Glucometers Classified as Analytical Instruments Under CTH 9027: CESTAT Mumbai Ruling Explained

Background of the Dispute

The appeal before the CESTAT Mumbai in Commissioner of Customs(Export) Vs Life Scan Medical Devices India Pvt. Ltd. revolved around a narrow but commercially significant issue: the correct customs classification of imported glucometers and the resultant Basic Customs Duty (BCD) liability.

The assessee, a Special Economic Zone (SEZ) unit, imported:

  • “One Touch Select Simple Blood Glucose Monitoring System”; and
  • “One Touch Select Plus Simple Blood Glucose Monitoring System”.

These devices were declared under Customs Tariff Item (CTI) 90278090 as “Instruments or Apparatus for chemical analysis; Other Instruments and Apparatus; Others,” claiming clearance at NIL BCD as per the Customs Tariff.

The Revenue authorities, however, treated the products as medical diagnostic devices falling under CTI 90189099 – “Instruments and appliances used in medical, surgical, dental or veterinary sciences … Diagnostic instruments and apparatus; Other” – which attracts a standard BCD rate of 10%. Nevertheless, due to Sr. No. 576 of Notification No. 50/2017-Cus dated 30.06.2017, the effective customs duty on “Blood Glucose Monitoring System (Glucometer) and test strips” classifiable under Chapter 90 or any other chapter stands reduced to 5% BCD.

The core controversy, therefore, was not about the concessional notification itself, but about which heading – 9018 or 9027 – correctly describes glucometers for tariff classification purposes.

Procedural History

  1. The goods were at first assessed provisionally under CTI 90278090, in line with the assessee’s declaration.
  2. The matter was referred to the Special Valuation Branch (SVB) for verification of the declared transaction value. The assessee paid duty under protest during the provisional assessment stage.
  3. After the SVB enquiry concluded, the declared value was accepted. However, at the time of finalisation of provisional assessment vide Order-in-Assessment dated 28.02.2022, the assessing authority:
    • Reclassified the goods under CTI 90189099;
    • Applied BCD at the effective rate of 5% under Notification No. 50/2017-Cus;
    • Demanded differential duty along with interest, setting off the amounts already paid under protest against this liability.
  4. The assessee challenged the Order-in-Assessment before the Commissioner of Customs (Appeals), JNCH, Nhava Sheva, Mumbai-II. By Order-in-Appeal dated 24.05.2023, the Commissioner (Appeals) allowed the assessee’s appeal and restored classification under CTI 90278090 / CTH 9027.
  5. Aggrieved by this relief granted to the assessee, the Revenue filed the present appeal before the CESTAT Mumbai.

Grounds Taken by the Revenue

The Revenue advanced a multi-pronged challenge to the appellate order, broadly structured around the following propositions:

  • Misapplication of Rule 3(a) of the General Rules for the Interpretation of the Customs Tariff
    The department argued that Heading 9018 is more specific to instruments used in medical, surgical, dental or veterinary sciences, and therefore must prevail over Heading 9027, which deals with instruments for physical or chemical analysis.

  • Incorrect interpretation of the HSN Explanatory Notes to Heading 90.18
    According to the Revenue, glucometers are primarily medical diagnostic instruments and the HSN Notes to Heading 90.18 support their inclusion under that heading.

  • Ignoring Legislative Intent behind Notification No. 50/2017-Customs
    It was contended that the mention of “Blood Glucose Monitoring System (Glucometer) and test strips” under Sr. No.