TMI Blog2021 (4) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... G, KARNATAKA] . The Pharmaceutical Reference Standards (Prepared Laboratory Reagents) 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 25/2021 - - - Dated:- 16-4-2021 - DR. M.P. RAVI PRASAD AND SRI. MASHHOOD UR REHMAN FAROOQUI, MEMBER Represented by : Sri K. Dayananda, C.A. Authorised Representative ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER SECTION 98(4) OF THE KGST ACT, 2017 M/s. Analytica Chemie Inc., ( hereinafter referred to as the Applicant ), No. 488B, 4th Floor, Model Export Bhavan, 14th Cross, Peenya Industrial Area, Bangalore-560058, having GSTIN 29ABLFA4210C1ZV, have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules 2017 and Section 97 of 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 Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n all drug substances for determining the purity of medicine and identification and quantification of pharmaceutical impurities. 4.5 The applicant states that PRS is classifiable as 'Prepared Laboratory Reagent' and is covered under Tariff Entry 3822 00 90 of the Customs Tariff Act, in line with 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.). 4.6 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 classification of PRS. 4.7 As mentioned supra, the applicant imports Pharmaceutical Reference Standards classifying it under Tariff Item 3822 00 90 of the CTA from various official pharmacopoeias like US Pharmacopoeia (USP), European Pharmacopeia (EDQM), British Pharmacopoeia (BP) and supplies it to major pharmaceutical companies in India while adopting the classification u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 90, the applicant states as under: a. Chapter 38 of the Customs Tariff Act, 1975 (hereinafter referred to as CTA') provides for classification of Miscellaneous chemical products . Chapter Heading 3822 covers 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 . b. It is submitted that Sub-heading 3822 00 covers the following goods: Diagnostic reagents on a backing; Laboratory reagents on a backing; Prepared diagnostic reagents on a backing, other than those of heading 3002 or 3006; Prepared diagnostic reagents without a backing, other than those of heading 3002 or 3006; Prepared laboratory reagents on a backing, other than those of heading 3002 or 3006; Prepared laboratory reagents without a backing, other than those of heading 3002 or 3006; and Certified reference materials. c. The applicant states that the Harmonised System of Nomenclature (hereinafter referred to as I-ISN1 Explanatory Notes at Page No. VI-3822-1 [Explanatory Notes - Sixth Edition (2017) Volume 2 - Sections VI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Reference Standards (PRS') is appropriately classifiable under Chapter Heading 3822 of Customs Tariff Act. f. The applicant has been classifying PRS as a 'prepared laboratory reagent without a backing', under Tariff Entry 3822 00 90, in line with the decision of the Hon ble CESTAT Bangalore in the matter of LGC Promochem India Pvt. Ltd. v. Commissioner of Customs Service Tax, Bangalore [2016 (340) E.L.T. 406 (Tri. - Bang.)] It held as follows: 7.7 In our considered view, the Pharmaceutical Reference Standard are required for analytical measurement which depend on many variable to provide data needed to make informed decisions. The quality of this data is as good as the Reference material used and high-quality Reference material are available only from the organiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S 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 applicability of notification to products other than covered under Chapter Heading 28 and Chapter 29 is also not applicable. The applicant submits that the Hon'ble CESTAT Bangalore in the above Final Order has held that the imported product i.e. 'Pharmaceutical Reference Standards' cannot be classified as Certified Reference Materials but the same 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 gets classified under laboratory chemical under the Chapter Heading 3822 of the CTH. Further the Hon ble Supreme Court has affirmed the decision of the Hon'ble CESTAT Bangalore in the matter of Commissioner of Customs Service Tax, Bangalore v. LGC Promochem India Pvt. Ltd. reported in 2018 (360) E.L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence materials . Prepared laboratory reagent is covered under the Chapter Heading 3822 of the Customs Tariff Act. j. The Applicants submits that in view of the HSN Explanatory Notes discussed supra, Prepared laboratory reagents include - Diagnostic reagents, and Other analytical reagents used for purposes other than detection or diagnosis. The applicant submits that the Pharmaceutical Reference Standards imported by the Applicant is undisputedly Prepared Laboratory Reagents in the nature of 'other analytical reagents used for purposes other than detection or diagnosis' and classified under Tariff Entry 3822 00 90 to Customs Tariff Act. k. The applicant states that the Rate Notification under Entry No. 80 of Schedule II provides for rate of tax of 12% for goods falling under Chapter Heading 3822. Therefore, in terms of the Chapter Heading, the impugned goods are covered under Entry No.80 of the Rate Notification. 6. The applicant argues that the reagent in entry No.80 of Schedule II includes the Pharmaceutical Reference Standards for the following reasons: 6.1 The applicant states that the description under Entry No.80 of Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'all diagnostic kits' and 'Reagents'. Therefore, the term 'reagents' has to be treated as a separate word whose identity shall be separate from the words preceding it. The applicant refers to the following decisions in support of the claim that the term should be understood in a conjunctive sense a. Commissioner of Central Excise, Panchkula V. Kulcip Medicines (P) Ltd., reported in 2009 (14) STR 608 (P H) b. Mazagaon Dock Ltd. V. CIT (1958) 34 ITR 368 (SC) c. Star Industries V. Commissioner of Customs (Imports), Nhava Sheva reported in 2014 (312) ELT 209 (Tri.-Mumbai) d. Star Industries V. Commissioner of Customs (Imports), Raigad [2015 (324) ELT 656 (SC)]. 6.6 The applicant further submits that upon perusal of the description under Entry No. 80 to Schedule-II of the Rate Notification, it leads to a clear conclusion that the Entry covers reagents which may be either used in laboratory or for diagnosis. The Applicant submits that there is no specific exclusion or qualification which has been used before the word 'reagent' in the Entry to evidence the exclusion of any particular type of reagent'. Hence, in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 11. We have considered the 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. 12. 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
