Case Law Details
In re Siemens Healthcare Pvt. Ltd. (CAAR Mumbai)
The Customs Authority of Advance Ruling (CAAR) in Mumbai recently issued a significant ruling concerning Siemens Healthcare Pvt. Ltd. This legal determination revolves around the classification of the ‘Linear Accelerator’ (LINAC), a sophisticated machine used predominantly in cancer treatments. The ruling is highly technical, citing various components and usages of the machine to clarify its proper classification under Customs Tariff Heading 9022. This article aims to break down the key elements of this CAAR ruling, thereby providing a comprehensive understanding of its implications.
The Petition by Siemens Healthcare Pvt. Ltd.
Siemens Healthcare Pvt. Ltd., one of the largest importers of the LINAC machine, initiated this case. Their submission points to the widespread use of this machine in various types of hospitals, emphasizing its role in the treatment of cancer patients.
The Complex Functioning of LINAC
Siemens provided a detailed technical explanation of the LINAC machine. They highlighted its major components, such as the accelerator, beam-transport system, and treatment-delivery system. Moreover, they elucidated the sophisticated methods of targeting high-energy x-rays to destroy cancer cells while sparing healthy tissue.
Legal Framework
Siemens argued that the LINAC machine is not an X-Ray diagnostic machine, but a high-end radiotherapy equipment. They cited Customs Tariff Heading (CTH) 9022 to claim that the product merits classification under CTH 90221490.
Counter Arguments and Ruling
The Commissioner of Customs countered by stating that the machine could be categorized either under heading 9018 or 9022. Ultimately, the CAAR ruled in favor of Siemens’ classification under CTH 9022. The authority justified the decision by recognizing the LINAC’s primary role as a radiotherapy apparatus and its dependency on high-energy X-rays.
Conclusion: The CAAR Mumbai’s ruling on Siemens Healthcare Pvt. Ltd.’s Linear Accelerator is both intricate and enlightening. It not only confirms the classification of the machine under CTH 9022 but also enriches our understanding of this crucial medical device’s components and functionalities. This ruling is essential not just for Siemens but for all stakeholders in healthcare and customs, setting a legal precedent for future classifications of similar advanced medical equipment.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
M/s Siemens Healthcare Pvt Ltd (IEC No.: 0315054191) (Herein after will be referred to as ‘Applicant’) filed an application for advance ruling in the Office of Secretary, Customs Authority for Advance Ruling (CAAR), Mumbai on 19.05.2023 seeking a ruling on the correct classification of “Linear Accelerator” (LINAC).
2. Submission by the Applicant:
2.1 The applicant has informed that they are one of the largest importers of Cancer Therapy Machine (Linear Accelerator), which are widely used in Government hospitals, Private Hospitals & other for providing treatment to CANCER /PATIENTS.
2.2 It has been informed that a medical linear accelerator (LINAC) is the device most commonly used for external beam radiation treatments for patients with cancer. It delivers high-energy x-rays or electrons to the region of the patient’s tumor. These treatments can be designed in such a way that they destroy the cancer cells while sparing the surrounding normal tissue. The LINAC is used to treat all body sites, using conventional techniques, Intensity-Modulated Radiation Therapy (IMRT), Volumetric Modulated Arc Therapy (VMAT), Image Guided Radiation Therapy (IGRT), Stereotactic Radiosurgery (SRS) and Stereotactic Body Radio Therapy (SBRT).
2.3 The Functions of True Beam linear accelerator has been informed by the applicants as below:
2.3.1. The equipment comprises of main components namely: (i) an accelerator to produce electrons, (ii) a beam-transport system to steer the beam to the treatment-delivery system, and (iii) a treatment-delivery system. These three systems that is accelerator, beam-transport, and treatment-delivery systems need to interact to produce the desired treatment.
2.3.2. The linear accelerator uses electrons in a part of the accelerator called the “wave guide,” which allows these electrons to collide with a heavy metal target to produce high-energy x rays. These high energy x-rays are shaped as they exit the machine to conform to the shape of the patient’s tumor and the customized beam is directed to the patient’s tumor. The beam may be shaped either by blocks that are placed in the head of the machine or by a multi leaf collimator that is incorporated into the head of the machine. The patient lies on a moveable treatment couch and lasers are used to make sure the patient is in the proper position. The treatment couch can move in many directions including up, down, right, left, in and out. The beam comes out of a part of the accelerator called a gantry, which can be rotated around the patient. Radiation can be delivered to the tumor from any angle by rotating the gantry and moving the treatment couch.
2.3.3 True Beam linear accelerator system helps to treat patient with proper dose to exact target infected area (cancer affected area) to deliver radiation to patient, so as to minimizing damage to the healthy tissues, which is determined during treatment planning (part of dosimetry) with the help of dedicated computers system using specialized treatment planning software. Depending on the radiation delivery method, several angles or sources may be used to sum to the total necessary dose. The planner will try to design a plan that delivers a uniform prescription dose to the tumor and minimizes dose to surrounding healthy tissues.
