2023 (3) TMI 593 - AT - Customs

Classification of imported goods - I Stat Blood Gas Investigation Cartridges - I Stat Wireless Analysers with printer kit - I Stat Alinity Instruments with accessories - whether the said goods are classifiable under Customs Tariff Heading 9027 as classified by the Appellant Importer or under CTH 9018, as contended by Revenue and further regarding eligibility of concessional duty/exemption under Notification Nos.24/2005-Cus and 25/2005-Cus, both dated 1st March, 2005? HELD THAT - The instrument I Stat System along with cartridges, etc are prima facie used for anylysis of various parameters of blood, and is prima facie a blood analyser. Both in case of glucometer or in the case of the present I Stat System with cartridge, blood is drawn and a few drops of blood are put on the cartridges or test strip and thereafter, on being attached to the I Stat System/Analyser, gives the readings. The only difference is that the item under consideration is more sophisticated than the glucosemeter. The testing of blood by analyzing and indicating the various parameters is undisputedly an outcome of chemical analysis, etc. In the facts and circumstances, we find that the heading 9027, which covers instruments for chemical analysis is more specific than CTH 9018, which covers instruments used in medical/surgical science, etc. Further, we find that Rule 3 of General Rules of Interpretation provides that a specific description is to be preferred over a general description. The Court Below have erred in deciding the classification relying on the facts that the goods in question are mostly used on bedside or in an ICU - the goods under consideration are appropriately classifiable under CTH 9027. Extended period of limitation - HELD THAT - The extended period of limitation is not attracted in the facts and circumstances, the issue being wholly interpretational in nature and there being no res judicata in tax matters. Appeal allowed.

Summary

Issues Involved:
1. Classification of imported goods.
2. Eligibility for concessional duty/exemption.
3. Liability for confiscation and penalty.

Summary:

1. Classification of Imported Goods:
The primary issue in this appeal is whether the imported goods, namely I Stat Blood Gas Investigation Cartridges, I Stat Wireless Analysers with printer kit, and I Stat Alinity Instruments with accessories, are classifiable under Customs Tariff Heading (CTH) 9027 as claimed by the appellant or under CTH 9018 as contended by the Revenue. The appellant argued that the I Stat Blood Gas Analyser is a chemical analyser used for the analysis of blood and should be classified under heading 9027. They relied on the Explanatory Notes to chapter 9018, which exclude instruments used in laboratories to test blood from heading 9018, and several judicial precedents supporting their classification under 9027.

2. Eligibility for Concessional Duty/Exemption:
The appellant claimed benefits under Notification Nos. 24/2005-Cus and 25/2005-Cus, which provide concessional duty/exemption for goods classified under heading 9027. The Revenue, however, contended that the goods are classifiable under heading 9018 and thus not eligible for the claimed exemptions. The Tribunal found that the I Stat System, being an instrument for chemical analysis of blood, fits more specifically under heading 9027 than the general heading 9018, which covers instruments used in medical sciences.

3. Liability for Confiscation and Penalty:
The Revenue had issued a show cause notice alleging mis-declaration and proposed confiscation of the goods under Section 111(m) of the Customs Act, 1962, along with a direction to pay differential duty and an equal amount of penalty under Section 114A. The appellant argued that there was no mis-declaration as the goods were correctly described and classified based on judicial precedents and the Explanatory Notes. The Tribunal agreed with the appellant, holding that the goods were not liable for confiscation under Section 111(m) and that the penalty under Section 114A was not sustainable as the issue was interpretational and there was no mens rea.

Conclusion:
The Tribunal concluded that the I Stat System and its accessories are appropriately classifiable under CTH 9027, making them eligible for the claimed exemptions. It also held that the extended period of limitation was not applicable, and there was no case for confiscation or penalty. The appeal was allowed with consequential benefits, and the impugned order was set aside.