Upon an independent scientific examination of the function of a Glucometer, the Mumbai Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Glucometers merit classification under CTH 9027 as instruments for chemical analysis and not CTH 9018 as medical diagnostic instruments for customs purposes.
The Division Bench comprising Ajay Sharma (Judicial Member) and MM Parthiban (Technical Member) observed that examined the competing tariff headings — CTH 9018 covering ‘Instruments and appliances used in medical, surgical, dental or veterinary sciences’ and CTH 9027 covering ‘Instruments and apparatus for physical or chemical analysis’, and undertook a scientific analysis of how a Glucometer actually functions. The Tribunal observed that a Glucometer measures the concentration of glucose in a blood sample through a chemical/enzymatic reaction (involving enzymes such as glucose oxidase or glucose dehydrogenase) occurring on the test strip, analyses the reaction, and converts it into a blood glucose reading, thereby performing chemical analysis of blood glucose levels.
The Tribunal firmly rejected Revenue’s premise that a Glucometer “cannot diagnose or provide any medical assistance without the help of professionals”, holding that the measurement of blood-glucose level by a Glucometer is itself the diagnostic step, a reading outside normal parameters, whether indicating hypoglycaemia or hyperglycaemia, is what enables the medical practitioner to commence appropriate treatment. The Tribunal further held that “the mere fact that an instrument is used in the field of medicine does not, by itself, place it under CTH 9018 where a heading describing its analytical function is available”.
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Briefly, Life Scan Medical Devices India Pvt Ltd., a SEZ importer, imported ‘One Touch Select Simple Blood Glucose Monitoring System’ and ‘One Touch Select Plus Simple Blood Glucose Monitoring System’ (Glucometers) and classified them under Customs Tariff Item (CTI) 90278090 — ‘Instruments or Apparatus for chemical analysis; Others’ — claiming NIL Basic Customs Duty (BCD). Revenue disputed this, contending that the goods were correctly classifiable under CTI 90189099 — ‘Instruments and appliances used in medical, surgical, dental or veterinary sciences; Diagnostic instruments and apparatus; Other’ — attracting BCD @ 10%, reduced to 5% under Sr. No. 576 of Notification No. 50/2017-Customs dated 30.06.2017 for ‘Blood Glucose Monitoring System (Glucometer) and test strips’ classifiable under Chapter 90. The goods were provisionally assessed and cleared under CTI 90278090, with duty paid under protest. After SVB proceedings, the provisional assessment was finalised vide Order-in-Assessment, classifying the goods under CTI 90189099 @ 5% BCD and demanding differential duty with interest. The Commissioner (Appeals) allowed the importer’s appeal, setting aside the Order-in-Assessment.