2.4 Applicant has informed that the Linear Accelerator (LINAC) is not an X-Ray Diagnostic Machine, rather it High End “Radio Therapy Equipment” for treatment of cancer. They have further produced relevant portion of CTH 9022 and have informed that the product merits classification under CT! 90221490.
3. Technical Write up of Linear Accelerator:
3.1 Radiation therapy or radiotherapy, often abbreviated RT, RTx, or XRT, is therapy using ionizing radiation, generally as part of cancer treatment to control or kill malignant cells and normally delivered by a linear accelerator. Radiation therapy may be curative in a number of types of cancer if they are localized to one area of the body. It may also be used as part of adjuvant therapy, to prevent tumor recurrence after surgery to remove a primary malignant tumor (for example, early stages of breast cancer). Radiation therapy is synergistic with chemotherapy, and has been used before, during, and after chemotherapy in susceptible cancers. The subspecialty of oncology concerned with radiotherapy is called radiation oncology.
3.2 Radiation therapy is commonly applied to the cancerous tumor because of its ability to control cell growth. Ionizing radiation works by damaging the DNA of cancerous tissue leading to cellular death. To spare normal tissues (such as skin or organs which radiation must pass through to treat the tumor), shaped radiation beams are aimed from several angles of exposure to intersect at the tumor, providing a much larger absorbed dose there than in the surrounding, healthy tissue. Besides the tumour itself, the radiation fields may also include the draining lymph nodes if they are clinically or radiologically involved with tumor, or if there is thought to be a risk of subclinical malignant spread. It is necessary to include a margin of normal tissue around the tumor to allow for uncertainties in daily set-up and internal tumor motion. These uncertainties can be caused by internal movement (for example, respiration and bladder filling) and movement of external skin marks relative to the tumor position.
3.3 The linear accelerator uses electrons in a part of the accelerator called the “wave guide,” which allows these electrons to collide with a heavy metal target to produce high-energy x-rays. These high energy x-rays are shaped as they exit the machine to conform to the shape of the patient’s tumor and the customized beam is directed to the patient’s tumor. The beam may be shaped either by blocks that arc placed in the head of the machine or by a multi leaf collimator that is incorporated into the head of the machine. The patient lies on a moveable treatment couch and lasers are used to make sure the patient is in the proper position. The treatment couch can move in many directions including up, down, right, left, in and out. The beam comes out of a part of the accelerator called a gantry, which can be rotated around the patient. Radiation can be delivered to the tumor from any angle by rotating the gantry and moving the treatment couch.
3.4 The equipment comprises main components: (i) an accelerator to produce electrons, (ii) a beam transport system to steer the beam to the treatment-delivery system, and (iii) a treatment-delivery Varian Confidential system. The accelerator, beam-transport, and treatment-delivery systems need to interact to produce the desired treatment.
3.5 To treat the Patient it is important to give a proper dose and also to the exact target infected area (cancer affected area) so as to deliver the radiation to the patient and minimizing damage to the healthy tissues. Delivery parameters of a prescribed dose are determined during treatment planning (part of dosimetry). Treatment planning is generally performed on dedicated computers using specialized treatment planning software. Depending on the radiation delivery method, several angles or sources may be used to sum to the total necessary dose. The planner will try to design a plan that delivers a uniform prescription dose to the tumor and minimizes dose to surrounding healthy tissues.
3.6 The Eclipse treatment planning system, and ARIA Oncology information system that provide treatment management system, which enables to treat the patient with utmost care thereby reducing the time for treatment and minimizing the radiation to the healthy tissues there by speeding the treatment.
3.7 The linear accelerator technology and computerization, making the dose delivery extremely sophisticated and heavily dependent on skills of the radiotherapy team consisting of radiation oncologist, medical physicist, radiation dosimetrist, and treatment technologist. Reference may also be made to the AERB certificate wherein it states that the goods are Radiation Beam generating unit. But in addition it also has the delivery dosing unit which makes it a complete system which helps deliver the exact dose to the patient after detailed treatment plans by the radiotherapy team.
3.8 The True beam linear accelerator is a type of external beam radiation therapy and is also considered as Radiation Beam Delivery unit and is used for cancer treatment by delivering the radiation beam to the cancerous cells and destroying the cancer cells and thereby providing treatment to the patient.
4.1 The applicant in their CAAR-1 indicated that they intend to import the impugned goods from the jurisdiction of Office of the Commissioner of Customs, NS-V, JNCI-I, Post Sheva, Taluka — Uran, Dist — Raigad, Maharashtra- 400707. The application was forwarded to the jurisdictional Commissioner of Customs, Nhava Sheva-V for their comments on classification of Linear Accelerator.
4.2 The Office of the Commissioner of Customs, NS-V, JNCI-I, Post Sheva, Taluka — Uran, Dist —Raigad, Maharashtra- 400707 sent the comments vide letter dated 08.06.2023. comments were received from other jurisdictional Commission crates. The comments received from Customs Commissionerate, Nhava Sheva are summarized below:
1. The goods is a medical equipment. As per Import Tariff, medical goods are covered either under heading 9018 or 9022. The heading 9018 covers “Instruments and apparatus used in medical, surgical, dental or veterinary sciences, including scintigraphy apparatus, other electro-medical apparatus and sight-testing instruments”. Whereas heading 9022 covers, “Apparatus based on the use of X-ray or of alpha, beta, gamma or other ionizing radiations, whether or not for medical, surgical, dental or veterinary uses, including radiography or radiotherapy apparatus, X-ray tubes and other X-ray generators, high tension generators, control panels and desks, screens, examination or treatment tables, chairs and the like.”
