Legal principle

Accessories suitable for use with a number of machines falling under the same Customs Tariff Heading (CTH) are to be classified with those machines under Note 2(b) of Chapter 90 of the Customs Tariff Act, 1975. However, when accessories are suitable for use not only with machines under a particular tariff heading but also with machines under another tariff heading attracting different duty rates, they must be classified under residuary CTH 9033 00 00 as accessories for machines in Chapter 90 not specified or included under a particular tariff heading, as per Note 2(c). An accessory that has no independent diagnostic capability and only performs an ancillary function of transferring diagnostic data onto film cannot be classified as a 'diagnostic apparatus' under CTH 9018 90 19.

Court decision

The Supreme Court dismissed the appeal, holding that the laser imagers are correctly classifiable under CTH 9033 00 00 and not under CTH 9018 90 19. The Court affirmed the decision of the Customs, Excise and Service Tax Appellate Tribunal, South Zone Bench, Chennai. Accessories suitable for use with machines falling under multiple tariff headings (CTH 9018 and CTH 9022) must be classified under residuary CTH 9033 00 00. The appeal was dismissed and pending applications were disposed of.

Facts

M/s. Carestream Health India Pvt. Ltd. imported 'Dryview 6850 Laser Imagers W/3D' from China under Bill of Entry dated 02.04.2013. The appellant classified them under Customs Tariff Heading (CTH) 9018 90 19 in Chapter 90 of Section XVIII of the First Schedule to the Customs Tariff Act, 1975, claiming them as 'Other diagnostic instruments and apparatus'. The Assistant Commissioner of Customs, Chennai, rejected the classification vide Order-in-Original dated 24.06.2013 and re-classified them under CTH 9033 00 00 as accessories not specified or included elsewhere in Chapter 90. The Commissioner of Customs (Appeals) affirmed this by Order-in-Appeal dated 10.03.2014. The Customs, Excise and Service Tax Appellate Tribunal, Chennai, dismissed the appeal vide Final Order dated 21.08.2024. The laser imager is a printer using photo thermographic (dry laser) technology to develop images on film. It interfaces with MRI, CT, FFDM, DR, CR, PACS, Digital Fluoroscopy and other grayscale film applications, but has no independent diagnostic skills or capabilities. The differential duty demand was Rs. 5,21,616/-, the difference in duty rate being 2.5%. The laser imagers are compatible with machines falling under CTH 9018 and also CTH 9022, which attract different tariff rates.

Key provisions

• Section 130E(b), Customs Act, 1962 — Appeal to Supreme Court