TMI Blog2020 (9) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... beam of light onto the object. Thus, the micromanipulator would be rightly classified under the head Compound Optical Microscope falling under Sub-heading 9011. The said product would be rightly classifiable as Surgical microscope (Tariff item No.90118000) under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) covered under the Sub-heading Compound optical microscopes, including those for photomicrography, cinephotomicrography or microprojection. Whether the product micromanipulator finds mention under sub-heading 9018 for which we would be required to go through the sub-heading 9018 as appearing in the First Schedule to the Customs Tariff Act, 1975? - HELD THAT:- We have gone through the above explanatory notes to the Harmonized Commodity Description and Coding System with respect to Sub-heading 9018 (which covers all the products falling under the sub-heading No.9018). We have also gone through the entire list of all the instruments/apparatus/appliances listed therein covered under the Sub-heading No.9018. The product micromanipulator does not find mention in the said list. Now, since micromanipulator does not appear in the list of instruments/appa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icro-manipulator system ( MM system in short) is also known as IVF technology in the medical world and in common/trade parlance, it is also called Micro manipulator ; that globally micro-manipulator falls under the HSN 9018 but in India there is confusion as to whether it falls under HSN 9018 or 9011; that they are of the view that the product in question should be classified under CH-9018 and not under CH-9011. The applicant submits that a micromanipulator is a device which is used to physically interact with a sample under a microscope, where a level of precision of movement is necessary which cannot be achieved by the unaided human hand and may typically consist of an input joystick (a mechanism for reducing the range of movement) and an output section with the means of holding a microtool to hold, inject, cut or otherwise manipulate the object as required; that mechanism for reducing the movement usually requires the movement to be free of backlash which is achieved by the use of kinematic constraints to allow each part of the Mechanism to move only in one or more chosen degrees of freedom, which achieves a high precision and repeatability of movement, usually at the expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int of the micropipette. The sperm is then released into the oocyte. The pierced oocyte has an excluded polar body at about 12 o clock indicating its maturity. The polar body is positioned at the 12 o clock or 6 o clock position to ensure that the inserted micropipette does not disrupt the spindle inside the egg. After the procedure, the oocyte will be placed into cell culture and checked on the following days for signs of fertilization. Thus, it can be seen that a complex process of in-vitro fertilization (IVF) is carried out by the Micromanipulator through the most recognized procedure called ICSI. 5. The applicant has briefly described the guiding principles determining the classification of a product under GST law as: (a) Classification under the Customs Tariff Act, 1975 along with relevant chapter notes pertaining to relevant chapter.(b) General Rules for interpretation of First Schedule to the Customs Tariff Act and (c) HSN explanatory notes released by the World Customs Organization. He has also stated that the aforementioned principles have been laid down on the basis of explanation (iii) and (iv) of Notification No.1/2017-Central Tax (Rate) dated 28.06.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the classification of MM System under heading 9018 of the Customs Tariff Act stating that their product is classifiable under Sub-heading 9018 and defined as instruments and appliances used in medical sciences and has defined Instrument, apparatus and appliance as per medilexicon.com as under: (i) Instrument:a tool or implement. (ii) Apparatus: A collection of instruments adapted for a special purpose. (iii) Appliance: A device used to improve function of a part, or for therapeutic purposes. The applicant has defined the above terms as per dictionary definitions as under: (i) Instrument: Instrument is an implement or apparatus especially used for delicate or scientific works and denotes surgical instruments, optical instruments, musical instruments, measuring devices and the like. (ii) Apparatus: apparatus denotes a set of instruments used for purposes like scientific experiments, e.g. laboratory apparatus. The applicant has also defined the above terms as per Advance lexicon also. He has concluded that the above mentioned definitions gives an impression that an apparatus is a wider term than instrument and appliance and it consists of both. MM System