Supreme Court Upholds Higher Customs Duty on Laser Imagers; Holds Accessories Compatible With Medical Machines Under Different Tariff Headings Must Fall Under Residuary Heading 9033
Supreme Court Says Accessory Cannot Follow One Medical Tariff Heading When Compatible With Equipment Under Multiple Headings; Dismisses Carestream’s Customs Appeal
Facts
Carestream Health India Pvt. Ltd. imported “Dryview 6850 Laser Imagers W/3D” from China under a Bill of Entry dated 2 April 2013. It classified the goods under Customs Tariff Heading (CTH) 9018 90 19, applicable to “other diagnostic instruments and apparatus.”
The Assistant Commissioner of Customs, Chennai, rejected this classification by an Order-in-Original dated 24 June 2013 and directed that the goods be reclassified under CTH 9033 00 00, covering parts and accessories not otherwise specified or included in Chapter 90.
Carestream’s appeal was dismissed by the Commissioner of Customs (Appeals), Chennai, on 10 March 2014. Its further appeal before the CESTAT, South Zone Bench, Chennai, was also dismissed on 21 August 2024.
The tariff difference between the two classifications was 2.5%, resulting in a differential customs duty demand of ₹5,21,616.
Carestream therefore approached the Supreme Court under Section 130E(b) of the Customs Act, 1962.
The imported laser imager was essentially a printer using photothermographic dry-laser technology to develop medical images on film.
It could interface with several diagnostic systems, including:
- Magnetic Resonance Imaging (MRI);
- Computed Tomography (CT);
- Full-Field Digital Mammography;
- Digital Radiology;
- Computed Radiography;
- Picture Archiving and Communication Systems;
- Digital Fluoroscopy; and
- other grayscale film applications.
Critically, however, the laser imager possessed no independent diagnostic capability.
Issues
The principal issue before the Supreme Court was:
Whether the imported Dryview 6850 Laser Imagers were classifiable under CTH 9018 90 19 as “other diagnostic instruments and apparatus”, as claimed by Carestream, or under residuary CTH 9033 00 00 as accessories for machines and apparatus falling under Chapter 90.
The Court consequently had to determine:
- Whether a laser imager that receives data from diagnostic machines and prints it onto film can itself be regarded as a diagnostic apparatus;
- Whether it should instead be regarded as an accessory;
- How Note 2(b) and Note 2(c) of Chapter 90 apply where an accessory is compatible with machines falling under more than one tariff heading; and
- Whether Carestream could claim the benefit of Notification No. 12/2012 dated 17 March 2012 for the first time before the Supreme Court.
Petitioner’s Arguments
Carestream argued that the laser imager was neither a mere “part” nor an “accessory” but an apparatus used for diagnostic purposes.
According to Carestream, the laser imager operated in conjunction with medical diagnostic machines classified under CTH 9018. Since it received diagnostic information from such machines and converted that information into films for use by medical professionals, it should be treated as “other diagnostic instruments and apparatus” under CTH 9018 90 19.
Carestream further relied upon Commissioner of Customs, New Delhi v. C-Net Communication (India) Pvt. Ltd. to argue that the proper classification should depend upon the function performed by the equipment in conjunction with the principal machine.
It also sought to rely upon Notification No. 12/2012 dated 17 March 2012, which prescribed a 5% customs duty rate for specified goods required for medical, surgical, dental or veterinary use falling under certain tariff headings, including CTH 9018.
Respondent’s Arguments
The Revenue contended that the imported laser imager was not independently capable of diagnosis and therefore could not qualify as a diagnostic instrument or apparatus under CTH 9018 90 19.
It was merely an accessory that received information generated by diagnostic equipment and printed that information onto film.
More importantly, the Revenue pointed out that the laser imager was not exclusively or principally usable with machines falling under CTH 9018.
Carestream’s own catalogue demonstrated that the equipment was compatible with machines falling under both CTH 9018 and CTH 9022.
