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TMI Blog2020 (9) TMI 1245X X X X Extracts X X X X X X X X Extracts X X X X ..... titutions. Till the end of June, 2019, IGST was being levied by Customs Appraising Department on laboratory reagents @12% in terms of S.No.80 of Schedule II to the CGST Notification 01/2007-CT dated 28.06.2017. However later Customs observed that laboratory reagents of Customs tariff heading 3822 cannot be so taxed and IGST would be charged under the residuary S.No.453 viz. 'Goods which are not specified in Schedule I, II, IV, V or VI', of Schedule III of the Notification. II. QUESTION FOR ADVANCE RULING: The question raised for Advance Ruling by the Appellant was,- "Whether "LABORATORY REAGENT" is classifiable under Tariff Heading 38220090 at S. No. 80 of the Schedule II, OR as "Goods which are not specified in Schedule I, II, IV, V or VI" at SI. No. 453 of Schedule III under CGST Notification No. 1/2017-Central Tax (R) dated 28th June 2017 (As amended and Notification No. 35/2017-State Tax 2 dated 30.06.2017 (as amended)?" Advance Ruling: The AAR ruled, - "The Laboratory Reagents are the goods which are not specified in Schedule I, II, IV, V or VI of the Notification 01/2017-Central Tax (Rate) and Integrated Tax (Rate) dated 28.06.2017 and as such it is recovered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Tariff clearly has within its fold reagents which are both diagnostic as well as laboratory reagents on a backing and prepared diagnostic and laboratory reagents with or without a backing, the use of the single word "reagents" in the entry SI. No 80 of Schedule II should be understood as a generic word encompassing all the reagents mentioned under Heading 3822 of the Customs Tariff." e. That, Harmonized Commodity Description and Coding System Explanatory Notes (ENs), constitutes the official interpretation of the Harmonized System at the international level and provide a commentary on the scope of each heading and are generally indicative of the proper interpretation of the headings. The Harmonised System of Nomenclature (HSN) Explanatory Notes at Page No. VI-3822-1 relating to Chapter Heading 38.22 States, "This heading covers diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents, other than diagnostic reagents of heading 30.02 or diagnostic reagents designed to be administered to the patient and blood grouping reagents of heading Laboratory reagents include not only diagnostic reagents, but also other analytical reagents used for purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule II of the Rate Notification which read as "All diagnostic kits and reagents". Accordingly, the import and supply of Laboratory Reagent would attract a levy of Integrated Tax at the rate of 12 per cent. k. That, expression "AND? used in the term 'All diagnostic kits and reagents' is Conjunctive and therefore the term 'Reagent' is a separately identified term. The Appellant submits that the said Entry under SI. No. 80 to the Notification has been incorrectly interpreted by the Authority in the impugned Ruling; that, the word 'reagent' is not preceded by the word 'Diagnostic'. Thus, by restricting the entry to only 'Diagnostic' the Authority in the impugned Ruling is adding words to the Entry under the said Notification, and the same is against the principles of interpretation of law; that, had the intention of the legislature been to include only diagnostic reagents in the above entry, then the legislature would have specified the same as 'all diagnostic kits and diagnostic reagents' in the Entry. The Appellant therefore submits that the word 'and' should be interpreted in a manner which is concomitant with the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in item 94 of Schedule II(B) of the Uttarakhand Value Added Tax Act, 2005, the Court held that, in view of the amendment in the law, it has brought all types of grits within the item and, did not exclude any grit available from any sources. It was held that applying the principle of ejusdem generis, treating the Entry to mean grit only from one source is not permissible. The relevant extract of the decision is as follows: "Prior to the amendment, the said item was as under: 'River sand and grit excluding (a) boulders and /(b) grit and sand manufactured by stone crushers." The said entry was altered on January 21, 2006, to the effect as follows: 'River sand, grit and boulders." On a query made to the Commissioner under section 57 of the said Act, the Commissioner held that grit" mentioned in entry 94 of the said Schedule with effect from January 21, 2006 shall also include "grit" manufactured by stone crushers. On an appeal preferred by the State before the Tribunal, the Tribunal has stated that the word "grit" finding place in item 94 of the said Schedule, must be a product of