TaxTMI 
TaxTMI 
2026 (2) TMI 1035
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....tial duty. The goods have also been held liable to confiscation under sections 111(d) and (m) of the Customs Act 1962 [the Customs Act] Penalties under section 112(a) and section 114AA of the Customs Act have also been imposed upon the appellant. 2. Customs Appeal No. 50796 of 2020 has been filed by Yogesh More, Manager, Customer Operations of the appellant, to assail that portion of the order dated 17.02.2020 passed by the Additional Director General that imposes a penalty of Rs. 10 lakhs upon him under section 112(a) of the Customs Act. 3. The appellant claims that it is engaged in trading and distribution of medical equipments such as computed radiography systems, direct radiography solutions and image processing systems to cater to the needs of hospitals, medical laboratories and medical colleges. In relation to its business activities, the appellant imported various models of thermal printers, namely Drystar 5301, Drystar 5302, Drystar 5503 and Drystar Axys [the goods] during the relevant period from 01.07.2017 to 31.03.2019. The appellant claims that as all the said goods are used in medical sciences it classified them under CTI 9018 90 99 as 'Other' instruments and app....
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....h in turn are connected to CT Scanner/MRI Scanner etc and are capable of printing images on any print media and need not only be paper. In the current case the Thermal Printers imported by the Noticee is capable of connecting to networks and printing images on the print media. 5.3.3.4 The moot point to note is whether thermal printers perform any exclusive diagnostic function that would enable them to be considered as an extension of medical instrument or an appliance. As brought out in the literature of the product, it is clear that it is not the case that the present series of thermal printers are functional only if they are connected to medical imaging devices. Indeed, it is clear that the thermal printers in question can be attached to any personal computer which is configured to transmit its images in DICOM protocol. Moreover, the thermal printer does not by itself perform any diagnostic function. It is clear from the facts above that any medical professional could read the image of the X ray from the system itself and diagnose the medical complication. It is not necessary that the medical complication is diagnosed only after printing it out on the X-Ray Film. This fa....
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.... is clear that the printer is not an essential part of any medical apparatus, as all the medical equipment, which generate DICOM images are stored in console and from console the images can be viewed. Only if the print is required, the imager is used for taking print in a dry image film. The above facts were also admitted by the personnel of M/s AGFA during the statements." (emphasis supplied) 7. The relevant portion of the order that deals with the invocation of the extended period of limitation under section 28(4) of the Customs Act is reproduced below: "5.4.2 Section 17 of the Customs Act, 1962 introduced self-assessment of goods by the importers. Accordingly, the impugned goods were self-assessed by the Noticee and Bills of Entry were filed wherein wrong declarations were made intentionally. Under the self-assessment procedure, it is obligatory on the part of importers to correctly declare all the particulars such as description of the goods, CTHS/CETHS and Notifications for claim of applicable rates of duties. While claiming any classification or exemption, it is obligatory on the part of the Noticee to check the applicability of classification/exemption claimed....
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....are liable to be set aside; (v) Section 3(12) of the Customs Tariff Act, 1975 does not borrow the machinery provisions pertaining to interest, and penalty from the Customs Act. In the absence of which, demand of integrated tax, interest and penalty are not sustainable; and (vi) Penalty under section 112 is not imposable on Yogesh More. 9. Shri Mihir Ranjan, learned special counsel of the department, however, supported the impugned order and submitted that: (i) The imported goods are thermal printers used for printing output produced by various medical equipment, such as CT scan machines, MRI machines, Tomographs and Mammograms. They are not part of any instruments or appliances used in medical, surgical, dental, or veterinary sciences; (ii) The appellant imported mainly Drystar printers, which work one thermal printing technology. Printers working on the thermal print process are categorized as dry or wet, depending on the type of film development process. However, there is no difference in the print process/technology between dry and wet printers. All the AGFA Drystar printers were dry and printed images on thermally sensitive media, i.e. hea....
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....functional exploratory examinations or for checking physiological parameters): xxxxx xxxxxx xxx xxx xxx 9018 90 - Other instruments and appliances: --- Diagnostic instruments and apparatus: xxxxx xxxxxx xxx xxx xxx --- Surgical tools: xxxxx xxxxxx xxx xxx xxx --- Renal dialysis equipment, blood transfusion apparatus and haemofiltration instruments: xxxxx xxxxxx xxx xxx xxx --- Anesthetic apparatus and instruments, ENT precision instruments, acupuncture apparatus, and endoscopes: xxxxx xxxxxx xxx xxx xxx --- Other: 9018 90 91 ---- Hilerial or venous shunts. . . . . . . . u 10% - 9018 90 92 ---- Baby incubators. . . . . . . . . . . . . . u 10% - 9018 90 93 ---- Heart-lung machines. . . . . . . . . . . u 10% - 9018 90 94 ---- Defibrillators . . . . . . . . . . . . . . . . u 10% ....
