall be determined according to the terms of the Headings and any relative Section or Chapter notes We find in this case that heading 90.27 covers instruments for chemical analysis. This heading appears to be more specific than the description of heading 90.18 which covers instruments used in medical, surgical etc. sciences. Thus by virtue of Rule 3 which says that a specific description is to be preferred over a general description, the Heading 90.27 appears more appropriate.
6.1. Further, we may refer to the HSN Explanatory Note to heading 90.18 which states that This heading covers a very wide range of instruments and appliances which, in the vast majority of cases, are used only in professional practice (for example, by doctors, surgeons, dentists,.) either to make a diagnosis, to prevent or treat an illness or to operate etc. Instruments and appliances for anatomical or autoptic work, dissection etc. are also included From the language of this Note it appears that only those instruments fall under heading 90.18 which are used in professional practice in the vast majority of cases. It is obvious that the Glucose meters are not vastly used only in professional practice. Mostly they are used by individuals at home or in the workplace, that is, by common people other than professional practitioners. Further under paragraph (o) of the same Note it is stated This heading does not cover, - instruments and appliances in laboratories to test blood, tissue fluids, uren etc. whether or not such tests serve in diagnosis (generally heading 90.27). It is quite evident that the product in question is not an instrument which is generally used in laboratories. Therefore by virtue of the Explanatory Note under Heading 90.18, the impugned goods, that is Glucose meters are classifiable under heading 90.27.
7. In view of the above, we hold that the imported goods namely Glucose meters are classifiable under heading 90.27 and are eligible for exemption under notification No. 24/05-CUS dated 01.03.2005.
8. Impugned order is set aside. Appeal allowed.
(Pronounced in court on /2015)
(Anil Choudhary)
Member (Judicial)
(P. S. Pruthi)
Member (Technical)
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