the river sand, not a product of the stone crushers. Challenging the said finding, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of Central Excise duty rates / embedded Central Excise duty rates / Service Tax post-clearance embedding, VAT rates or weighted average VAT rates, cascading of VAT over excise duty and tax incidence on account of CST, Octroi, Entry Tax, etc.] by the Centre and States. The Appellant submits that the list of such supplies, where the GST incidence would be lower than the erstwhile combined indirect tax rates also included an Entry under SI. No. 48 as 'diagnostic kits and reagents'. In view of the said Circular dated 15.06.2017, the intention of the legislature was very clear to reduce the rate of tax on the supply of reagents. t. The Appellant submits that entry under SI. No. 453 to Schedule-Ill is a residuary entry which provides for an applicable rate of Integrated Tax at the rate of 18 per cent on all goods that are not specified in Schedule I, II, IV, V or VI of the Rate Notification. The Appellant further submits that the above residuary entry covers only those goods which are not specifically covered under in Schedule I, II, III, IV, V and VI of the Rate Notification. Laboratory classified under Tariff Item 3822 00 90 to CTA is covered under more specific Entry No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai, 2009 (234) E.L.T. 389 (S.C.): Commissioner of C. Ex. Jaipur v. Mewar Bartan Nirman Udyog, 2008 (221) E.L.T. 27 (S.C.) - 2008-VIL-54-SC-CE. The Appellant further submits that term 'and' as used in the Entry under SI. No. 80 has been used to separate the words, '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. x. The Appellant further submits that since no specific exclusion or qualification which has been used before the word 'reagent' under SI. No. 80 to evidence the exclusion of any particular type of 'reagent' in the absence of such specific exclusion or qualification to the term 'reagent', both laboratory reagents and diagnostic reagents shall be covered under SI. No. 80 to Schedule II of the Rate Notification. y. That in the 16th GST Council Meeting dated 11.06.2017. the Agenda item No 3 (SI. No 41) relates to the rate adjustments based on the recommendations received from Trade and Industry and the Fitment Committee as per its mandate and after analyzing the tax incidence on the diagnostic and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no explanation by the Deputy Commissioner why the service of the order was so delayed: Held that, in the absence on any explanation whatsoever, the court must presume that the order was not made on the date it purported to have been made and that it could have been made after the expiry of the period of four years prescribed for passing such an order in revision. The order was bad." The force is also drawn from the decision of Hon'ble High Court of Andhra Pradesh at Hyderabad in the case of Ushodaya Enterprises reported as 111 STC 711, where Hon'ble High Court has held :- "Limitation - Order served on dealer after expiry of limitation 8 months after date of passing - presumption that order not passed on purported date - order liable to be quashed -Andhra Pradesh General Sales Tax Act (6 of 1957)." The force is also drawn from the decision of Hon'ble Sales Tax Tribunal Haryana in the case of M/s Krishana Traders reported as 8 PHT 102, where Hon'ble Tribunal has held:- "Mere signatures on the order sheet on the date of passing of the order cannot be taken that assessee is delivered the copy of the order." It goes to prove that order passed by AAR is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule II of the Rate Notification which reads, "All diagnostic kits and reagents". Thus, the Appellant's goods are admittedly Laboratory Reagents. Now, the Entry 80 of Schedule II, and the residuary S.No.453 of Schedule III, of the Notification 1/2017-CT(R) dated 28.06.2017, are reproduced here for ready reference: Schedule II - 6% S. No. Chapter / Heading / Subheading / Tariff item Description of Goods (1) (2) (3) 80. 3822 All diagnostic kits and reagents Schedule III-9% S. No. Chapter / Heading / Subheading / Tariff item Description of Goods (1) (2) (3) 453. Any Chapter Goods which are not specified in Schedule I, II, IV, V or VI A plain reading of the entry at Sr. No. 80 makes it clear that only the Diagnostic Kits and. Reagents of Chapter Heading 3822 have been placed under Schedule II which attracts a lower rate of GST viz. 12%. The Chapter 3822 of the 1st Schedule to the Customs Tariff Act 1975 is also being reproduced below for ready reference: Tariff Item Description of goods Unit Rate of duty Standard Preferential Areas (1) (2) (3) (4) (5) 3822 DIAGNOSTIC OR LABORATORY REAGENTS ON A BACKING, PREPARED DIAGNO ..... 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