CESTAT Rules AGFA’s Drystar Thermal Printers Classifiable as Medical Instruments Under Chapter 90; Quashes Duty Demand and Penalties

February 21, 2026 : The Delhi Principal Bench of the Customs, Excise & Tax Appellate Tribunal (CESTAT) has held that thermal printers imported by M/s AGFA Healthcare India Pvt. Ltd. for medical diagnostic use are classifiable under Customs Tariff Item (CTI) 9018 90 99 as medical instruments, and not under CTI 8443 32 90 as ordinary printers.

The ruling came in M/s AGFA Healthcare India Pvt. Ltd. v. The Additional Director General (Adjudication), Customs Appeal No. 50795 of 2020, along with a connected appeal filed by Mr. Yogesh More, Manager, Customer Operations. The matter arose from Order-in-Appeal dated 17.02.2020 passed by the Additional Director General (Adjudication), which had reclassified the goods and confirmed differential duty along with penalties.

The Bench comprising Justice Dilip Gupta (President) and Ms. Hemambika R. Priya (Member Technical) pronounced the final order on 20.02.2026, allowing both appeals.

Background of the Dispute

AGFA had imported various models of “Drystar” thermal printers, including Drystar 5301, 5302, 5503 and Axys, during the period 01.07.2017 to 31.03.2019. The company classified them under CTI 9018 90 99 as instruments used in medical sciences and availed exemption under Notification No. 50/2017-Customs, paying Basic Customs Duty at 7.5% and IGST at 12%.

The Directorate of Revenue Intelligence took the view that the printers were classifiable under CTI 8443 32 90 as printers capable of connecting to an automatic data processing machine or network. It was alleged that the printers did not perform any diagnostic function and merely printed images generated by CT or MRI machines. A show cause notice was issued proposing reclassification, recovery of differential duty under Section 28(4) of the Customs Act, confiscation, and imposition of penalties. A separate penalty of Rs. 10 lakh was proposed against Mr. Yogesh More.

The adjudicating authority confirmed the demand and penalties.

Tribunal’s Analysis

The Tribunal examined the competing tariff entries and the Harmonised System of Nomenclature (HSN) Explanatory Notes to Heading 9018. It noted that Chapter 90 covers instruments and appliances used in medical sciences and includes articles clearly identifiable for medical use by reason of their special design or construction.

The Bench observed that the decisive criterion for classification under Heading 9018 is whether the goods are specifically designed or clearly identifiable for professional medical use. It referred to:

• Product brochures describing Drystar printers as delivering “diagnostic quality grayscale hardcopies.”
• A white paper stating that medical hardcopy film remains, in many situations, the primary medium for diagnosis.
• Declarations from specialist radiologists.
• A Chartered Engineer’s certificate stating that the thermal printer is an integral part of the diagnostic process.

The Tribunal found that the Drystar printers were used with MRI scanners, CT scanners, digital X-ray and ultrasound systems and were capable of producing high-resolution diagnostic-quality images on heat-sensitive medical films. It distinguished them from ordinary thermal printers used in retail, banking, shipping and other industries.

Importantly, the Bench emphasised that the burden to prove reclassification lies on the department. Relying on the Supreme Court’s decision in H.P.L. Chemicals Ltd. v. Commissioner of Central Excise, it reiterated that if the Revenue seeks to classify goods under a different heading, it must adduce proper evidence. In the present case, the department failed to establish that the imported printers were not used for medical diagnostic purposes.

The Tribunal also referred to Section Note (1)(m) to Section XVI of the Customs Tariff, which excludes articles of Chapter 90 from Chapter 84. Once the goods were held to fall under Heading 9018, classification under Heading 8443 was ruled out.

Relief Granted

Holding that the thermal printers were correctly classifiable under CTI 9018 90 99, the Tribunal set aside the finding of classification under CTI 8443 32 90. Consequently:

• The demand of differential duty and interest was quashed.
• Confiscation and penalties imposed on the company were set aside.
• The penalty of Rs. 10 lakh imposed on Mr. Yogesh More under Section 112(a) was also annulled.

The order dated 17.02.2020 passed by the Additional Director General (Adjudication) was set aside, and both appeals were allowed.