Glucometers Are Instruments For Chemical Analysis, Not Medical Diagnostic Devices For Customs Duty: CESTAT Mumbai

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that glucometers are classifiable as instruments for chemical analysis and not as medical diagnostic instruments for customs purposes.

Upholding the Commissioner (Appeals)' order in favour of Life Scan Medical Devices India Pvt. Ltd., the tribunal dismissed the Customs Department's appeal.

The bench of Judicial Member Ajay Sharma and Technical Member M. M. Parthiban examined the scientific functioning of a glucometer and observed that its analytical function warranted classification under the tariff heading for instruments used for chemical analysis.

The tribunal observed, "Viewing scientifically, a Glucometer analyzes a biological sample (blood), detects glucose through a chemical/enzymatic reaction involving enzymes such as glucose oxidase or glucose dehydrogenase and quantifies the glucose concentration based on the reaction signal. Therefore, the device performs chemical analysis of blood glucose levels. The mere fact that an instrument is used in field of medicine does not, by itself, place it under CTH 9018 where a heading describing its analytical function is available."

The dispute arose after Life Scan Medical Devices India imported "One Touch Select Simple Blood Glucose Monitoring System" and "One Touch Select Plus Simple Blood Glucose Monitoring System".

The company classified the products under the customs tariff heading covering instruments for chemical analysis and claimed nil Basic Customs Duty. Customs authorities, however, classified the goods as diagnostic instruments used in medical sciences, attracting an effective Basic Customs Duty of five per cent under the applicable notification.

Examining how the device operates, the tribunal noted that a glucometer measures the concentration of glucose in a blood sample through a chemical or enzymatic reaction occurring on a test strip. It then analyses the reaction and converts it into a blood glucose reading displayed within a few seconds.

The tribunal also rejected the department's contention that a glucometer merely assists medical professionals and does not itself perform a diagnostic function.

The tribunal observed, "The measurement of the blood-glucose level by a Glucometer is itself the diagnostic step as a reading outside the normal parameters, whether indicating hypoglycaemia or hyperglycaemia, is what enables the medical practitioner to commence appropriate treatment. The analytical function of the device is thus integral to, and not divorced from, its clinical use."

The tribunal relied on its earlier decision in Bayer Pharmaceuticals, the Bombay High Court's judgment in Ascensia Diabetes Care India Pvt. Ltd., its subsequent decision in Abbott Healthcare Pvt. Ltd., and the Supreme Court orders dismissing the department's challenges to those rulings.

Finding no reason to take a different view, it upheld the Commissioner (Appeals)' order and dismissed the Revenue's appeal.

For Appellant: Dinesh Nanal, Dy. Commissioner (AR)

For Respondent: Akhilesh Kangsia, Advocate with Ms Shruti Khanna, Advocate