Customs, Excise and Gold Tribunal - Delhi
Prosoya Industries Ltd. vs Collector Of Customs on 10 February, 1995
Equivalent citations: 1995 (78) ELT 344 Tri Del

ORDER Lajja Ram, Member (T)

1. In these two appeals filed by M/s. Prosoya Industries Ltd. (formerly known as Kalani Industries Pvt. Ltd.), Indore, the issue involved is the classification of the goods described as "Bio Health Heater". The importers had sought the classification under Tariff subheading No. 9021.19 of the Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as the Tariff), as Orthopaedic appliance. On the basis of the adjudication order passed by the Collector of Customs, New Delhi, Customs duty has been demanded under sub-heading No. 3926.90, as article of plastics, by the Appraiser (Customs). The appeal against the order of the Appraiser (Customs) demanding customs duty under sub-heading No. 3926.90 of the Tariff has been rejected by the Collector of Customs (Appeals), New Delhi. The Revenue has filed cross objections with regard to the appeal filed by the appellants. As both the appeals emerge from the same bill of entry, they were taken together for hearing and are being disposed of by this common order.

2. The matter was posted for hearing on 30-9-1994. When Shri R. San-thanam, Advocate appeared for the appellants. Shri B.K. Singh, SDR represented the respondent.

3. Shri R. Santhanam, the learned advocate submitted that as the matter related to the classification of the goods imported, the present Bench has jurisdiction to hear the case. In this connection, he relied upon the Supreme Court's decision in the case of Navin Chemicals Mfg. & Trading Co. Ltd. v. C.C., 1993 (68) E.L.T. 3 (SC). The case has a direct and proximate relationship to the rate of customs duty. In this connection, reference was also made to the Tribunal decision in the case of Anil Starch Products Ltd. Ahmedabad v. CCE Ahmedabad 1985 (21) E.L.T. 306 (Tribunal). It was explained that the Bio Health Heater provided warmth, to the body, and was correctly classifiable under sub-heading No. 9021.19 as an orthopaedic appliance. The goods under consideration could not be termed as an article of plastics, as has been mentioned in the demand order of the Appraiser. The learned advocate referred to the catalogue and other literature with regard to the product, and claimed alternative classification under sub-heading No. 9018.20 or 9018.90. He submitted that the goods under consideration could not be considered as consumer goods.

4. Shri B.K. Singh, the learned SDR replied that the principal function of the goods under consideration was neither orthopaedic nor medical. They were consumer goods and had been correctly classified under sub-heading No. 3926.90 of the Tariff. The Bio-Health Heater was not related to the bone but to the muscle. The goods were imported with the belts which were not mentioned anywhere. Relying upon the cross objections filed by the Revenue, the learned SDR pleaded that the goods were required to be classified on the basis of their primary function, and in this connection, relied upon the Tribunal decision in the case of Shri Dinesh Mills, Ltd. v. CC, Bombay, 1994 (1) R.L.T. 372.

5. We have considered the matter. In the bill of entry the goods were described as orthopaedic bio heaters, and the classification was shown under sub-heading No. 9021.19 as orthopaedic appliance. The Collector of Customs, New Delhi, noting that the goods were in the form of flexible plastic container held them as consumer goods. He had confiscated the goods valued at Rs. 15,77,916/- C.I.F. under Section 111(d) of the Customs Act, 1962 (hereinafter referred to as the 'Act') but gave the importers an option to redeem the same on payment of a fine of Rs. 5 lacs. A penalty of Rs. 1,50,000/- was also imposed under Section 112(a) of the Act. In pursuance of the order of the Collector of Customs, New Delhi, Customs duty was demanded under sub-heading No. 3926.90 as an article of plastics. While arguing on their stay application, as also during the course of hearing before us, the appellants have sought an alternative classification under sub-heading No. 9018.90 as medical equipment. Alternative classification under sub-heading No. 9018.20 was also mentioned.