Therefore, Note 2(b) of Chapter 90 could not apply, and the laser imagers necessarily fell under the residuary classification in CTH 9033 00 00 pursuant to Note 2(c).
Analysis of the Law
Laser Imager Is Not a Diagnostic Apparatus
The Supreme Court rejected Carestream’s fundamental contention that the laser imager constituted a diagnostic apparatus in its own right.
The Court emphasised that the device had no diagnostic skill or capability of its own.
It could function only after receiving inputs generated by actual diagnostic equipment. Its role was limited to transferring the diagnostic information received from those machines onto film.
Therefore, it could not be classified as a “diagnostic instrument” or “diagnostic apparatus” under CTH 9018 90 19.
Laser Imager Performs Only an Ancillary Function
The Court rejected Carestream’s reliance on C-Net Communication.
Applying the functional test discussed in that judgment, the Supreme Court found that the laser imager neither aided nor augmented the diagnostic performance of the medical equipment.
The MRI, CT or other diagnostic equipment was fully capable of completing the diagnostic function independently.
The laser imager merely performed the ancillary function of printing diagnostic data onto film for preservation or subsequent use by medical professionals.
Accordingly, its proper character was that of an accessory, rather than a diagnostic apparatus.
Meaning of “Accessory”
The Supreme Court referred to technical and general dictionary meanings of “accessory”.
The McGraw-Hill Dictionary of Scientific and Technical Terms described an accessory as a component or assembly contributing to the effectiveness of equipment without changing its basic function.
The New International Webster’s Comprehensive Dictionary similarly treated an accessory as something which aids subordinately, an adjunct or accompaniment.
These definitions reinforced the conclusion that the laser imager was an accessory to medical imaging equipment.
Chapter 90 Note 2 Governs Classification of Accessories
Having classified the laser imager as an accessory, the Supreme Court turned to Note 2 of Chapter 90.
Note 2 establishes three classification rules:
Rule 2(a): Accessories which are themselves goods included in specific headings of Chapters 90, 84, 85 or 91 are classified under their own respective headings.
Rule 2(b): Other accessories suitable for use solely or principally with a particular kind of machine, or with several machines falling under the same tariff heading, are classified with those machines.
Rule 2(c): All other parts and accessories are classified under Heading 9033.
Rule 2(a) did not apply because the laser imagers were not independently included under another specified tariff heading.
The real controversy therefore lay between Rules 2(b) and 2(c).
Accessories Used Across Different Tariff Headings Fall Under 9033
This became the decisive legal issue.
Carestream’s laser imagers were compatible with several machines falling under CTH 9018, including:
- Linear Ultrasound Scanners;
- MRI apparatus;
- Echo Cardiographs; and
- ultraviolet or infrared ray apparatus.
However, the same laser imagers were also compatible with machines falling under CTH 9022, including:
- CT apparatus;
- non-portable X-ray generators and apparatus;
- portable X-ray machines; and
- equipment based upon alpha, beta, gamma or other ionising radiation.
The Court therefore had to determine whether an accessory compatible with machines under different tariff headings could still be classified with one category under Note 2(b).
It answered the question in the negative.
The words “solely or principally” in Rule 2(b), according to the Supreme Court, distinguish accessories dedicated to a particular kind of machine or machines falling under the same tariff heading from accessories capable of use with machines falling under different headings.
Where the accessory can be used across different tariff headings, Rule 2(c) applies and the accessory falls under residuary CTH 9033 00 00.
Different Duty Rates Supported the Interpretation
The Court also examined the practical tariff consequences.
At the relevant time:
- MRI apparatus under CTH 9018 13 00 attracted 7.5% duty;
- Linear Ultrasound Scanners under CTH 9018 12 10 attracted 7.5%;
- CT apparatus under CTH 9022 12 00 attracted 10%; and
- non-portable X-ray generators under CTH 9022 14 10 attracted 15%.
The Supreme Court reasoned that it would “defy logic and rationale” to classify an accessory under one tariff heading when it could equally be used with machines under another heading carrying materially different rates of customs duty.
