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TMI Blog2020 (9) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... d image, has a provision to illuminate the object from below (by means of a mirror illuminated by a light source) and a set of condenser lenses which directed the beam of light onto the object. Thus, the micromanipulator would be rightly classified under the head Compound Optical Microscope falling under Sub-heading 9011. The said product would be rightly classifiable as Surgical microscope (Tariff item No.90118000) under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) covered under the Sub-heading Compound optical microscopes, including those for photomicrography, cinephotomicrography or microprojection. Whether the product micromanipulator finds mention under sub-heading 9018 for which we would be required to go through the sub-heading 9018 as appearing in the First Schedule to the Customs Tariff Act, 1975? - HELD THAT:- We have gone through the above explanatory notes to the Harmonized Commodity Description and Coding System with respect to Sub-heading 9018 (which covers all the products falling under the sub-heading No.9018). We have also gone through the entire list of all the instruments/apparatus/appliances listed therein covered under the Sub-heading No.9018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated the Micro-manipulator system ('MM system' in short) is also known as IVF technology' in the medical world and in common/trade parlance, it is also called "Micro manipulator'; that globally micro-manipulator falls under the HSN 9018 but in India there is confusion as to whether it falls under HSN 9018 or 9011; that they are of the view that the product in question should be classified under CH-9018 and not under CH-9011. The applicant submits that a micromanipulator is a device which is used to physically interact with a sample under a microscope, where a level of precision of movement is necessary which cannot be achieved by the unaided human hand and may typically consist of an input joystick (a mechanism for reducing the range of movement) and an output section with the means of holding a microtool to hold, inject, cut or otherwise manipulate the object as required; that mechanism for reducing the movement usually requires the movement to be free of backlash which is achieved by the use of kinematic constraints to allow each part of the Mechanism to move only in one or more chosen degrees of freedom, which achieves a high precision and repeatability of movement, usually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the micropipette. * The sperm is then released into the oocyte. * The pierced oocyte has an excluded polar body at about 12'o clock indicating its maturity. The polar body is positioned at the 12'o'clock or 6 'o'clock position to ensure that the inserted micropipette does not disrupt the spindle inside the egg. * After the procedure, the oocyte will be placed into cell culture and checked on the following days for signs of fertilization. Thus, it can be seen that a complex process of in-vitro fertilization (IVF) is carried out by the Micromanipulator through the most recognized procedure called ICSI. 5. The applicant has briefly described the guiding principles determining the classification of a product under GST law as: (a) Classification under the Customs Tariff Act, 1975 along with relevant chapter notes pertaining to relevant chapter.(b) General Rules for interpretation of First Schedule to the Customs Tariff Act and (c) HSN explanatory notes released by the World Customs Organization. He has also stated that the aforementioned principles have been laid down on the basis of explanation (iii) and (iv) of Notification No.1/2017-Central Tax (Rate) dated 28.06.2017. The h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded that the above mentioned definitions gives an impression that an apparatus is a wider term than instrument and appliance and it consists of both. MM System has been designed to carry out a specific function of in-vitro fertilization with the help of various equipment like microscope, micromanipulator, micropipette and micro injector wherein microscope is a tool and multiple-micromanipulators are devices. 7. The applicant has stated that ICSI procedure as a part of IVF performed by using MM System can be said to be related to medical science because of the following reasons: (a) It is a part of the curriculum of |"Doctor of Medicine" course which is a medical degree. (b) Applicant has got its product registered under ISO 13485 which is for medical degrees. (c) The developer of this technique, Mr.Robert G.Edwards, was awarded the Nobel Prize for Physiology or medicine in 2010. (d) It has been described in Part 4.5. of draft "Assisted Reproductive Technologies(Regulation) Rules-2010 prepared by the Ministry of Health and Family Welfare, Government of India, New Delhi. 8. The applicant has given the definition of 'medical device' by World Health organization (WHO), Gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: "3.1 Chapter Note 3 of this chapter mentioned that "the provisions of Notes 3 and 4 to Section XVI apply also to this Chapter" which is as under: 3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. 4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole fails to be classified in the heading appropriate to the function. 