has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not achieve its primary intended action in or on the human body by pharmacological, immunological or metabolic means, but may be assisted in its function by such means. Products which may be considered to be medical devices in some jurisdictions but not in others include disinfection substances, aids for persons with disabilities and devices incorporating animal and/or human tissues. Devices for in-vitro fertilization or assisted reproduction technologies. The applicant has further stated that since the MM system is being certified under ISO 13485 and the study device has been made as a part or curriculum of Doctor of Medicine course and the definition given by WHO also considers it, it is clarified beyond doubt that MM system is a medical device and hence classifiable under CH-9018 and that therefore it is an instrument for medical science which includes apparatus. The applicant has further mentioned that the impugned item is classifiable under CTH 9018 in terms of Chapter Notes to chapter 90 which reads as under: 3.1 Chapter Note 3 of this chapter mentioned that the provisions of Notes 3 and 4 to Section XVI apply also to this Chapter which is as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the ICSI procedure which is carried out by micromanipulator and thus the microscope merely magnifies the objects so as to carry out the main procedure in a proper manner; that thus even by application of Section Note 4 to Section XVI, the impugned goods merit classification under SH 9018 and not under SH 9011. 10. The applicant has submitted that even in terms of use of equipment, the goods are classifiable under SH 9018; that Nikon inverted Microscope Eclipse TI-U with micromanipulator are used only in hospitals in IVF labs/test tube baby centres as a medical device for ICSI procedure to overcome fertility problems; that the said ICSI procedure is done under a microscope using the multiple manipulation devices such as Micromanipulator, micro-injector, micropipettes; that the use of the microscope is merely incidental and the main function remains invitro fertilization which is a well-documented fact; that inverted microscope is just one of the components of the apparatus as the entire process has to be done on minute particles and the said microscope is used merely as a visual aid and does not interfere with the main procedure which is Intra Cytoplasmic Sperm injection (ICS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2015(319) ELT.333(Tri.-Ahmd)-2014(11)TMI114-CESTAT, Ahmedabad, it was held that a specific entry in the CETA, 1985 has to be the proper classification than a general entry in Chapter 39 of the CETA, 1985 as per the rules of interpretation to the CETA, 1985. (c) As per the judgement In the case of The Commissioner of Central Excise, Aurangabad v/s IVP ltd. reported in 2004 (173) ELT.128(Tri.-LB)-2004(9) TMI 135-CESTAT, New Delhi, a specific heading takes precedence over the general one; that heading 6901 is a specific heading for nozzles whereas its classification under heading 8515 is as general as parts of welding machines; that Rule 3 of the Interpretative Rules also provides that heading which provides the most specific description shall be preferred to headings providing a mere general description; that applying rules of interpretation and specific mentioning of nozzles in Chapter 69, it was held that nozzles are classifiable under SH 6901. 12. The applicant has further submitted that in light of the above judicial precedents, it is clear that in case a specific entry exists, goods must be classified in that entry even though there is a general entry as well; that sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pparatus/device is equipped with an optical device i.e. inverted microscope in this case, cannot be a reason to take the said device out of this classification but would continue to be classified under CH- 9018. 13. The applicant has further submitted that the other heading that has been disputed for classification is 9011 of the Customs Tariff Act which covers compound optical microscopes, including those for photomicrography, cinephotomicrography or microprojection ; that the impugned item is not a microscope but a complete system designed to carry out micromanipulation function; that the Chapter notes and General Rules for interpretation also bears the classification of the said item under SH 9018. The applicant has drawn attention to the explanatory notes of SH 9011 which mentions that this heading covers microscopes used by amateurs, teachers, etc. and those for industrial use or for research laboratories, they remain classified in the heading whether or not they are presented with their optical elements (objectives, eyepieces, mirrors, etc.). This heading also includes universal microscopes, polarizing microscopes, metallurgical microscopes, stereoscopic