6. The goods under consideration have been described as "Bio-Health Heater"/ said to be a combination of a "modern science" and "traditional folk remedy" enabling users to reduce and eliminate various pains at various parts of the body by using the 'salt fomentation' theory. It is in the form of a flexible plastic pad. Within the pad there is one round metal disc. There is sodium acetate (food grade), water nontoxic, with bio ceramic stones filled inside the pad, which when activated radiate infra red rays. They come in different shapes, sizes, combinations and colours. When the disc is flexed, crystalisation starts and the pad becomes hot upto 59°C. It is said to provide modern convenient functioning as a hot water bottle, generally used in the households. It is said that cold fomentation could also be enjoyed with the pack. It can be used as such or after keeping the same inside the belt provided for the purpose. They are usable again and again, after recharging in the manner described in the literature on the subject. It has multiple uses as under :-

(1) Relief from Muscular pains during/after exercise or other sports activities.

(2) Keeps muscles warm after exercise or other sports activities.

(3) Relief from back-ache and other body aches.

(4) Keeps the bed and body warm when used as a bed heater.

(5) Helps in physical therapy.

(6) Convenient as a travelling companion.

(7) For the adventurous, can be taken along when going on Camping, Fishing, Mountaineering and other winter leisures & sports.

(8) Can be used as Cold Pack as well when refrigerated -

(a) Relief from fever

(b) Relief from burns

(c) Relief from muscular and body swelling pains.

Among its miscellaneous uses are such uses as for beauty treatment, getting rid of body odour etc.

7. It appears from the above description that the Bio Health Heater is a multi-purpose product and has diverse uses; some of them have no relationship to the medical science. At the same time it is also observed that its application, taking the term medical in its general sense, is mainly in the field with which the medical science is concerned.

8. Let us first take up the Heading No. 39.26, which is extracted below :-

  "39.26                   Other articles of plastics and articles of other
                         materials of Headings Nos. 39.01 to 39.14
  (1)        (2)              (3)           (4)     (5)      (6)

           3926.10  - Office or school      65%              39.26
                      supplies                               39.26

           3926.20  - Articles of ap-       65%               
                      parel and cloth-
                      ing accessories

           3926.30  - Fittings for fur-      65%              39.26
                      niture, coach-
                      work or the like

           3926.40  - Statuettes and         65%              39.26
                      other ornamental 

           3926.90  - Other                  65%              39.26"


From the reading of the Heading No. 39.26, as extracted above, it appears that the general purpose plastic articles are covered by the above Heading. The description of the goods as given above, indicates that they are not general purpose merchandise ware. They are not containers as held by the Revenue, and they could not be considered as an article of plastics. The flexible pads contain sodium acetate and water nontoxic, with round metal bio disc inside. As per Chapter Note 1 under Chapter 39 the expression 'plastics' means those materials of Heading Nos. 39.01 to 39.14 which are or have been capable either at the moment of polymerisation or at some subsequent stage of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by melting, moulding, casting, extruding, rolling or other process, into shapes which are retained on the removal of the external influence. As per Note 2, Clause (q) it is provided that articles of Chapter 90 which cover among others medical or surgical instruments and apparatus are excluded from the Chapter 39. In the case of Indo-International Industries v. Commissioner of Sales Tax, UP -1981 (8) E.L.T. 325 (SC) in para 5 of the Hon'ble Supreme Court have observed as under : -

"5. Having regard to the aforesaid well-settled test the question is whether clinical syringes could be regarded as "glassware" falling within Entry 39 of the First Schedule to the Act? It is true that the dictionary meaning of the expression "glassware" is "articles made of glass" (See " Websters New World Dictionary). However, in commercial sense glassware would never comprise articles like clinical syringes, thermometers, lactometers, and the like which have specialised significance and utility. In popular or commercial parlance a general merchant dealing in "glassware" does not ordinarily deal in articles like clinical syringes, thermometers, lactometers, etc. which articles though made of glass, are normally available in medical stores or with the manufacturers thereof like the assessee. It is equally unlikely that consumer would ask for such articles from a glassware shop. In popular sense when one talks of glassware such specialised articles like clinical syringes, thermometers, lactometers and the like do not come up to one's mind. Applying the aforesaid test, therefore, we are clearly of the view that the clinical syringes which the assessee manufactures and sells cannot be considered as "glassware" falling within Entry 39 of the First Schedule of the Act."

