2026-VIL-326-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs – Medical Instruments versus General Printing Machinery – Thermal Printers for Diagnostic Imaging – Specific Adaptation for Medical Use – Exclusion of Chapter 90 goods from Section XVI – The appellant imported thermal printers classifying them under Customs Tariff Item (CTI) 9018 90 99 as instruments and appliances used in medical sciences availing concessional duty benefits - Revenue sought to reclassify the goods under CTI 8443 32 90 as "other printers capable of connecting to an automatic data processing machine," contending that the printers did not perform diagnostic functions themselves but merely printed images generated by other diagnostic equipment like CT or MRI scanners – Whether thermal printers specifically designed for printing medical diagnostic images are classifiable under CTI 9018 90 99 as medical instruments or under CTI 8443 32 90 as general printing machinery – HELD - While CTH 8443 covers printers using thermal print processes, Section Note (1)(m) to Section XVI of the Customs Tariff Act specifically excludes articles of Chapter 90, meaning if the goods fall under Chapter 90, they cannot be classified under Chapter 84; the decisive criterion for classification under CTH 9018 is the specific adaptation, construction, or design for professional medical use – The technical literature, white papers, and declarations from specialist doctors and a Chartered Engineer established that the imported thermal printers are distinct from ordinary desktop printers as they are capable of printing diagnostic quality images with necessary spatial and contrast resolution on heat-sensitive medical film, which is essential for primary reading by radiologists - The Revenue’s argument that the printers are not diagnostic because they only print images is rejected as the diagnostic process does not end at the monitor and the hard copy is integral to the diagnosis - The burden to prove re-classification lies with the Revenue, which failed to adduce evidence that the printers were not used for medical purposes. The thermal printers imported by the appellant would fall under CTH 9018 since they are instruments used in medical sciences – The impugned order is set aside and the appeal is allowed - Imposition of Penalty – Personal Penalty on Employee –Section 112(a) of the Customs Act, 1962 – The adjudicating authority imposed a personal penalty of Rs. 10 lakhs on the Manager, Customer Operations of the appellant-company under Section 112(a) of the Customs Act, alleging that the employee was involved in the mis-declaration of the classification of imported thermal printers to evade customs duty – Whether the penalty imposed on the employee under Section 112(a) is sustainable when the underlying demand of differential duty and confiscation against the company is set aside – HELD - The imposition of penalty on the employee was directly linked to the confirmation of demand and findings of mis-classification against the main appellant-company; since the classification of the thermal printers under CTI 9018 90 99 by the appellant-company is correct and set aside the order regarding the re-classification, demand of duty, interest, and confiscation, the grounds for imposing a penalty on the employee for alleged abetment or involvement in evasion automatically ceased to exist; consequently, the personal penalty imposed on the employee is unsustainable in law and set aside.
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