Relief to Glenmark Pharma: CESTAT Rules Crimp Pumps Fall Under Positive Displacement Pumps, Not Toilet Spray Parts [Read Order]

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that crimp pumps imported by Glenmark Pharmaceuticals Ltd. are classifiable under positive displacement pumps (CTI 8413 5010 / 8413 5090) and not as mounts and heads for toilet sprays under CTI 9616 1020 as claimed by the Customs authorities.

Glenmark Pharmaceuticals Ltd., the appellant, imported crimp pumps used as components in nasal spray devices designed for medicament delivery. The appellant classified the goods under positive displacement pumps and self-assessed the customs duty accordingly.

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During the audit, the department disputed this classification and argued that the goods should be classified under mounts and heads for scent sprays and similar toilet sprays, attracting a higher duty rate of 20%.

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Following this, the department issued a show cause notice proposing reclassification and demanding differential duty, interest, and penalty. The adjudicating authority confirmed the reclassification under CTI 9616 1020 through the Order-in-Original dated 30.05.2023. Aggrieved by this decision, the appellant approached the CESTAT.

The appellant’s counsel argued that the crimp pumps were specifically designed for medical use in nasal sprays for dispensing medicaments and not for scent or cosmetic sprays. The appellant relied on product literature, Harmonized System of Nomenclature (HSN) explanatory notes, which supported classification under Chapter 84 for such pumps.

The revenue counsel argued that the pumps had features similar to spray mechanisms used in toilet sprays and justified classification under CTI 9616 1020. The department also relied on the General Rules of Interpretation (GIR) 2(a), arguing that the goods, being unassembled articles, should be classified as if they were the finished product.

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The two-member bench comprising S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) observed that classification should primarily be determined by the terms of the headings, section notes, and chapter notes as per GIR 1.

The tribunal explained that GIR 2(a) cannot be invoked when classification is clear under GIR 1. The tribunal further observed that the explanatory notes under HSN confirm that pumps for liquids, including those operated by hand, are covered under Chapter 84.

The tribunal ruled that the crimp pumps are correctly classifiable under CTI 8413 5010 / 8413 5090 and set aside the order of the adjudicating authority.

To Read the full text of the Order CLICK HERE

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