Keeping in view the nature of the product, its uses and the construction their classification under sub-heading No. 3926.90 is ruled out.

9. In so far as the classification under any of the sub-heading Nos. 9018.20, 9018.90 or 9021.19 is concerned, all these fall under Section XVIII and Chapter 90 of the Tariff. Section XVIII and Chapter 90 of the Tariff cover, among others, medical or surgical instruments and apparatus. The instruments and appliances used in medical, surgical, dental or veterinary sciences are covered by Heading No. 90.18, while orthopaedic appliances are covered by Heading No. 90.21. The appellants have sought classification under sub-heading No. 9021.19, and as an alternative they have sought classification either under sub-heading No. 9018.20 or 9018.90. Heading No. 90.21 is extracted below :


(1)     (2)             (3)                       (4)     (5)        (6)

90.21            Orthopaedic applian-
                 ces, including crut-
                 ches, surgical belts 
                 and trusses, splints 
                 and other fracture 
                 appliances; artificial 
                 parts of the body; hearing 
                 aids and other appliances 
                 which are worn or carried, 
                 or implanted in the body, 
                 to compensate for a defect 
                 or disability.

              -- Artificial joints and 
                 other ortho- paedic or 
                 fracture appliances.

      9021.11 -- Artificial joints                40%     ..         90.21

      9021.19 -- Other                            40%     ..         90.21

              -- Artificial teeth and 
                 dental fittings :

      9021.21 -- Artificial teeth                 40%     ..         90.21

      9021.29 -- Other                            40%     ..         90.21

      9021.30 -- Other artificial parts of        40%     ..         90.21
                 the body

      9021.40 -- Hearing aids, exclud-            40%     ..         90.21
                 ing parts and accessories

      9021.50 -- Pacemakers for                   40%     ..         90.21
                 stimulating heart 
                 muscles, excluding 
                 parts and accessories

      9021.90 -- Other                            40%     ..         90.21"


It is seen from the description under Heading 90.21 that the goods in question does not fit in with the description therein. The Orthopaedics is the Branch of Surgery that deals with the deformities and diseases of bones and joints.

Orthopaedic is of or having to do with orthopaedics. The goods in question are not in the nature of orthopaedic appliances as mentioned in the Heading 90.21.

10. Now coming to the Heading No. 90.1-8 which includes, among others, medical instruments and appliances, it is seen that the goods under consideration have medical application. 'Medical' is a wide term and covers anything of or having to do with healing or with the science and practice of medicine. Medicine is the science of treating, preventing or curing diseases, study or practice of maintaining and improving health. In the statement of facts the appellants had stated that "the imported goods are clearly in the nature of medical equipment used for medical treatment of patients". While arguing on their stay application the counsel for the appellants had sought alternative classification under sub-heading No. 9018.90. Before us the claim has been made for alternative classification under sub-heading No. 9018.20 or 9018.90. In their written submissions dated 7-10-1994, in paras 8 & 9, the appellants have stated as under :-

