2017 (1) TMI 1466 - HC - Customs

Classification - blood along with the term liquids - Held that - the process of renal dialysis or hemodialysis or kidney dialysis is adverted to and considered in a common parlance approach. Clearly, we have to say that this is not one of the processes which would fall as merely separation of liquid from colloidal particles to bring it under the purview of Entry 8421 with the aid of last paragraph falling under Entry 8421 (II)(A). The process of hemodialysis or renal dialysis as has been noticed by the CBEC is not something which can be treated merely as passing of a liquid through a semi-permeable membrane leading to separation of liquids by diffusion and separation from colloidal particles. Hemodialysis or renal dialysis is activity of a different nature and is much more than merely separation from colloidal particles. Appeal dismissed - decided against appellant.

Summary

Issues:
Challenge to CBEC Circular No. 19/2013 under statutory provisions.

Analysis:
The High Court of Kerala heard writ appeals filed by the Central Board of Excise and Customs challenging a judgment setting aside CBEC Circular No. 19/2013. The court noted that the circular was deemed unsustainable and not in line with statutory provisions. The court considered the arguments presented by both sides and examined the entries in the Indian Customs Tariff Act, particularly Entry 8421. The court emphasized that the term 'liquids' cannot be broadly interpreted to include blood in the context of equipment classification. The court highlighted that the process of hemodialysis or renal dialysis is distinct from the mere separation of liquids from colloidal particles as described in the tariff entry. The court referred to the CBEC circular, which discussed renal dialysis, and concluded that such processes do not align with the classification under Entry 8421. Despite reference to a judgment by the Calcutta High Court on similar classification issues, the Kerala High Court upheld the findings of the learned single Judge and dismissed the writ appeals challenging the circular.

This judgment delves into the interpretation of tariff entries under the Indian Customs Tariff Act, specifically focusing on the classification of equipment and processes related to liquids. The court scrutinized the CBEC Circular No. 19/2013 in light of statutory provisions and concluded that the circular's approach to including renal dialysis within a specific tariff entry was incorrect. By analyzing the language and scope of the relevant tariff entries, the court determined that the process of hemodialysis or renal dialysis does not align with the classification criteria set out in Entry 8421. The court emphasized the distinction between the activities involved in hemodialysis and the concept of separating liquids from colloidal particles, as outlined in the tariff provisions. Despite noting a similar judgment by the Calcutta High Court, the Kerala High Court upheld the decision of the learned single Judge, ultimately dismissing the writ appeals challenging the CBEC circular.