Accordingly, the residuary heading provided a coherent classification for accessories capable of use across multiple headings.
Customs Notification Could Not Be Invoked Without Foundational Compliance
Carestream also attempted to rely upon Notification No. 12/2012 dated 17 March 2012.
The Supreme Court rejected this argument for two reasons.
First, the notification specifically identified certain tariff headings, including 9018, 9019, 9020, 9021 and 9022, but did not mention CTH 9033.
Second, Carestream had never relied upon the notification before the lower authorities and raised it for the first time before the Supreme Court.
Since the notification prescribed specific conditions for obtaining its benefit, Carestream could not claim the concession without first establishing foundational compliance with those conditions.
Precedent Analysis
Commissioner of Customs, New Delhi v. C-Net Communication (India) (Pvt.) Ltd., (2007) 12 SCC 72
Carestream relied upon this decision concerning classification of a signal decoder used with a television.
The Supreme Court had observed there that the proper inquiry concerns the function performed by the accessory in relation to the principal equipment.
However, applying that test actually went against Carestream.
Unlike an accessory which contributes to the functioning or performance of the principal equipment, the laser imager did not aid or augment the diagnostic performance of MRI, CT or other medical machines.
It simply printed diagnostic information already generated by those machines. The precedent therefore did not support classification as diagnostic apparatus.
Annapurna Carbon Industries Company v. State of Andhra Pradesh, (1976) 2 SCC 273
The Supreme Court relied upon this three-Judge Bench decision while explaining the meaning of “accessory”.
Annapurna Carbon Industries recognised that accessories may be goods manufactured for use as an aid or addition to other equipment.
Significantly, it also clarified that an accessory need not necessarily be confined to one particular machine; the same product may function as an accessory to more than one type of instrument.
That principle was directly relevant because Carestream’s laser imagers were capable of operating with several categories of diagnostic equipment.
Court’s Reasoning
The Supreme Court’s reasoning proceeded in two stages.
First, it determined the true character of the imported product.
The laser imager could not independently diagnose any medical condition. It merely received information from diagnostic machines and printed that information onto film.
Therefore, it was an accessory, not a diagnostic apparatus.
Second, the Court determined which tariff heading governed that accessory.
If the laser imager had been suitable solely or principally for machines falling under CTH 9018, Note 2(b) could potentially have allowed classification with those machines.
But Carestream’s own product catalogue demonstrated compatibility with machines falling under both CTH 9018 and CTH 9022.
The accessory therefore could not be tied to one particular tariff heading.
Note 2(c) consequently became applicable, requiring classification under the residuary CTH 9033 00 00.
The Supreme Court therefore found the interpretation adopted by CESTAT to be legally correct.
Conclusion
The Supreme Court dismissed Carestream Health India Pvt. Ltd.’s appeal and upheld the concurrent findings of the customs authorities and CESTAT.
It held that the imported Dryview 6850 Laser Imagers W/3D were not independently capable of diagnosis and therefore could not be classified as “other diagnostic instruments and apparatus” under CTH 9018 90 19.
They were accessories to diagnostic equipment.
More importantly, because they were compatible with machines falling under different tariff headings—CTH 9018 and CTH 9022—they necessarily fell under the residuary CTH 9033 00 00 pursuant to Note 2(c) of Chapter 90.
The differential customs duty demand of ₹5,21,616, arising from the 2.5% tariff difference, therefore remained undisturbed.
Case Details
Case: M/s Carestream Health India Pvt. Ltd. v. Commissioner of Customs
Court: Supreme Court of India
Case Number: Civil Appeal No. 3440 of 2025; 2026 INSC 837
Judge: Justice Sanjay Kumar and Justice Sanjeev Sachdeva
Date: 12 August 2026
Result: Appeal dismissed; classification of imported laser imagers as accessories under residuary CTH 9033 00 00 upheld instead of CTH 9018 90 19.