9. The applicant has further submitted that even if it is presumed that other devices of MM system are designed for the purpose of carrying out two or more complementary or alternative functions, even then from an analysis of the above Section Note 3 and its applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and the said microscope is used merely as a visual aid and does not interfere with the main procedure which is Intra Cytoplasmic Sperm injection (ICSI); that in view of these facts, micromanipulator has pre-dominant function but not the microscope; that even as per General rules for interpretation, impugned item fosters classification under CH- 9018; that the MM system in terms of heading and chapter notes merits classification under CH- 9018. The applicant has referred to Rule 3 of the General Rules for Interpretation which reads as under: 3. When--- for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a)the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b)mixtures, composit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear that in case a specific entry exists, goods must be classified in that entry even though there is a general entry as well; that since CH- 9011 covers only a standalone microscope, MM system comprising microscope as a tool to enhance the magnification embedded with multiple manipulator systems should be considered as a instrument and appliances used in medical sciences; that even if MM system is a composite supply and two headings refer to part only of the materials i.e. 9011 refers to standalone microscope and 9018 refers to manipulator system then even in terms of Rule 3(b), classification shall be made under CH- 9018 i.e. heading which gives it its essential character; that in the present case, micromanipulator has the pre-dominant function because of the following reasons: (i) The weight of the microscope is 19 kgs.(approx.) whereas weight of manipulator is 21 kgs.(approx.). (ii) The value of microscope is YEN 8 lakhs .(approx.) whereas value of manipulator is YEN 13 lakhs.(approx.) The applicant has submitted that the trade practice does not practically permit a person to buy these products separately because it leads to cost difference to the extend of 70%; that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c.). This heading also includes universal microscopes, polarizing microscopes, metallurgical microscopes, stereoscopic microscopes, phase contrast and interference microscopes, reflecting microscopes, microscopes with drawing attachments; special microscopes for examining clock or watch jewels; microscopes with heating or freezing stages." Explanatory notes to CH- 9011 also describe Special purpose microscopes covered under CH-9011 which include Trichinoscopes, Microscopes for measuring or checking operations in certain manufacturing processes, laboratory measuring microscopes for separation of spectrograms and surgical microscopes. The applicant has stated that each of the above different microscopes are standalone microscopes whose principal function is magnification, are used without any medical device and are used by amateurs and teachers and not by professionals like the medical devices under CH- 9018. 14. The applicant has submitted that the distinction between CH 9011 and 9018 is the CH 9011 essentially refers to stand-alone microscopes whose principal function is magnification; that any medical, surgical or veterinary device (such as micromanipulator) even if fitted or equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o classify the goods, as presented, under heading no 90118000 of the First Schedule to Customs Tariff Act, 1975 suffers from inconsistency as 'microscope' cannot be an accessory of 'microscope'. Had it been the intent of the lower authorities to accord a separate and distinct classification to each of the two articles, it was necessary to ascertain the separate assessable values also. No exercise has been undertaken in that direction. 13. From the above, we conclude that the classification of the impugned goods under heading no 90118000 of First Schedule to the Customs Tariff Act, 1975 fails and, in the face of such failure and want of an alternative classification in the show cause notice, the declared classification must be accepted. We also do not find any reason to discard the declared classification as, contrary to the presumption of customs authorities, the impugned goods are instruments used for surgical therapy to overcome a physiological problem in a human body, viz., inability to conceive. It is not a diagnostic instrument that, in the medical field, a microscope is. 14. Thus, by application of rule 1 and rule 2 of General Interpretative Rules, we set aside the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, (iv) 14 per cent. in respect of goods specified in Schedule IV, (v) 1.5 per cent. in respect of goods specified in Schedule V, and (vi) 0.125 per cent. in respect of goods specified in Schedule VI Further, Explanation (iii) and (iv) of the said Notification read, as under: (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 20. We find that the applicant in his submission has focussed on the main function of his product 'micromanipulator' i.e. how it is used, what are the elements forming the micromanipulator system, how the Invitro fertilization procedure is conducted etc. They have given the definitions of various terms (which form th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to be made to the explanatory notes to the Harmonized Commodity Description and Coding System. But, prior to that, it is necessary to find out as to what a 'Micro-manipulator' is. We find that a micromanipulator is a device, which is used to physically interact with a sample under a microscope, where a level of precision of movement is necessary that cannot be achieved by the unaided human hand. 20.2 From the above, it can be derived that in the absence of a microscope, a micromanipulator cannot function i.e. a micromanipulator is dependent on the microscope to do the function that it is created for i.e. micromanipulation. However, since the applicant has time and again stressed on the point that the aforementioned product is correctly classifiable under Sub-heading 9018 and not under Sub-heading 9011 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), we need to examine each of the sub-headings in detail in order to find out under which sub-heading 'micromanipulator would be correctly classified. Let us first examine the sub-heading 9011. 