Customs | I-STAT Blood Gas Cartridges Are Accessories Of Analyser And Not Diagnostic Reagents; No Differential Duty Payable: CESTAT Mumbai

Dr. Suvendu Kumar Pati (Judicial Member) and R. Bhagya Devi (Technical Member) held that since the glucometer strips have the same function of the Cartridges that are used in the I STAT analyser, accordingly the products are rightly classifiable under CTH 9027.

In the case at hand, the assessee/appellant imported cartridges for I-STAT Analyzer Immuno along with the accessories and cartridges and classified the same under Customs Tariff Head (CTH) 9027.

The revenue alleged that the product was rightly classifiable under CTH 3822 0019 and accordingly notice was issued for reclassifying the products and confiscating the goods under Section 111(m) of the Customs Act, 1962.

The Commissioner held that the product was rightly classifiable under CTH 38220019 and confirmed the differential duty of Rs.5,06,61,014, also held that the goods were liable for confiscation.

The Commissioner further imposed redemption fine of Rs.2,30,00,000 under section 125(1) of the Customs Act, 1962 and imposed penalty equal to the duty amount under Section 114A of the Customs Act, 1962.

The assessee argued that the product cannot be classified under CTH 3822 because this chapter heading dealt with only diagnostic or laboratory reagents while the product in question is an essential accessory for the analyzer and it is a single use product and contains many sub assembles found in the complex laboratory systems, therefore rightly classifiable under chapter heading 9027.

The issue before the bench was whether the cartridges imported by the assessee are classifiable under CTH 3822 0019 or under CTH 9027 8090.

The bench found that the handheld device i.e. the ISTAT analyser is only a mechanism to read the results produced by the cartridge when a sample of blood is placed on it which works on sensors and not based on any chemical reaction. So, it is clear that that the cartridges as such are of no use but are to be necessarily used with the hand-held device I STAT Analyser.

The Tribunal stated that the Chapter Heading 3822 includes diagnostic reagents such as pregnancy kits, AIDs diagnosing Kits etc which react based on the chemical reaction and the results are displayed. However, based on the technical literature of the impugned product though the cartridge is to test various parameters based on the blood samples placed on it, the results of it are known only when it is placed on to the I STAT analyser. Therefore, since they do not provide any results based on chemical reactions as happens in the case of pregnancy kits they cannot be held as a diagnostic agent to be classified under CTH3822.

The description of the goods is clearly shown as accessories of CTH 9027 as earlier claimed by the assessee and disputed by the revenue only to the extent of reclassifying the I STAT analyser under CTH 9018 considering the cartridges imported along with it as accessories. Therefore, the question of misdeclaration cannot be alleged since the description of the products are clearly mentioned, added the bench.

In view of the above, the Tribunal allowed the appeal.

Case Title: M/s. Sandor Medicaids Pvt. Ltd. v. Commissioner of Customs (Imports)

Case Number: Customs Appeal No. 87321 of 2024

Counsel for Appellant/ Assessee: Anil Balani and Ananta Khandait

Counsel for Respondent/ Department: Ram Kumar

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