microscopes, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0118000 of the First Schedule to Customs Tariff Act, 1975 in the residual sub-heading within the heading compound optical microscopes, including those for photo microgravity, cinephotomicrography or micro projection. CESTAT, Mumbai after hearing both the sides ruled in favour of the applicant and reads as under: 12. It is not the case of the customs authorities that the goods, as presented, is only a microscope. Neither is it their case that the microscope can, on its own, perform the tasks necessary for in vitrofertilisation. We have rendered the finding supra that the micromanipulator is an essential implement for in vitro fertilisation for which the imported goods are to be utilised. The heading proposed by customs authorities is that of parts and accessories under microscope . In the context of the functions performed by micromanipulator , it can, by no stretch, be considered to be an accessory of microscope . No distinction has been carved out between the two articles in the impugned order. In the absence of such distinction, the attempt to classify the goods, as presented, under heading no 90118000 of the First Schedule to Customs Tariff Act, 1975 suffers from i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is also called Micro manipulator ; that globally micro-manipulator falls under the HSN 9018 but in India there is confusion as to whether it falls under HSN 9018 or 9011 and submitted that they are of the view that the product in question should be classified under CH-9018 and not under CH-9011. The applicant has put up the following question for determination before AAR: Whether Micro-manipulator system which is Intracytoplasmic Sperm Injection (ICSI) with ejaculated, epidymal or testicular spermatozoa used in Assisted Reproductive Technology Procedures is classifiable under tariff heading 9018 or 9011, that is, what is the rate of tax on Micro-manipulator System ? 19. In order to determine the classification of Micro-manipulator system , we will be required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 containing the sub-headings as well as the rates of Central Tax GST applicable to various goods, which are covered under schedules therein, as under: (i) 2.5 per cent. in respect of goods specified in Schedule I, (ii) 6 per cent. in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule to the Customs Tariff Act . (b) In the case of Flora Agrotech v/s the Commissioner of Central Excise, Vapi reported in 2015(319) ELT.333(Tri.-Ahmd)-2014(11)TMI114-CESTAT, Ahmedabad, it was held that a specific entry in the CETA, 1985 has to be the proper classification than a general entry in Chapter 39 of the CETA, 1985 as per the rules of interpretation to the CETA, 1985. (c) As per the judgement In the case of The Commissioner of Central Excise, Aurangabad v/s IVP ltd. reported in 2004 (173) ELT.128(Tri.-LB)-2004(9) TMI 135-CESTAT, New Delhi, a specific heading takes precedence over the general one. The applicant have further stated in their submission that although globally micro-manipulator falls under the HSN 9018 but in India there is confusion as to whether it falls under HSN 9018 or 9011. 20.1 In view of the above, it appears that the applicant considers that the sub-heading 9018 provides a more specific description for their product micromanipulator . Therefore, in order to confirm as to whether the said product is actually covered under the said sub-heading 9018 or 9011, a reference is required to be made to the explanatory notes to the Harmonized Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed image. The optical system usually also incorporates provision for illuminating the object from below (by means of a mirror illuminated by an external or an integral light source), and a set of condenser lenses which direct the beam of light from the mirror on to the object. (II) A specimen stage, one or two eyepiece-holder tubes (according to whether the microscope is the monocular or binocular type), and an objective holder (generally revolving). The whole is fixed to a stand to which a limb or bracket and various adjusting accessories may be attached. This heading covers microscopes as used by amateurs, teachers etc. and those for industrial use or for research laboratories, they remain in the heading whether or not they are presented with their optical elements (objectives, eyepieces, mirrors etc.). The heading includes universal microscopes; polarising microscopes; metallurgical microscopes; stereoscopic microscopes; phase contrast and interference microscopes; reflecting microscopes; microscopes with drawing attachments; special microscopes for examining clock or watch jewels; microscopes with heating or freezing stages. 