21. In order to examine the aspect as to whether the product 'micromanipulator' finds mention under sub-heading 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.2 Special purpose microscopes include: (1) Trichinoscopes, a type of projection microscope, used for examining pork suspected of threadworm. (2) Microscopes for measuring or checking operations in certain manufacturing processes; these may be of the conventional types or may be special models designed for fitting to machines. These appliances include comparison microscopes ( for comparing the surface finish of precision articles with that of a standard article); co-ordinate reading microscopes (for locating the position of clock or watch parts); tool makers or other measuring microscopes ( for checking threads, profiles, gear-cutters or cutting tool profiles, etc.); small portable microscopes for placing directly on the object to be examined (for the Brinell hardness test, for printers' type, printing blocks etc.); centring microscopes (fitted on spindles of machine tools, instead of the tool, to bring the work into the correct position before working); etc. Some of the last mentioned instruments (e.g. those for checking the profile of worked parts), may be fitted with projection devices which are usually in the form of a small circular screen fitted on top of the microscop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision and perfection, for which a microscope with extremely powerful objective lenses and high magnification would be required. In view of the above, it appears that the 'micromanipulator' is nothing but a surgical microscope and should be rightly classified under the heading of 'microscope'. Further, Rule 2 of the General Rules for Interpretation to the First Schedule to the Customs Tariff Act, 1975(51 of 1975) reads, as under: "2(a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential characteristic of the complete or finished article. It shall also be taken to include a reference to that article complete or finished ( or falling to be classified as complete or finished by virtue of this rule), presented unassembled or dissembled. 2(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consistin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey have also gone on to describe in great detail, the procedure followed for IVF but have failed to justify how their product merits classification under Sub-heading 9018. However, as discussed above, since the procedure of micromanipulation cannot be carried out in the absence of a microscope and that the micromanipulator would be an incomplete product without a microscope, it can safely be concluded that the 'micromanipulator' is nothing but a microscope and should be rightly covered under the head of 'microscope'. Therefore, in view of the above discussions and in light of Rule 3(a) of the General Rules for Interpretation to the First Schedule to the Customs Tariff Act, 1975(51 of 1975), which very clearly stipulates that a specific description shall be preferred to headings providing a more general description, it can be concluded that in the instant case, the heading 'microscope' provides a more specific description of the product 'micromanipulator' than the general description given in sub-heading 9018. Therefore, we conclude that the said product would be rightly classified under 'microscope'. Also, in view of the above, the following judgements relied upon by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c microscope covered under the Sub-heading 9011 would micromanipulator be classified. From the procedure of micromanipulation described, it appears that the same can be compared to surgery. As can be seen from the explanatory notes to the Harmonized Commodity Description and Coding System, surgical microscopes find mention under the Sub-heading 9011 and tariff item no.90118000 i.e. other microscopes. Surgical microscopes are described as under: "Surgical microscopes for use by surgeons when operating on a very small portion of the body. Their light sources result in independent light paths which provide a three-dimensional image." 22.1 From the above, it can be concluded that the said product would be rightly classifiable as 'Surgical microscope' (Tariff item No.90118000) under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) covered under the Sub-heading "Compound optical microscopes, including those for photomicrography, cinephotomicrography or microprojection." 23. Next, we are required to examine the aspect as to whether the product 'micromanipulator' finds mention under sub-heading 9018 for which we would be required to go through the sub-heading 9018 as app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on apparatus and haemofiltration Instruments. 9018 90 31 ---- Renal dialysis equipment(artificial kidneys, kidney machines and dialysers) 9018 90 32 ---- Blood tranfusion apparatus 9018 90 33 ---- Haemofiltration instruments. ---- Anesthetic apparatus and instruments, ENT precision instruments, acupuncture apparatus, and endoscopes : 9018 90 41 ---- Anesthetic apparatus and instruments. 9018 90 42 ---- ENT precision instruments. 