TaxTMI 
TaxTMI 
2026 (9) TMI 1612
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....articles under CTI 39269099, which attract higher duty rates. Accordingly, a Show Cause Notice came to be issued on 18.12.2023, and after following due process, the Adjudicating Authority reclassified the goods under CTI 3926 9099, ordered the recovery of Rs.3,38,70,870 in differential duty alongside applicable interest. He also imposed an equal penalty under Section 114A, and a redemption fine of Rs.1 crore under Section 125 on the goods that were cleared and no longer available for physical confiscation. Aggrieved by the Order the Appellant is before us. 3. The Ld. Advocate Shri Ajay Kumar Gupta appeared for the appellant and the Ld. Authorized Representative Shri Anoop Singh appeared for the respondent. Submissions made by the Appellant 3.1 Shri Ajay Kumar Gupta ld. Advocate for the appellant submitted as under: A. The appellant imports STAGO blood coagulation analysers, their parts and related disposables from Diagnostica Stago S.A.S., France, the original manufacturer and patent holder, and that the present proceedings arose solely from a post-audit objection. B. The goods in dispute are STA micro-cuvettes, being patented, sealed cartridge assemblies....
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....c plastic cartridges of the present kind. The appellant's CDSCO import licences also identify the goods as parts of a medical device. F. It was further contended that Heading 9027 is the specific entry for parts of analytical instruments and must prevail over Heading 3926, a general residuary entry for other articles of plastics. Reliance was placed on Union of India & Ors. v. Garware Nylons Ltd. & Ors. (1996) 10 SCC 413], for the principle that a specific entry prevails over a general one. Accordingly, the goods were claimed to be correctly classifiable under CTI 9027 9090. G. In support, the appellant relied on Sandor Medicaids Vs Principal Commissioner of Customs, Hyderabad [2023 (3) TMI 593], wherein I-STAT blood-gas investigation cartridges, used with the analyser to generate analytical results, were held classifiable under CTH 902790. The decision was cited as recognising that a consumable article functionally integrated with an analytical system may be classified as a part under Heading 9027. Reliance was also placed on Order-in-Appeal No. AAAR/032018 (A.R.) dated 26.09.2018, VXL India Ltd. Vs Collector of Customs [1993 (7) TMI 173], HID India (P) Ltd. Vs P....
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....d. Vs CCE, Guntur [2016 (6) TMI 1056], Anand Nishikawa Co. Ltd. Vs Commissioner of Central Excise, Meerut, [2005 (188) E.L.T. 149 (SC)], and M/s. Samsung India Electronics Pvt. Ltd. Vs Principal Commissioner of Customs [2023 (12) TMI 1155 - CESTAT NEW DELHI] K. For the same reasons, it was submitted that penalty under Section 114A was unsustainable, since its essential ingredients- collusion, wilful misstatement or suppression of facts with the requisite intent-were absent. The appellant's consistent declaration of the supplier's classification and the Department's earlier acceptance of the same demonstrated the absence of any intent to obtain an undue benefit. L. As regards confiscation and redemption fine, learned counsel submitted that the imported goods were no longer available for seizure or confiscation and, therefore, no redemption fine could be imposed. Reliance was placed on Commissioner Vs Finesse Creation Inc., [2010 (255) E.L.T. A120 (SC), affirming 2009 (248) E.L.T. 122 (Bom.)], for the proposition that where the goods are unavailable, the question of redemption does not arise. The learned counsel accordingly prayed that the impugned order be set a....
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....98 (Ker.), for the proposition that an article can qualify as a part only when the main machine is incomplete without it. In Commissioner of Customs, New Delhi Vs C-Net Communication (I) Pvt. Ltd., 2007 AIR SCW 6208 / (2007) 12 SCC 72, the Hon'ble Supreme Court referred to the criteria whether the article is essential to the operation of the principal product, is a necessary and integral component, is installed in the principal product, and is recognised as a part in common trade usage. E. As regards an "accessory", reliance was placed on Supreme Motors Vs State of Karnataka [1987 (27) E.L.T. 409 (Kar.)], and Annapurna Carbon Industries Co. Vs State of Andhra Pradesh, [(1976) 2 SCC 273], wherein an accessory was described as an article supplementary or secondary to something of greater or primary importance, which adds to its convenience or effectiveness or assists in its operation. Applying these tests, the learned Authorised Representative submitted that the cuvettes are neither parts nor accessories. The coagulation analyser remains a complete machine without a cuvette installed in it, and the cuvette is not an element of any assembly or sub-assembly of the analyser but....
