Medical device parts classification under Chapter 90 prevails over residual heading, with confiscation and penalties set aside.

Parts and accessories suitable solely or principally for dialysis machines were classified with the medical apparatus under Chapter Note 2(b) of Chapter 90 and the General Rules for Interpretation, so CTH 9018 applied rather than the residual CTH 9033. The departmental circular clarifying that such parts attract 12% IGST was binding on departmental officers, and the prior tribunal view approved by the Supreme Court supported that classification. As the classification in the impugned order was unsustainable, the foundation for confiscation, redemption fine and penalties also failed, and those consequences were set aside.

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Issues: (i) Whether the imported parts and accessories for dialysis machines were classifiable under CTH 9018 or under the residual CTH 9033 for the purpose of IGST. (ii) Whether confiscation of the goods and the consequential redemption fine and penalties were sustainable.

Issue (i): Whether the imported parts and accessories for dialysis machines were classifiable under CTH 9018 or under the residual CTH 9033 for the purpose of IGST.

Analysis: The dispute was resolved by applying Chapter Note 2(b) of Chapter 90 and the General Rules for the Interpretation of the Customs Tariff. Parts and accessories suitable for use solely or principally with a particular medical apparatus are required to be classified with that apparatus, while the residual entry in heading 9033 applies only to parts and accessories not specified or included elsewhere in Chapter 90. The departmental circular clarifying that parts and accessories suitable for use solely or principally with medical devices falling under heading 9018 attract 12% IGST was held to be binding on departmental officers. The issue was also treated as settled by the earlier tribunal decision upheld by the Supreme Court.

Conclusion: The imported goods were held classifiable under CTH 9018 and liable to IGST at 12%, not under CTH 9033.

Issue (ii): Whether confiscation of the goods and the consequential redemption fine and penalties were sustainable.

Analysis: Once the classification adopted in the impugned order was found unsustainable and the applicable IGST rate was held to be 12%, the foundation for confiscation and the penal consequences could not survive.

Conclusion: Confiscation, redemption fine and penalties were set aside.

Final Conclusion: The impugned order was set aside and the appeal was allowed on the basis that the goods were correctly classifiable as parts and accessories of the medical apparatus and the higher IGST demand and penal consequences were unsustainable.

Ratio Decidendi: Parts and accessories suitable for use solely or principally with a medical apparatus of Chapter 90 must be classified with that apparatus under Chapter Note 2(b), and the residual heading 9033 applies only where no specific classification elsewhere in the chapter is available; departmental circulars clarifying this position are binding on field officers.

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