21.2 Special purpose micros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ped with special microscopes enabling rapid change of focus, and are used in education, scientific and medical demonstration rooms, technical laboratories etc. 21.3 We have gone through the above explanatory notes to the Harmonized Commodity Description and Coding System with respect to Sub-heading 9011 (which covers all the products falling under the sub-heading No.9011). We have also gone through the details/functions of the various microscopes enlisted in the above explanatory notes. The definition of a micromanipulator itself speaks about it being a device, which is used to physically interact with a sample under a microscope, where a level of precision of movement is necessary that cannot be achieved by the unaided human hand. This means that in the absence of a microscope, a micromanipulator cannot function i.e. a micromanipulator is dependent on the microscope to do the function that it is created for i.e. micromanipulation. From the above, it can be seen that microscope is the primary and essential constituent of micromanipulator. Further, looking at the procedure of IVF described by the applicant in his submission at para-4 above, it appears that the entire procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as the criterion is applicable. 21.5. From the submission given by the applicant, the only ground which the applicant has given for micromanipulator being classified in Sub-heading 9018 is that it is a instrument/appliance or apparatus used in the medical sciences, however, not much details vis-a-vis classification have been provided. Thus, the said classification has been entirely based on a general entry instruments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-CESTAT, New Delhi, a specific heading takes precedence over the general one. 22. Now, the only thing that needs to be ascertained under the above circumstances is as to under which microscope, a micromanipulator would be covered? In the instant case, as submitted by the applicant, the micromanipulators are used to carry out the procedure of invitro fertilization (IVF) under a microscope. From a plain reading of the procedure of IVF described by the applicant in his submission (please refer para-4), it appears that the entire procedure needs precision and perfection for which a microscope with extremely powerful objective lenses and high magnification would be required. As per the explanatory notes mentioned above, the Compound Optical Microscope consists of an objective designed to produce a magnified image, an eyepiece which further magnifies the observed image, has a provision to illuminate the object from below (by means of a mirror illuminated by a light source) and a set of condenser lenses which directed the beam of light onto the object. Thus, the micromanipulator would be rightly classified under the head Compound Optical Microscope falling under Sub-heading 9011. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 9018 32 30 --- Hilerio venus fistula needles 9018 32 90 --- Other 9018 39 -- Other : 9018 39 10 --- Catheters (for urine, stool) 9018 39 20 --- Cardiac catheters 9018 39 30 --- Cannulae 9018 39 90 --- Other - Other instruments and appliances, used in dental sciences : 9018 41 00 -- Dental drill engines, whether or not combined u 7.5% -on a single base with other dental equipment 9018 49 00 Other 9018 50 - Other ophthalmic instruments and appliances : 9018 50 10 --- Ophthalmoscopes. 9018 50 20 --- Tonometers 9018 50 30 --- Ophthalmic lasers 9018 50 90 --- Other 9018 90 - Other instruments and appliances : -- Diagnostic instruments and apparatus : 9018 90 11 ---- Instrument and apparatus for measuring blood pressure 9018 90 12 ---- Stethoscopes 9018 90 19 ---- Other ---- Surgical tools : 9018 90 21 ---- Bone saws, drills and trephines 9018 90 22 ---- Knives, scissors and blades 9018 90 23 ---- Forceps, forcep clamps, clips, needle holders, -introducers, cephalotribe bone holding and other holding instruments 9018 90 24 ---- Chisel, gauges, elevators, raspatones osteotome, craniotome, bone cutters 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al (including precious metals). The heading does not cover: (a) Sterile catgut and other sterile material for surgical sutures, sterile laminaria and sterile laminaria tents.