9018 90 43 ---- Acupuncture apparatus 9018 90 44 ---- Endoscopes ---- Other : 9018 90 91 ---- Hilerial or venous shunts 9018 90 92 ---- Baby incubators 9018 90 93 ---- Heart-lung machines 9018 90 94 ---- Defibrillators 9018 90 95 ---- Fibrescopes 9018 90 96 ---- Laproscopes. 9018 90 97 ---- Vetrasonic lithotripsy instruments 9018 90 98 ---- Apparatus for nerve stimulation 9018 90 99 ---- Other 23.1 Also, the explanatory notes to the Harmonized Commodity Description and Coding System with respect to Sub-heading 9018 (which covers all the products falling under the sub-heading No.9018) and may help us in understanding the products covered under the said heading are described hereunder. Portions of notes pertaining to Dental instruments an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uids, urine etc., whether or not such tests serve in diagnosis (generally heading 90.27). (q) Medical or surgical furniture, including that for veterinary use (operating tables, examination tables, hospital beds, dentists chair not incorporating dental appliances of this heading etc. (heading 94.02). 23.2 On the other hand, this heading includes specialised measuring instruments used exclusively in professional practice, such as cephalometers, dividers for measuring cerebral lesions, obstetrical pelvimeters etc. It should also be noted that a number of the instruments used in medicine or surgery (human or veterinary) are, in effect, tools (e.g. hammers, mallets, saws, chisels, gouges, forceps, pliers, spatula, etc.), or articles of cutlery (scissors, knives, shears etc.). Such articles are classified in this heading only when they are clearly identifiable as being for medical or surgical use by reason of their special shape, the ease with which they are dismantled for sterilisation, their better quality manufacture, the nature of the constituent metals or by their get-up (frequently packed in cases or boxes containing a set of instruments for a particular treatment: childbirth, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes, keratomes. (ii) Diagnostic instruments such as opthalmoscopes; binocular loupes with head bands and binocular type microscopes, consisting of a microscope, an electric lamp with a slit, and a head rest, the whole being mounted on an adjustable support, for the examination of the eyes; tonometers(for testing the intra-ocular tension) eye specula. (iii) Orthoptic or sight setting apparatus including ambyloscopes, retinoscopes, skiascopes, strabometers, keratometers, keratoscopes, eye measurement meters designed to measure the distance between the pupils, trial cases (of lenses) and trial frames (for carrying the trial lenses), optometric scales, test charts. However, optometric scales and charts on paper, paperboard or plastics, used for colour perceptions are excluded. (Chapter 49). This heading also covers electrically heated compresses for the eyes, and electromagnets designed for removing metallic particles from the eyes. (D) Ear instruments e.g. auriscopes. However tuning forks, whether or not for medical use are excluded (heading 92.09). (E) Anaesthetic apparatus and instruments (Face masks, face-piece harness, intratracheal tubes etc.). (F) Instruments for nos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actinomycosis, and exceptional blood loss anaemia. (Q) Lamps which are specially designed for diagnostic, probing, irradiation etc.purposes. Torches, such as those in the shape of a pen are excluded (heading 85.13) as are other lamps which are not clearly identifiable as being for medical or surgical use (heading 94.05). (IV) SCINTIGRAPHIC APPARATUS: These are apparatus which scans parts of the body and creates image of an organ or record of it's functioning. It includes apparatus incorporating a scintillation counter the data from which is converted into analogue signals for the purpose of making medical diagnosis (e.g. gamma camera, scintillation scanner). (V) OTHER ELECTRO-MEDICAL APPARATUS: This heading also covers electro-medical apparatus for preventive, curative or diagnostic purposes, other than X-ray etc. apparatus of heading 90.22. This group includes: (1) Electro-diagnostic apparatus which include: (i) Electro-cardiographs (apparatus, which by means of currents produced by contractions of the cardiac muscles, records heart movements as electrocardiograms.). (ii) Phonocardiographs (specially designed to register heart noises as phonocardiograms; they may a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e blood (electrocoagulation). Certain combined instruments may, by the use of control pedals, be made to act interchangeably as electrocutters or electrocoagulators. (8) Actinotherapy apparatus: These employ radiations within, or more generally, just outside, the visible spectrum (infra-red, ultra-violet) for treatment of certain diseases or for diagnostic purposes (special lighting to reveal skin diseases). This apparatus generally incorporates lamps though infra-red apparatus may be fitted with heating resistances or heating panels with reflectors. (9) Artificial incubators for babies: Basically these consist of a transparent cubicle of plastics, electrical heating equipment, safety and warning devices, and oxygen and air filtering and regulating apparatus. In most cases they are mounted on a trolley and have built-in baby scales. Cases containing electrodes or other devices for use with the apparatus described above are also included in this group. This heading also excludes prenatal listening apparatus for non-medical use of heading 85.18 (see the explanatory notes to that heading)." 23.3 We have gone through the above explanatory notes to the Harmonized Commodity Descri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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