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Dated: 14.04.2025

CESTAT Hyderabad Held that the Carbon and Sulphur Analyzer is not classifiable as a gas or smoke analysis apparatus

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad Bench, allowed the appeal filed by Verder Scientific Pvt Ltd, setting aside the decision of the Commissioner (Appeals), Hyderabad, which had upheld a classification under CTH 90271000 (gas or smoke analysis apparatus) for the Carbon and Sulphur Analyzer CS-800.

Background of the Case

• Verder Scientific Pvt Ltd imported Carbon and Sulphur Analyzer CS-800, an analytical instrument used to determine the elemental content of carbon and sulphur in metal samples.
• Customs authorities classified the goods under Customs Tariff Heading (CTH) 90271000 as “gas or smoke analysis apparatus”.
• The appellant contested this classification, stating that the device does not analyze combustible gases or smoke, but rather detects elemental composition in solid metals.

Appellant’s Contentions

• The analyzer is used to determine elemental content (C & S) in solid metals, and not for gas or smoke analysis.
• The gases are generated only as part of the testing process, not the primary object of analysis.
• There is no direct match in the Harmonized System Nomenclature (HSN), so the correct classification would fall under a residuary heading within CTH 9027, such as 90278090 or 90279090.

Revenue’s Arguments

• Cited the Supreme Court decision in Dunlop India Ltd., arguing that when a specific heading exists, resorting to residuary headings is impermissible.
• Claimed that the instrument was, in effect, analyzing gases released during combustion of the sample.
• Noted that in subsequent imports, the appellant had used CTH 90271000 and paid duty accordingly.

CESTAT’s Analysis & Findings

• Referred to the HSN explanatory notes for CTH 90271000, which clearly list the type of gases and use-cases (e.g., analysis of CO₂, NOₓ in coke ovens, blast furnaces, etc.).
• Noted that the CS-800 is not analyzing those gases (e.g., CO₂, SO₂), but measuring carbon and sulphur content in solids.
• Confirmed that other similar analyzers, not specifically analyzing gaseous by-products, have been classified under 90278090.
• Held that the input to the instrument is not gas or smoke, but a solid metal sample, disqualifying it from classification under 90271000.
• Ruled that subsequent classification practices by the appellant have no bearing on the correctness of the classification during the disputed period.

Final Order

• The CESTAT set aside the order of the Commissioner (Appeals).
• Allowed the appeal of Verder Scientific Pvt Ltd, thereby removing the classification under CTH 90271000.
• Held that the Carbon and Sulphur Analyzer is not classifiable as a gas or smoke analysis apparatus.

Significance

• Reinforces that classification must be based on primary function and usage, not incidental by-products.
• Emphasizes that technical functionality and product design are key to accurate customs classification.
• Provides relief to importers of specialized laboratory instruments that do not align with conventional tariff interpretations.

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Source: CESTAT Hyderabad

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