2. It is found that the no specific entry of LINAC under heading 9018, thus it appears that the goods viz. LINAC is out of purview under heading 9018. Since the goods under question is based on X-ray apparatus and the heading 9022 covers that apparatus based on the use of X-ray whether or not for medical, surgical, dental or veterinary uses including radiography or radiotherapy apparatus, thus it is more specifically covers under heading 9022. For the sake of simplicity, the heading 9022 is referred as under:
3. In view of the above, the subheading 9022 12, 9022 13 & 9022 14 covers all X-ray based medical, surgical or veterinary uses apparatus including radiography or radiotherapy apparatus. LINAC is radiotherapy system having non-portable system, hence it merits classifiable under heading 9022 and more appropriately under CTI-I 90221490. However, the Hon’ble Customs Authority for Advance Rulings may decide the case on its merit.
5. A personal hearing was held virtually on 21.08.2023 at 12:00 pm. Shri Manish Soin, Sr. Vice President Export Control & Customs along with other officials of applicant appeared for the hearing. No one appeared on behalf of the jurisdictional commissioncratc. The applicant demonstrated a presentation wherein they reiterated the points submitted in the application and requested for the ruling regarding the accurate classification of Linear Accelerator.
6. I have considered all the materials placed before me in respect of the subject goods. I have gone through the submissions made by the applicant during the personal hearing as well as the response received from the jurisdictional Customs Commissionerate. Therefore, 1 proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework having bearing on the classification of the Linear Accelerator. The issue before me is the classification of Linear Accelerator.
6.1 I find that a linear accelerator, also referred to as LINAC, is a machine that aims radiation at cancer tumors with pinpoint accuracy, sparing nearby healthy tissue. LINAC help cancer specialists treat cancers of almost all body parts. It delivers high-energy x-rays or electrons to the region of the patient’s tumor. These treatments can be designed in such a way that they destroy the cancer cells while sparing the surrounding normal tissue.
6.2 The linear accelerator uses electrons in a part of the accelerator called the “wave guide,” which allows these electrons to collide with a heavy metal target to produce high-energy x-rays. These high energy x-rays are shaped as they exit the machine to conform to the shape of the patient’s tumor and the customized beam is directed to the patient’s tumor. The equipment comprises main components: (i) an accelerator to produce electrons, (ii) a beam transport system to steer the beam to the treatment-delivery system, and (iii) a treatment-delivery Varian Confidential system. The accelerator, beam-transport, and treatment-delivery systems need to interact to produce the desired treatment.
6.3 I find that Linear Accelerator is a medical device and is used as a radiotherapy apparatus. The penetrating power of X-Rays and their destructive effect on certain living tissues are used in the treatment of diseases like cancer.
6.4 Before deciding on the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/ Section notes along with I-ISN explanatory notes.
6.5 I find that Medical or Surgical instruments and apparatus falls under Chapter 90 of Schedule-I of Customs Tariff. I find that Linear accelerator which is a medical device and is used as a radiotherapy apparatus, operates on the functioning of High energy X Rays and therefore the same appears to be rightly classifiable under CTI-I 9022 of Customs Tariff 1975.
6.4 Discussion on Tariff:
6.4.1 Relevant portion of CTH 9022 is reproduced below for case of reference:
On the plane reading of above, I find that the apparatus based on the use of X-Rays whether or not for medical, surgical, dental or veterinary uses, including radiography or radiotherapy apparatus arc aptly covered under heading 9022.
6.4.2 Relevant para of heading 9022 under I-ISN Explanatory notes is also produced below for ease of reference:
90.22
(B) Radiotherapy apparatus. Both the penetrating power or X-rays and their destructk.e effect on certain living tissues arc used in the treatment of many diseases. e.g., certain ,z1; in diseases and certain tumours. Tins treatment is known as “superficial” or “deep” according to the depth reached by the rays.
From the above it is confirmed that radiotherapy apparatus working on the principle of penetrating power of X-Rays are aptly covered under CTI-I 9022.
6.5 I find that Linear Accelerator is not specifically covered under any sub heading of CT1I 9022 of Customs Tariff. CTH 9022 covers all the apparatus based on the use of X-Rays and that include Radiotherapy apparatus as well. Further, the applicant has submitted that L1NAC is Non-portable and hence cannot be classified under CTI 90221420 which covers Portable X-Ray Machine. I find that the product under consideration is rightly classifiable under residual entry CTI 90221490.
6.6 I also find that both the applicant and comments received from Commissioner of Customs, Nhava Sheva-V have proposed that the accurate classification of the subject product is CTI 90221490.
7. In view of the foregoing discussions, I rule that Linear Accelerator merit classification under Heading 9022 and specifically under subheading 9022 1490 of the First Schedule to the Customs Tariff Act, 1975.
