CESTAT Delhi Holds Glucometers Are Instruments For Chemical Analysis, Not Medical Diagnostic Devices

The Principal Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has allowed Aspen Diagnostics Pvt. Ltd.'s appeal against the customs department's attempt to reclassify its imported diagnostic devices, including glucometers, from instruments for chemical analysis to medical diagnostic instruments.

The tribunal set aside the differential duty demand and penalties.

A bench of Judicial Member Ashok Jindal and Technical Member K. Anpazhakan held that the issue was no longer open to debate in view of earlier Tribunal rulings and the Supreme Court's affirmation of one such decision. The bench held that Aspen had correctly classified the subject goods and rightly availed the exemption benefit.

The dispute arose from imports made by Aspen Diagnostics between September 2020 and December 2021 through 66 bills of entry. The goods included Blood Glucose Meters/glucometers, Urine Analyzers, Blood Gas Analyzers, and Chemistry Analyzers.

Aspen classified the imported goods as instruments for chemical analysis. It claimed exemption from basic customs duty under the applicable notification. The company also paid integrated GST at the applicable rates.

However, the customs department took the view that the classification adopted by the importer was incorrect. It argued that the goods should instead be treated as medical diagnostic instruments. On that basis, it issued a show cause notice in September 2022 seeking differential duty and penalties.

The adjudicating authority later confirmed the demand. Aspen challenged that order before the Tribunal.

Appearing for the company, counsel argued that the issue had already been settled by earlier Tribunal rulings in Bayer Pharmaceuticals Pvt. Ltd. and Abbott Healthcare Pvt. Ltd. In those cases, glucometers had been held classifiable as instruments for chemical analysis.

The appellant also pointed out that the tribunal's ruling in Abbott Healthcare was later affirmed by the Supreme Court. It argued that the issue was therefore no longer res integra.

The Revenue, on the other hand, argued that blood glucose meters are medical diagnostic instruments. It contended that they are not laboratory analytical instruments and that the department's classification was correct.

Accepting Aspen's case, the tribunal relied on the earlier precedents and held that the current classification of the subject goods fell under the tariff entry claimed by the importer. It held that the exemption benefit had been correctly availed.

The tribunal also noted the reasoning adopted in the earlier rulings, including the interpretation of the HSN Explanatory Notes, which distinguished instruments used predominantly in professional medical practice from instruments for chemical analysis.

Finding no merit in the impugned order, the tribunal set it aside and allowed the appeal with consequential relief.

For Appellant: Advocates B.L. Narasimhan, Anuraag Kapur and Kaushal Jaisalmeria

For Respondent: N.M. Goyal, Authorised Representative