TaxTMI 
TaxTMI 
2013 (8) TMI 788
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....ever, these products are correctly classifiable under Heading 38.22 which covers "diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents, whether or not on a backing, other than those of Chapter 30". 1.1 The HIV kits work on the principle based on antigen and anti body reaction. The antigen (Recombinant Antigens) used in the kit are obtained from the cultures of Micro-organism which are immobilised on a porous immuno-filteration membrane. A colour conjugate (Protein A), also obtained from the cultures of Micro-organism is also used with HIV Antigen to obtain distinct colour. As the patient's sample passes through the membrane, HIV antibodies, if present in the sample, react with the immobilised Antigen and produce a distinct colour. 1.2 Main ingredient of Hepatitis B detecting kit is a combination of monoclonal and polyclonal antibodies. Monoclonal antibodies obtained from the cultures of Micro-organism are conjugated to colloidal gold. The monoclonal antibodies conjugated to colloidal gold and polyclonal antibodies are immobilised on a nitrocellulose strip. When the test sample comes in contact with this strip and if the test sample contai....
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.... diagnostic reagents obtained from cultures of micro-organism and being not of the type covered under chapter Note 3(d) of Chapter 30 of HSN, would be correctly classifiable under Heading 30.02, that Heading 3822 covers only those diagnostic/laboratory reagents whether or not on a backing which are classifiable under Chapter 30, that in view of this, if the product is classifiable under Chapter 30, its classification under Heading 3822 would be Ruled out, that according to WCO Ruling dated 23rd September 1997, the HIV infection detecting kit is classifiable under Heading 30.02, that the Apex Court in the case of Span Diagnostics Ltd. v. CCE, Surat reported in 2007 (211) E.L.T. 521 (S.C.) has held that the blood grouping reagents based on monoclonal antibodies are correctly classifiable under Heading 30.02, as the reagents are derived from cultures of micro-organism, and not under heading 30.05, that in this judgment, the Apex Court also held that even though the HSN mentions "Antisera, blood fractions and modified immunological products (MIP) including monoclonal antibodies" as one class, there is no contradiction between the Chapter Heading 30.02 of Central Excise Tariff and HSN H....
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.... the antigen or monoclonal antibodies and polyclonal antibodies have been immobilised. All the three types of diagnostic kit work on the principle of antigen antibody reaction. The point of dispute is as to whether these kits are classifiable under Heading 30.02 or 38.22. 7. The competing entries for the product, in question, as the same stood during the period of dispute are reproduced below :- "30.02 Antisera and other blood fractions; vaccines, toxins, cultures of micro-organisms (including ferments but excluding yeasts) and similar products". "38.22 Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, other than those of Chapter 30". 7.1 The HSN Headings 30.02 and 3822 during the period of dispute were as under :- "30.02 Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products." "38.22 Diagnostic or laboratory reagents on a backing, prepared diagnos....
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....y the "cultures of micro-organism", not the reagents derived from micro-organism cultures. This contention of the Revenue is not correct as in terms of HSN Explanatory Notes to Heading 30.02 - (a) the product group "Vaccines, toxins, cultures of micro-organism (excluding yeasts) and similar products" includes the diagnostic reagents of microbial origin, other than those provided for in Note 4(d) to HSN Chapter 30 (corresponding to Note 3(d) of Central Excise Tariff Chapter 30); (b) Diagnostic kits are classified in this Chapter if the essential character of the kit is given by any of the products of this heading and common reactions occurring in the use of such kits include agglutination, precipitation, neutralisation, binding of complement, haemagglutination. Enzyme Linked Immuno Sorbent Assay (ELISA) etc.; and (c) monoclonal antibodies which are specific immunoglobulin from selected and cloned hybridoma cells cultured in a culture medium are also covered by this heading under the product group - "modified immunological products, whether or not obtained by means of biotechnological process", which according to Apex Court's judgment in case of Span Diagnostic Ltd. (supra) ....