By TIOL News Service

MUMBAI, OCT 09, 2015: THE appellant imported blood Glucose meters having the brand-name 'Breeze 2 Meter'. The imported product consisted of a blood glucose meter and the user guide.

Classification of the goods was sought under tariff item 9027 8090 and exemption from basic customs duty was claimed under Notif. 24/05-Cus dated 1.3.2005.

Not impressed with this classification,the Assistant Commissioner held that the goods are classifiable under Heading 90.18 which covers instruments and appliances used in medical, surgical, dental or veterinary sciences.

Before the CESTAT, the importer submitted that the Commissioner (Appeals) is not following an earlier decision dt. 12.11.2008 where it is held that blood glucose meter is classifiable under Heading 90.27 as an instrument for chemical analysis. Inasmuch as by classifying the impugned goods under Heading 90.18 as an instrument or appliance used in medical sciencehas resulted in judicial indiscipline. He relied on the Supreme Court judgment in the case of Birla Corporation Ltd. - 2005-TIOL-99-SC-CX.

It is also submitted that internationally Glucose meters are classified under heading 90.27 only. Reference is made to the ruling of United States Customs Department & the Canadian International trade Tribunal which classifies similar products under Heading 90.27.

The appellant also argued that the distinction made by the Commissioner(A) that the earlier order as well as the international rulings dealt with complete glucose monitoring systems whereas the goods in the present case are only Glucose meters with user guide is not appropriate as it is the glucometer that gives the essential character to the entire kit and the test strip does not play any role in testing and analyzing of the sample by the glucose meter. To substantiate this point, the appellant 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% and emphasized that the above entry would indicate that the glucose monitoring system refers to glucometer only.

Mention is also made of the HSN Explanatory Note to Heading 90.18 which states that the goods therein are handled by professionals which is not so in the case of Glucose meters; para (o) of the Explanatory Note states 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.

The Bench was shown the product imported ('contour TS meter') and covered by the earlier order as well the product involved in the present proceedings ('breeze 2 meter') and this is what was noticed-

'Contour TS meter'- consists of Glucose meter, test strips, Lancing device and user guide.

'Breeze 2 meter' - consists of Glucose meter and user guide.

The Tribunal also observed -

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 the essential function. The essential function of a Glucose meter is 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 90.27 whereas the Glucose meter without strips will get classified under heading 90.18. Therefore we reject this argument of the Commissioner.

Taking a clue from HSN Explanatory Notes &General Rules for the Interpretation of the Customs Tariff (Rule 3) which says that a specific description is to be preferred over a general description, the Bench held that heading 90.27 which covers instruments for chemical analysis is more specific than the description of heading 90.18 which covers instruments used in medical, surgical etc. sciences.

Adverting to the HSN Explanatory Note to heading 90.18 which states that only those instruments fall under heading 90.18 which are used in professional practice in the vast majority of cases and since the Glucose meters were mostly used by individuals at home or at the workplace, that is, by common people other than professional practitioners, the CESTAT concluded that the impugned goods, that is Glucose meters are classifiable under heading 90.27and are eligible for exemption under notification No. 24/05-CUS dated 01.03.2005.

The order was set aside and the Appeal was allowed.

(See 2015-TIOL-2159-CESTAT-MUM)