"8. It is also submitted that the CEGAT in Collector of C. Ex. v. Modern Roofings Ltd., 1990 (45) E.L.T. 174 in para 13.34 has laid down that the functional character of the articles must be taken into account and should be the proper basis for the purpose of classification of goods in the absence of any statutory definition strictly fitting in for the purpose of covering the respective commodity. In this case, it was further made clear that the normal place where the goods are purchased from would indicate the functional as well as commercial nature of the goods. For instance, the goods in the present case would be bought and sold in medical shops and by chemists and, therefore, the imported goods cannot be regarded as articles of plastics in the general sense, especially because their functions and use are primarily for medical treatment although incidentally or casually even non-patients may also use the imported goods for getting warmth such as in winter or in cold climate. This functional nature of the goods applied for classification under excise law in the above judgment has been followed and reported by the CEGAT in the matter of customs classification as well in Trijama Filtemll Pvt. Ltd. v. Collector of Customs, 1992 (62) E.L.T. 566. The appellant also relies on the decisions in United Footware v. Joint Secretary, GOI, 1989 (42) E.L.T. 193 and Precious Industries v. Collector of Customs, 1989 (44) E.L.T. 47 wherein it has been held that the predominent use of the goods should be determinative as the basis for making appropriate classification for the purpose of determination of the rate of duty applicable. As explained earlier, pre-determination function of the bio health heater is primarily for medical treatment and it may have secondary additional use.


9. In the appellant's own case, Bio Health Heaters had been imported earlier through Bombay Customs and the customs authorities have allowed clearance thereof under heading 9018 as may be seen from the earlier Bill of Entry dated 21st June, 1993 cleared on 30th July, 1993 finding a place at page 40 (Annexure 6) of the appeal papers in Appeal No. 124/94-B2 and at page 41 of the appeal papers in Appeal No. 602/94-B2. Even subsequent to the import of the impugned goods, the appellant has been allowed clearance by the Bombay Customs of the same goods under heading 9018 as may be seen from the Bill of Entry dated 30th March 1994 enclosed as Annexure 9 at page 42 of the Customs Appeal No. 602/94-B2. It is, therefore, submitted that while the Bombay Customs have accepted the assessee's classification as medical equipments, the Delhi customs have rejected the same and therefore, it is pleaded that the difference of opinion between the different Collectors cannot and should not be the basis for the assessee to be either penalised or subject to fine and it is also prayed that the imported goods should be appropriately classified as medical equipments/instruments/apparatus/appliances as they are used for medical treatment only. The appellant draws support for the claim both for classification and for cancellation of penalty, order of confiscation and redemption fine on the following judgments :

1. Bharat Surgical Company Ltd. v. Collector of Customs -1991 (52) E.L.T. 472 (Tri.).

2. Menon Associates v. Collector, 1988 (34) E.L.T. 367.

3. Kothari & Co. v. Collector of Customs, 1989 (40) E.L.T. 155.

4. Gujarat State Export Corporation v. Union of India, 1984 (17) E.L.T. 50, In the case of Bharati Stirgical Co. v. Collector of Customs, Madras it was held that refusal to allow on import of identical goods which have been permitted earlier under O.G.L. of the same policy amounts to discrimination. Similarly in the case of Gujarat State Export Corporation v. U.O.I, it has been held that if the customs house is treating the earlier identical imported items as valid and was releasing the import on the earlier occasions, it cannot be said that the act was in contravention to provision of Section 111(d). Furthermore in this case when the plea of earlier clearance of similar view was taken before the Appellate Collector who chose to correct the wrong practice which could not be allowed to perpetrate, it was held by the Bombay Tribunal as inconsistant with the views of the Bombay High Court and was overruled.

In case of Kothari & Co. v. Collector of Customs it was held that when earlier imports have been allowed, the present imports cannot be disallowed.

Based on the ratio of the aforesaid judgment, it is pleaded that the imported goods cannot be denied classification under heading 9021.19 or alternatively 9018."

