TMI Blog2021 (4) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... ) imported and supplied by the Appellant and classified under Tariff Item 3822 00 90 of the Customs Tariff Act, 1975 is covered under Entry No. 80 of Schedule-II to Notification No. 1/2017-Integrated Tax (Rate), dated 28th June, 2017 attracting a levy of Integrated Tax at the rate of 12%. - KAR ADRG 24/2021 - - - Dated:- 16-4-2021 - DR. M.P. RAVI PRASAD AND SRI. MASHHOOD UR REHMAN FAROOQUI, MEMBER Represented by : Sri. Dayananda, CA Authorised Representative ORDER UNDER SECTION 98(4) OF CGST ACT, 2017 UNDER SECTION 98(4) OF KGST ACT, 2017 M/s. Kaustubha Scientific Research Laboratory Private Ltd., (herein after referred to as the applicant'), #142, 3rd Floor, 5th Cross, RMV Extension, Bengaluru (Urban), Karnataka- 560080 having GSTIN number- 29AABCP0825A1ZX have filed an application for Advance Ruling under Section 97 of CGST Act, 2017, read with Rule 104 of the CGST Rules and Section 97 of the KGST Act, 2017 read with Rule 104 of KGST Rules 2017, in FORM GST ARA-01 discharging the fee of ₹ 5,000/- each under the CGST Act and the KGST Act. 2. The applicant is a registered person under the provisions of the Central Goods and Services Tax Act, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmity with the respective monographs prescribed. These official reference standards are global in nature and are required to be used by drug manufacturers to ensure that the quality of the medicines produced by them are in conformity with the respective monographs prescribed by these official pharmacopoeias. The drug manufacturing companies use these PRS in their laboratory tests on all drug substances for determining the purity of medicine and identification and quantification of pharmaceutical impurities. PRS is classifiable as Prepared Laboratory Reagent' and is covered under Tariff Entry 3822 00 90 of the Customs Tariff Act. This classification is supported by the decision of Hon'ble CESTAT, Bangalore in the matter which is reported as LGC Promochem India Pvt. Ltd. v. Commissioner of Customs Service Tax, Bangalore [2016 (340) E.L.T. 406 (Tri. - Bang.)]. This decision has been upheld by Hon'ble Supreme Court of India and reported in 2018 (360) E.L.T. A173 (S.C.). 5.3 The applicant submits that the classification of PRS under Tariff Item 3822 00 90 is undisputed and the present application has not been filed for clarification with regard to the classifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on. a backing, other than those of heading 3002 or 3006; certified reference materials . The relevant portion of the Customs Tariff Act is extracted hereunder: Tariff Item Description of goods 3822 Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, other than those of heading 3002 or 3006; certified reference materials 3822 00 - Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, other than those of heading 3002 or 3006; certified reference materials.. ---For medical diagnosis.. 3822 00 11 -- Pregnancy confirmation reagents 3822 00 12 ---- Reagents for diagnosing AIDS 3822 00 19 ---- Other 3822 00 90 ---Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form (e.g., presented on a backing or support). [Emphasis supplied] 5.9 In the instant case, the goods intended to be imported viz. Pharmaceutical Reference Standards(`PRS') is a 'prepared laboratory reagent without a backing' with a label and proper instructions for its use. 5.10 Classification of goods covered under the First Schedule to the CTA is done as per the General Rules for Interpretation (hereinafter referred to as 'GI Rules'). Rule 1 to GI Rules gives precedence to the Section or Chapter Notes while classifying a product. For the legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require. As per Rule 1 of the GI Rules, classification is to be determined only on the basis of description of the heading, read with relevant Section or Chapter Notes. Further, in terms of Rule 3(a) of the GI Rules, the heading which provides the most specific description shall be preferred to headings providing a more general description. Therefore, in terms of Rule 1 read with Rule 3(a) of the GI Rules, the Pharmaceutical Refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7.9 Plain reading of both the communications from the competent authority to comment upon the issue seems to establish that intended use of Pharmaceutical Reference Standards, are Chemicals (Reagents) substance of known purity which are intended to be used exclusively for a specified analytical, calibrating or referencing purpose and the same should be stated on the label and or accompanying certificate or literature. 7..10 On perusal of the records, we find that the appellant had shown that the imparted products, which had label and certificate of analysis from United State Pharmacopoeia convention indicating that Pharmaceutical Reference Standards is as per the standard laid down by them. It has to be noted that Pharmaceutical Reference Standards which are accompanied by the certificate issued by US Pharmacopoeia are distinctive product and gets classified under laboratory chemical or under Chapter Heading 3822 read with Chapter Notes of Chapter 38 as reproduced hereinabove. The conclusion that can be reached is that Pharmaceutical Reference Standard cannot be classified as certified Reference Materials and consequently not extending the scope of applicabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a backing, other than those of heading 3002 or 3006; (d) Prepared diagnostic reagents without a backing, other than those of heading 3002 or 3006; (e) Prepared laboratory reagents on a backing, other than those of heading 3002 or 3006; and (f) Prepared laboratory reagents without a backing, other than those of heading 3002 or 3006. As mentioned in ground A supra, the Pharmaceutical Reference Standards intended to be imported by the Applicant is 'Prepared laboratory reagents without a backing, other than those of heading 3002 or 3006' with a proper labelling and appropriate instructions for its use and iscovered under (f) supra. and thus consequentially covered under the term 'reagent' in Entry No. 80 of Schedule II of the Rate Notification which read as All diagnostic kits and reagents . Accordingly, the intended import and supply of 'Pharmaceutical Reference Standard' would attract a levy of Integrated Tax at the rate of 12 per cent. 5.15 The applicant submits that the Entry No. 80 to Schedule-II of the Rate Notification reads as All diagnostic kits and reagents . It is submitted that as the term 'and' has used in the Entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions made by the applicant in their application for advance ruling as well as the submissions made by applicant and his authorized representatives during the hearing. 9. We observe that the facts of the case are identical to the ruling passed by this authority in the case of M/s. Chromachemie Laboratory Pvt. Ltd., vide Order No. KAR ADRG 71/2019 dated 23.09.2019 , wherein it was ruled that Entry. No. 80 of Schedule II to Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 is not applicable to prepared laboratory reagents. The Karnataka Appellate Authority of Advance Ruling, while disposing the appeal filed by M/s. Chromachemie Laboratory Pvt. Ltd., has set aside the aforesaid ruling vide order No. KAR/AAAR-08/2019-20 dated 14.01.2020 . The relevant portion of the order is quoted below: 18. The interpretation given by the Authority for Advance Ruling that the entry Sl. No. 80 covers only diagnostic kits and diagnostic reagents is not correct. The principle of ejusdem generis applied by the Authority in interpreting the entry Sl. No. 80 is misconstrued. The rule of ejusdem generis applies when (1) the statute contains an enumeration of specific words; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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