By TIOL News Service

MUMBAI, JAN 01, 2019: THE appellant imported goods and claimed their classification under heading no. 9018 9099 of the CTA, 1975 as 'Instruments and appliances used in medical, surgical, dental or veterinary sciences, including scientigraphic apparatus, other electro medical apparatus and sight testing instruments'.

The Customs authorities opined that the goods are 'microscopes classifiable under heading no 9011 8000 in the residual sub-heading within the heading 'compound optical microscopes, including those for photomicro-graphy, cinephotomicro-graphy or micro projection.'

The appellant is, therefore, before the CESTAT.

After considering the submissions, the Bench inter alia observed -

+ The rules of interpretation appurtenant to the Tariff are logical and sufficiently structured to deal with most situations. Consequently, any interpretation of the scope, and relevance, of a heading, or sub- heading, would necessarily have to be made within the context of those Rules.

+ In such a dispute over the applicability of an exemption, the pursuit of maximising by Revenue and of minimising on the part of assessee lends an inherent bias which is best neutralised, on either side, by focusing on the resolution of the dispute in terms of the heading alone.

+ The dispute does not travel beyond classification within Chapter 90 of First Schedule to the Customs Tariff Act, 1975 which is that of 'optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof' and to be resolved is whether the impugned goods are 'compound optical microscopes' and, if they are not, the claim of the appellant would succeed.

+ The classification adopted by the lower authorities is that of 'microscope'. There is no doubt that the goods, as presented, include a microscope. The description of the impugned goods goes beyond to encompass 'micromanipulator' along with 'microscope' and to be deployed in treatment of infertility…

+ It is, thus, abundantly clear that the goods, as presented, consist of a microscope and a micromanipulator… The material fact is that in vitro fertilisation cannot be carried out without the presence of both the components.

+ It is not the case of the customs authorities that the goods, as presented, is only a microscope. Neither is it their case that the microscope can, on its own, perform the tasks necessary for in vitro fertilisation.

+ The heading proposed by customs authorities is that of 'parts and accessories' under 'microscope'. In the context of the functions performed by 'micromanipulator', it can, by no stretch, be considered to be an accessory of 'microscope'.

+ In the absence of such distinction, the attempt to classify the goods, as presented, under heading no 9011 8000 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.

+ 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.

Conclusion: Classification of the impugned goods under heading no 9011 8000 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.

By application of rule 1 and rule 2 of General Interpretative Rules, the impugned order was set aside and the appeals were allowed.

(See 2019-TIOL-12-CESTAT-MUM)