(heading 30.06). (b) Diagnostic or laboratory regents of heading 38.22. (c) Hygienic or pharmaceutical articles of heading 40.14. (d) Laboratory, pharmaceutical or hygienic glassware of heading 70.17. (e) Sanitary ware of base metal ( in particular, headings 73.24, 74.18 and 76.15). (f) Manicure or pedicure sets and instruments (heading 82.14). (g) Carriages for disabled persons (heading 87.13). (h) Spectacles, goggles and the like, corrective, protective or other ( heading 90.04). (i) Photographic cameras (Heading 90.06)unless incorporated permanently in the instruments or appliances of this heading. (j) Microscopes etc. of heading 90.11 or 90.12. (k) Disc calculators used for calculating lung function, body mass index, etc. of heading 90.17. (l) Mechano-therapy, oxygen therapy, ozone therapy, artificial respiration, aerosol therapy, message apparatus etc. of heading 90.19. (m) Orthopaedic appliances, artificial parts of the body and fractur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds (prostratic, bladder, urethral etc.). (vi) Specula (nasal, mouth, laryngeal, rectal, vaginal etc. ) (vii) Mirrors and reflectors ( for examining eye, larynx, ear etc.). (viii) Scissors, shears, pliers, forceps, chisels, gouges, mallets, hammers, saws, scrapers, spatula. (ix) Cannulae, catherers, suction tubes etc. (x) Cauteries (thermo, micro, galvano etc.). (xi) Tweezers, dressing, swab, sponge or needle holders (including radium needle holders). (xii) Rectractors (lip, jaw, abdominal, tonsil, liver etc.). (xiii) Dilators (laryngeal, urethral, oesophageal, uterine etc.). (xiv) Wire guides used for the placement for catheters, needles, tissue dilators, endoscopes, and atherectomy devices. (xv) Clips, (suture etc). (xvi) Syringes ( glass, metal, glass and metal, plastics etc.) of all kinds e.g. injection puncture, anaesthesia, irrigation, wound washing, .suction (with or without pump), eye, throat, uterine, gynaecological etc. (xvii) Surgical staplers for inserting staples to close a wound. (B) Special Diagnostic instruments and apparatus: These include: (i) Stethoscopes. (ii) Instruments to measur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the foetus); cephalotribes and cranioclasts(instruments to crush the head of a child which has died in the uterus); instruments for taking internal measurements etc. (K) Portable pneumo thorax apparatus, blood transfusion apparatus, artificial leeches . The heading also covers sterile hermetically sealed containers of plastics, from which air has been evacuated but containing a small quantity of anti- coagulant and fitted with an integral donor tube and a phlebotomy needle, used for the collection, storage and transfusion of whole human blood. However, special blood storage bottles of glass are excluded (heading 70.10). (L) Chiropodists electric grinders. (M) Acupressure needles: gold, silver, steel. (N) Endoscopes: gastroscopes, thoracocopes, peritoneoscopes, bronchoscopic telescopes, cystoscopes, urethoscopes, resectoscopes, cardioscopes, colonoscopes, nephroscopes, laryngoscopes,etc. Many of these have an operating channel large enough to perform surgery via remote controlled instruments. However, endoscopes for non-medical purposes (fibroscopes) are excluded (heading 90.13). (O) Apparatus incorporating an automatic data processing machine an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tests based on frequency variations). (x ) Diagnostic apparatus incorporating or operating in conjunction with an automatic data processing machine for processing and visualising clinical data etc.). (xi) Ultrasonic diagnostic equipment used for representation of organs, e.g. on a display tube, by means of ultrasonic waves. (xii) Nuclear Magnetic Resonance (NMR) apparatus used to represent the characteristics of tissues and organs inside the human body, using the magnetic properties of body atoms, such as hydrogen atoms. (2) Electrotherapy apparatus: Apart from it s use in diagnosis, this apparatus is employed to treat diseases such as neuritis, neuralgia, hemiplegia, phlebitis, endocrinal anaemea. Certain of these appliances can be combined with electro-surgical instruments referred to paragraph (7) below. (3) Iono therapy apparatus used to administer active medicaments (sodium or lithium salicylate, potassium iodide, histamine etc.) through the skin by the aid of an electric current. (4) Diathermy apparatus to treat certain diseases which require heat (e.g. rheumatism, neuralgia, dental ailments). These operate by the use of high frequenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us it cannot be inferred on the basis of a general entry in the Sub-heading Instruments and appliances used in medical science that a product which the applicant construes as an instrument/ appliance used in the field of medical science should find a specific entry within that sub-heading. In view of the above, we can safely conclude that the product micromanipulator is rightly classified under the Sub-heading 9011 - Compound optical microscopes, including those for photomicrography, cinephotomicrography or microprojection. 23.4 Further, on going through the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017, it is found that the said entry of compound optical microscopes (SH-9011) appears at entry No.184 of Schedule-IV of the said notification. The entry appears, as under: S.No. Chapter / Heading/ Subheading/ Tariff item Description of Goods 184 9011 Compound optical microscopes, including those for photomicrography, cinephotomicrography or microprojection. However, the said notification has been amended vide Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