Heading 90.18 is extracted below :-


(1)     (2)       (3)           (4)                       (5)         (6)
"90.18                       Instruments and
                             appliances used 
                             in medical, sur-
                             gical, dental or 
                             veterinary scien-
                             ces, including 
                             apparatus, other 
                             apparatus and 
                             sight-testing in- 

                         --  Electro-diagnos 
                             tic apparatus
                             (including ap-
                             paratus for func-
                             tional explo-
                             ratory examina-
                             tions or for
                             checking phy-
                             siological para-
                             meters :

                9018.11  --  Electro-cardi-            40%   ..     90.18

                9018.19  --  Other                     40%   ..     90.18

                9018.20  --  Ultra-violet              40%   ..     90.18
                             infra red ray 

                             Syringes, need-           40%   ..     90.18
                             les, catheters, 
                             cannulae and 
                             the like:

                9018.31  --  Syringes, with            40%   ..     90.18
                             or without need-

                9018.32  --  Tubular metal             40%   ..     90.18
                             needles and 
                             needles for su-

                9018.39  --  Other                     40%   ..     90.18

                         --  Other instru-
                             ments and ap-
                             pliances, used in 
                             dental sciences:

                9018.41  --  Dental drill en-          40%   ..     90.18
                             gines whether or 
                             not combined on 
                             a single base 
                             with other den-
                             tal equipment

                9018.49  --  Other                     40%   ..     90.18

                9018.50  --  Other ophthal-            40%   ..     90.18
                             mic instruments 
                             and appliances

                9018.90  --  Other  instru-            40%   ..     90.18
                             ments and ap-


It is seen that sub-heading 9018.20 covers Ultra-violet or infra-red ray apparatus in the nature of Electrodiagnostic apparatus (includig apparatus for functional exploratory examinations or for checking physiological parameters). Sub-heading 9018.90 is a residuary entry under Heading No. 90.18, which covers instruments and appliances used in medical Sciences. From the description it appears that while the goods under consideration are not in the nature of ultra-violet or infra-red ray apparatus, they could be considered as an appliance used in the medical sciences. Although the product has mutiple uses, and some of the uses may not strictly fit in with the concept of medical use, keeping in view the overall effect and the applications for which the goods are likely to be marketed/purchased/used at the stage of our society, it appears to us that they are in the nature of a medical appliance, and are covered by sub-heading No. 9018.90 of the Tariff. How the goods are identified by the consumers as at present is a relevant criterion, as held by the Hon'ble Supreme Court in para 7 of their judgment in the case of CCE v. Fusebase Eltoto Ltd. -1993 (67) E.L.T. 30 (SC).

11. We are concerned in this case with the goods imported and the question relates to the goods as they are at the time of importation. The construction of the goods imported and the method of activating the substance within and the usage, would show that it is in the nature of a finished article. Taking note of the nature and manner of its application, we consider that it deserves the application of appliance or apparatus. The term 'in the Law Lexicon has been defined as under :-

"From the meanings given by the different dictionaries" it becomes clear that (1) an "Appliance" is quite distinct from "materials" from which it is made, and (2) an "appliance" as an apparatus, device or instrument, is "a means to an end". These two aspects should be borne in mind while considering whether a particular article can be called an appliance. The first aspect seeks to take an integrated view of the article concerned and says that materials or component parts of an appliance should not be mistaken as tantamount to the appliance itself. The second aspect emphasises the fact that the importance of an appliance consists in its utility to serve the object for which it is possessed." (taken from Tribunal's decision reported at 1991(56) E.L.T. 433 (Tribunal).

In this connection, a reference may also be made to the Tribunal's decision in the case of Miles India Ltd. Baroda v. CC, Bombay, 1983 (14) E.L.T. 2457 (CEGAT)

12. Taking all the relevant considerations into account, we consider that the 'Bio Health Heater' is correctly classifiable under sub-heading No. 9018.90 of the Tariff. In the circumstances of the case, there is no justification for imposing redemption fine or imposing any penalty on the appellants, and we set aside the redemption fine and the penalty. Both the appeals as well as the cross-objections filed by the Revenue are disposed of accordingly.