CESTAT Holds MRI Monitors Attract 18% IGST, Sets Aside 28% Levy On Wipro GE Healthcare Imports

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at Mumbai has set aside customs orders against Wipro GE Healthcare Pvt. Ltd. that had upheld the levy of 28% integrated GST on medical monitors imported for use with MRI systems, holding that the higher tax could not be sustained.

A Bench of Technical Member C.J. Mathew and Judicial Member Ajay Sharma found that customs authorities had wrongly rejected Wipro GE's request to amend the bills of entry and had continued to assess the goods at 28% IGST despite the applicable tariff entry and rate notification providing for a lower rate.

The case concerned imports of Barco monitors supplied along with magnetic resonance imaging systems. Wipro GE classified the monitors under Heading 8528 and claimed IGST at 18%.

While basic customs duty was not in dispute, customs authorities assessed IGST at 28% and rejected the company's request to amend the bills of entry under Section 149 of the Customs Act. The company paid the higher tax under protest and challenged the assessment and the refusal to amend before the Tribunal.

Before the tribunal, Wipro GE said the monitors met the technical requirements for classification under Heading 8528 and were capable of being connected to automatic data processing machines. It also pointed out that identical goods imported by it had already been assessed at 18% IGST by customs authorities in Chennai. The Department defended the assessment at the higher rate.

In reaching its decision, the Tribunal followed its earlier ruling in Philips India Ltd., which has since been upheld by the Supreme Court. Relying on that settled position, it said monitors must be classified based on what they are technically capable of doing, and not on how they are eventually used. On that basis, the Bench held that the lower IGST rate under the relevant entry applied to the monitors imported by Wipro GE.

The Tribunal also relied on CBIC Circular No. 33/2007-Cus dated 10 September 2007, which laid down technical parameters distinguishing computer monitors from video/TV monitors, noting that the impugned order failed to examine these details.

The tribunal also referred to earlier decisions, including Ortho Clinical Diagnostics India Pvt. Ltd., to conclude that customs officers, while acting under the Customs Act, cannot interfere with the IGST rate claimed by an importer, since the levy of integrated tax operates under a separate statutory framework.

The bench further found fault with the reasoning adopted by the Commissioner (Appeals), particularly the view that the concessional IGST rate applied only to a specific tariff item rather than to the broader tariff heading mentioned in the notification.

It also noted that customs authorities had failed to examine the technical characteristics of the monitors in light of existing departmental guidance, which lays down parameters to distinguish computer monitors from television or video monitors.

Finding no misdeclaration and no prejudice to the revenue, the tribunal set aside the orders sustaining IGST at 28%, dropped confiscation and penalty, and restored the matter to the proper officer to finalise the assessment in accordance with law.

For Petitioner: Shri Roshil Nichani,

For Respondent: Shri Jitesh Kumar Jain, Joint Commissioner (AR)