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....at an illness or to operate. It also provides as follows: "On the other hand, this heading includes specialised measuring instruments used exclusively in professional practice, such as cephalometers, dividers for measuring cerebral lesions, obstetrical pelvimeters, etc. It should also be noted that a number of the instruments used in medicine or surgery (human or veterinary) are, in effect, tools (e.g., hammers, mallets, saws, chisels, gouges, forceps, pliers, spatula, etc.), or articles or cutlery (scissors, knives, shears, etc.). Such articles are classified in this heading only when they are clearly identifiable as being for medical or surgical use by reason of their special shape, the ease with which they are dismantled for sterilization, their better quality manufacture, the nature of the constituent metals or by their get-up (frequently packed in cases or boxes containing a set of instruments for a particular treatment: childbirth, autopsies, gynaecology, eye or ear surgery, veterinary cases for parturition, etc.)." (emphasis supplied) 15. It can, therefore, be said that instruments and apparatus which are 'specifically designed' or 'intended for use' ....
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.... Diagnosis: Medical hardcopy film is, in many situations, the primary medium for the doctor's diagnosis. This remains true even when records are available in digital format. Furthermore, when non-diagnostic monitors are being used, diagnostic hardcopy is required in order to diagnose the image." (emphasis supplied) 19. Regarding printing requirement for diagnostic image, the white paper provides: "Printing requirements for diagnostic images The requirements for printing today are more diverse than ever before, die to the expanded range of modalities for diagnostic imaging. At the same time, an image that enables a correct and accurate diagnosis is key in radiology. Therefore, the most important consideration in selecting a printer for diagnostic printing is the ability to print an image with diagnostic quality that can be used for primary reading by a radiologist or another medical specialist." (emphasis supplied) 20. It would also be useful to refer to the declaration made by Dr. Deepak P. Patkar Director, Medical Services, Head, Department of Radiology, Nanavati Super Speciality Hospital, Mumbai. The relevant portion of the declaration is reproduced....
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....ise Films offer wider dynamic range, which help in differentiating areas with low contrast difference, thus offering superior quality with visibility of small objects. Examination like Mammography requires to be printed on high spatial and contrast resolution imagers, 508 dpi or above with capability of 16 bit grey shades respectively in order to display all fine details. The institute prints medical films for all patients referred for imaging examinations at the radiology department of the institute." (emphasis supplied) 21. It thereafter concludes that: "This is to conclude that Agfa Drystar range of Thermal Printers are capable of printing diagnostic quality medical x ray images on Medical X ray films only, which are used in medical diagnosis which cannot be achieved by simply printing these images on paper or only viewing them on monitor. Hence, we state that Agfa Thermal Printers are Medical Diagnostic Equipment only." (emphasis supplied) 22. Dr. Yashvant Singh, Head of Department of Radiodiagnosis, Dr. Ram Manohar Lohia Hospital and Medical College, New Delhi also gave a similar declaration. 23. It will also be appropriate to refer to....
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....sed for primary reading by a radiologist or another medical specialist. Agfa Drystar 5302 is used with medical equipment like MRI Scanners, CT Scanners, Digital X-Ray, Ultrasound scanners and these thermal printers are capable of producing diagnostic quality images on heat sensitive medical film which cannot be printed on a ordinary desktop printer. It also concludes that these thermal printers play a vital role and function to conclude the process of diagnosis. These thermal printers are different from ordinary printers. 25. It needs to be noted that while CTH 8443 covers printers using thermal print process, but thermal printers specially designed for use in medical science are classifiable under CTH 9018. Parameters like spatial resolution and contrast resolution are necessary to determine whether a printer can print diagnostic quality images. Every thermal printer of CTH 8443 is not used in medical sciences. For instance, thermal printing technology is used for printing labels, tickets and barcodes in industries like retail, shipping, pharmacy, manufacturing and warehousing, automotive, banking and aviation. Thus, thermal printers which are specially designed for use in medi....
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.... consideration was regarding classification of lamps specially designed for operation theatre. The appellant contended the classification would be under CTH 9018, whereas the department contented that it would be under CTH 8539 which covers 'other discharge lamps'. It is in this context that the Tribunal held: "6. We have gone through the records of the case carefully. The technical literature produced highlights the special features of the impugned product. There is minimum shadow formation and optimized depth of illumination. The light radiates from the rim of the light head and potential areas of shadow are brightened. As a result of the above design, the light is homogeneous and arrangement of filters for infra red radiation limits the temperature increase to only 2C. The suspension is designed in such a manner that light heads can be positioned with the touch of the hand and without restriction. The shape of the light head is aerodynamic and its concave underside restricts any turbulence that may occur to the area immediately below the light head. 6.1 Now let us examine the HSN Explanatory Notes. Under the Heading, 90.18, the following note is given: ....