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....t's reliance on Sandor Medicaids (supra), was distinguished on the ground that the goods and factual circumstances considered therein were dissimilar and therefore did not govern the present dispute. K. On limitation and penalty, the learned Authorised Representative submitted that Sections 46(4) and 46(4A) of the Customs Act, 1962 require an importer, under the self-assessment regime, to ensure the truthfulness, correctness and accuracy of the declared description, classification, rate of duty, value and claim to exemption. In the present case, while the supplier's invoice merely described the goods as cuvettes, the importer added the words "spare parts for coagulation analyser" in the Bills of Entry. This as a deliberate misstatement intended to disguise the true nature of the goods and obtain a lower rate of duty, thereby attracting Section 28(4). L. Reliance was placed on Uniworth Textiles Ltd. Vs Commissioner of Central Excise, Raipur; Interglobe Aviation Ltd. Vs Principal Commissioner of Customs, Bangalore [2022 (379) E.L.T. 235], and Eastern Silk Industries Ltd. Vs Commissioner of Customs (Airport/Admn.), Kolkata. It was submitted that the authorities cited....
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....enue, the assessees or the appellate authorities - except for the assessee who sought the Ruling and its jurisdictional authority. This according to us, would be applicable with greater force to foreign Rulings, where the law is not even shown to be pari materia to the applicable domestic law. We hence do not propose to examine the same. Question for Consideration 5. The dispute in the present appeal relates to the classification of STA micro-cuvettes imported by the appellant for use in STAGO blood coagulation analysers. The appellant had classified the goods under CTI 9027 9090, whereas the Department has classified them under CTI 3926 9099, treating them as articles of plastics/laboratory consumables. The principal issue for determination is, therefore, whether the imported micro-cuvettes are merely articles of plastics/laboratory consumables classifiable under Heading 3926, as held by the Department, or whether they constitute identifiable parts/accessories of the STAGO coagulation analyser and are consequently classifiable under Heading 9027 by virtue of Note 2(b) to Chapter 90. Discussion and Analysis 6. The undisputed description of the impugned goods is that the....
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....ar kind of machine, instrument or apparatus, are to be classified with the machines, instruments or apparatus of that kind. The requirement is thus not that the article should be permanently fitted into the principal machine. The relevant consideration, in this case, is whether the article qualifies as a part or accessory and is suitable for use solely or principally with the particular instrument, satisfying Note 2(b) to Chapter 90. 6.4 In the present case, the subject micro-cuvettes satisfy the test of specific suitability in a particularly clear manner. They are designed exclusively for the STAGO coagulation analyser and are necessary for carrying out the intended coagulation test. The fact that the analyser remains physically intact when the cuvette is removed does not by itself establish that the cuvette is merely a generic consumable. A distinction has to be maintained between an article which is consumed in a process independently of the identity of the machine and an article which is specifically designed to interact with and perform an essential function in a particular analytical instrument, even if it be a single use article. 7. The Hon'ble Supreme Court in CCE....
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....or loses its identity in operation or manufacture. [See: M/s. Meridien Industries Ltd. Vs. Commissioner of Central Excise [2015 (325) E.L.T. 417 (S.C.)]. Accordingly, 'single use', 'short durability', or 'discard after use' does not, by itself, render an article a consumable or exclude it from being a part, accessory, apparatus, or functional component of a machine. Conversely, where the article is merely supplied as a consumable material and is used up in the operation without constituting a functional component of the machine, it may as per relevant facts be classified as a consumable and not a part. Classification must be determined under GRI 1, the terms of the relevant headings, and the applicable Section and Chapter Notes, having regard to the article's objective characteristics, function, and sole or principal suitability for use with the machine. Commercial descriptions such as "disposable" or "consumable" are not determinative. There is no general HSN principle that an article ceases to be a part merely because it is disposable or has a short useful life. 8.1 This distinction was recognised in Indian Telephone Industries Ltd. Vs Collector of Customs [1983 (13) ELT 1012 ....
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....imported cartridge itself incorporates a steel ball whose movement is controlled magnetically by the analyser. 10. We also take note of the decision in Sandor Medicaids (supra), cited by the Appellant. The Tribunal considered I-STAT blood-gas investigation cartridges used with an analyser and held that the goods were appropriately classifiable under Heading 9027, observing that the system and cartridges together performed chemical analysis and that Heading 9027 was more specific than the competing medical-instrument heading. Hence the principle emerging therefrom-that the classification of an analytical cartridge has to be considered with reference to its functional integration with the analytical system-is relevant. 11. The Revenue's reliance upon Laxbro Manufacturing Co. (supra), does not persuade us to take a contrary view. The goods considered therein and the factual and functional characteristics recorded in that case are materially different. Classification decisions are necessarily dependent upon the nature, design, use and tariff context of the goods before the Court or Tribunal. The said decision cannot be applied merely because both cases concern laboratory arti....