2022 (11) TMI 871 - HC - Customs

Maintainability of petition - availability of alternate remedy - Violation of principles of judicial discipline and doctrine of stare decisis - Classification of imported goods - Glucometer - whether the Glucometer should get classified under item 9018 or item 9027, which has already been considered by CESTAT? - HELD THAT - As the Tribunal has already expressed its views in an identical matter and has classified the Glucometer under 9027, an Appeal to CESTAT against impugned order would be a mere idle formality. Moreover, with this background, Petitioner will also have to make compliance with an onerous precondition of mandatory pre-deposit. When the order is ex facie erroneous and patently in violation of principles of judicial discipline and doctrine of stare decisis, this is a fit case to exercise our jurisdiction under Article 226 of the Constitution of India. Moreover, there are no disputed facts and the only issue to be considered is whether the Glucometer should get classified under item 9018 or item 9027, which has already been considered by CESTAT. Since this is already concluded by CESTAT, on this ground alone, the impugned order requires to be quashed and set aside. First of all this conclusion is erroneous particularly in view of findings of the CESTAT in M/S BAYER PHARMACEUTICALS PVT LTD VERSUS COMMISSIONER OF CUSTOMS, MUMBAI 2015 (11) TMI 943 - CESTAT MUMBAI . Moreover, the said notification will apply only where goods are classified under item 9018. The notification would not apply when goods are classified under 9027. Therefore, the attempt of giving reasons or explaining how the notification is applicable only to those goods classified under item 9018 could be applicable to goods under item 9027 is not acceptable. Non considering and following Bayer (supra) itself is a reason for us to interfere under Article 226 of the Constitution of India. We entirely agree with the conclusions/findings of CESTAT in Bayer 2015 (11) TMI 943 - CESTAT MUMBAI since the goods are identical. - Demand set aside.

Summary

Issues Involved:
1. Classification of Glucometers under the Customs Tariff Act.
2. Binding nature of the previous CESTAT ruling.
3. Applicability of alternate remedies.
4. Application of Notification No. 50/2017-Customs.

Detailed Analysis:

1. Classification of Glucometers under the Customs Tariff Act:
The primary issue was whether the imported Glucometers should be classified under tariff item 9027 or 9018 of Chapter 90 of the Customs Tariff Act, 1975. The petitioner classified the Glucometers under item 9027, which pertains to instruments and apparatus for physical or chemical analysis, and paid customs duty at NIL rate with IGST at 12%. The Department, however, contended that the Glucometers should be classified under item 9018, which covers instruments used in medical, surgical, dental, or veterinary sciences, and demanded differential duty.

2. Binding Nature of the Previous CESTAT Ruling:
The petitioner argued that the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) had previously ruled in the case of Bayer Pharmaceuticals Pvt. Ltd. that Glucometers should be classified under heading 9027. This ruling was binding on the adjudicating authority. The petitioner emphasized that judicial discipline required adherence to this precedent.

3. Applicability of Alternate Remedies:
The respondent argued that the petitioner should be directed to file an appeal before CESTAT as an alternate remedy. However, the court rejected this submission, noting that the merits of the case had not been examined by the respondent, despite a binding CESTAT order in the petitioner's favor. The court held that relegating the petitioner to an alternate remedy would be an exercise in formality and that the order was ex facie erroneous and in violation of judicial discipline.

4. Application of Notification No. 50/2017-Customs:
The respondent also cited Notification No. 50/2017-Customs, which specifies a standard rate of 5% duty for "Blood Glucose Monitoring System (Glucometer) and test strips" under chapter 90 or any other chapter. The respondent argued that this notification implied classification under item 9018. However, the court found this reasoning flawed, stating that the notification would only apply if the goods were classified under item 9018, not 9027. The court emphasized that the CESTAT ruling in Bayer Pharmaceuticals, which classified Glucometers under 9027, should prevail.

Conclusion:
The court quashed and set aside the impugned order dated 31st December 2020 and the consequential notices of demand. The court agreed with the CESTAT's findings in Bayer Pharmaceuticals, reiterating that the Glucometers should be classified under item 9027. The petition was dismissed with no order as to costs.