TaxTMI 
TaxTMI 
2019 (9) TMI 986
X X X X Extracts X X X X
X X X X Extracts X X X X
....ications') Q2. If the said product "Dialyzer" falls under Entry No. 255 of Schedule I to the Rate Notifications, whether it would be classified under Chapter 90 (i.e. Tariff item 9018 90 3 1) or Chapter 84 (i.e. Tariff item 8421 29 00). At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGS T Act. 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus - Statement of the relevant facts having a bearing on the question raised The relevant facts of the case are as follows: Background of operations: 2.1. Applicant, a Pvt. ltd company incorporated under the provisions of the Companies Act, 1956 holding GST regn no. ('GSTIN') 27AADCN1920C1ZZ with effect from 01.07.2017, is located at Plot No. E-1, MIDC, Kesurdi, Taluka-Khanda1a, Dist. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 12/2012-CE dt. 17.03.2012 Clinical / Adult Diaper 9619 00 40 9619 00 40 6.00% 12.00% 2/2011-CE dt. 01.03.2011 Rubber Stoppers 4016 99 80 4016 99 80 12.50% 18.00% NA Rubber Product-Other 4016 99 90 4016 99 90 12.50% 18.00% NA Statement containing the Applicant's interpretation of classification in respect of the aforementioned products Applicant prefers to present the application before this Hon'ble Authority on the following, among other grounds, each of which is taken in the alternative & without prejudice to the other. 2.10. Applicant's interpretation of law or facts: (i) As mentioned above, current application for advance ruling is being made to determine if the product "Dialyzer" can be classified as 'Disposable sterilized dialyzer or micro barrier of artificial kidney under Entry No. 255 of Schedule I to the Rate Notifications. (ii) Relevant extract of Entry No. 255 of Sch. I to the Rate Notfn. has been reproduced for reference below: S.No. Chapter/ Heading/Sub-heading Tariff Item Description of Goods 255 90 or 84 Disposable sterilized dialyzer or micro barrier of artificial kidney (iii) The terms 'Dialyzer' or 'Artificial kidney' have not been ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der (3). Dialyzer is used in hemodialysis to filter out wastes and fluid from the bold of patient with kidney failure. Blood flows on one side of the membrane, whilst the other side is bathed by the electrolyte or salt solution (Dialysis fluid) continually produced by a proportionate system (Hemodialysis machine), which also monitors and controls treatment. Molecules small enough to pass through the membrane, such as salts and low molecular protein breakdown products, tend to move in the direction of decreasing concentration. Larger substances, such as proteins and cells having dimensions greater than the pore diameter are retained. Hemodialysis is generally performed three times weekly for patients with irreversible rental or kidney failure, whilst the treatment regimens for acute or reversible rental failure are governed by clinical requirements and may include intermittent or continuous treatment over a period of several days. References: * Kloff WJ. Berk HT J,ter Welle Metal, The artificial kidney, a dialyzer with great area. Acta Med Scand 1944; 117:121-128. * Nicholas Hoenich. Cellulose for medical applications: Past, present and future. Bio Resources. 2006; 1(2):270-280....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ratus for liquids" which inter alia include ion exchanger plant or apparatus; household type filters; machinery and apparatus for filtering or purifying beverages, other than water; oil or petrol-filters for internal combustion engines. (ii) Applicants submit that even invoking the principles of ejusdem generis and/or noistur a sociis, the "Dialyzer" cannot be classified under Tariff Item 8421 29 00 as "other filtering or purifying machinery and apparatus", as the same does not have any resemblance to the products covered therein, as blood in human body cannot be compared with any of the liquids meant filtration mentioned under the said Heading, especially in a case where "Dialyzer", by name, is specifically covered under Tariff Item 9018 90 31. (iii) The "Dialyzer" would be classifiable under Tariff Item itself, as the products covered under Sub heading 9018 90 are medical or surgical instruments and appliances, having specific function, and hence, the product would correctly and appropriately fall in the family of those products under Sub-heading 9018 90 and to be precise under Tariff Item 9018 90 31. Further, the goods falling under Sub-heading 9018 90 are used for purif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d from the following: (ii) As per Rule I of GIR, firstly, the classification of a product has to be done by invoking the description in the Heading and corresponding Notes to Sections and Chapters, which if invoked, the product "Dialyzer" would be classifiable under Heading 901 8, as Tariff Item 9018 90 31 gives the specific description of the product, i.e. Dialyzer or Artificial kidney and as per Note I(m) to Section XVI, under which Chapters 84 and 85 are covered, articles of Chapter 90 are not covered under the said Section, which means goods covered under Chapter 90 cannot be classified under Chapter 84. (iii) Further, if Rule 3(a) of GIR is invoked, the Heading which provides the more specific description has to be preferred to a Heading providing general description. In the present case, Tariff Item 9018 90 31 specifically describes the products thereunder as artificial kidneys, kidney machines and dialyzers. (iv) Likewise, by invoking Rule 3(b) of GIR, the Heading which provides the essential character of the product has preferred for classification. In the present case, Dialysis, i.e. purification of blood in human body, is the essential character of the Dialyzer and hen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt in the case of CCE v/s Minwool Rock Fibres Ltd., reported in 2012 (278) ELT 581 (SC) = 2012 (2) TMI 289 - SUPREME COURT, wherein it has been held as under: Classification of goods - Two competitive headings of Excise/Customs Tariff- Heading beneficial to assessee adopted. [para 13] 2.18 Conclusion: Basis the above submissions, the Applicant is of the view that the product "Dialyzer" merits classification under Tariff item 9018 90 31 and consequently as "Disposable sterilized dialyzer or micro barrier of artificial kidney' under Entry No. 255 of Schedule I to the Rate Notifications. Further to above submissions, we most respectfully pray that: * Allow us to reiterate all the submissions without prejudice to one another; * Grant a personal hearing to put forth our contentions and explain our submissions before passing any order in this regard; * Allow us to amend, alter and add to the present application; * Allow us to produce additional documents and other material during the time of * Personal Hearing and * Pass such orders and directions as may be deemed proper and necessary. 2.19 Additional submissions (i) We, Nipro India Corporation Private Limited ("Nipro ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....H COURT, was challenged before the Honorable Supreme Court in Special Leave Petition vide Diary No.2023/2017, and the said petition was dismissed. Whereas the Kolkata High Court judgement in the case of Sanwar Agarwal v. Commissioner of Customs (Port) and Ors [2016 (336) ELT 42 (HC-Kol) = 2016 (4) TMI 621 - CALCUTTA HIGH COURT, is pending before the Division bench of Calcutta High Court. 3.3 In view of this, the decision of Hon'ble Supreme Court has attained finality and is binding on the lower authorities as per Article 141 of the Constitution of India. Since issue in the present case is fairly covered by the judgement of Hon'ble Supreme Court, even though under the erstwhile regime, the Applicant is of the view that the product "Dialyzer" merits classification under Tariff item 9018 90 31 and consequently as 'Disposable sterilized dialyzer or micro barrier of artificial kidney' under Entry No. 255 of Schedule I to Notification Number 1/2017-Central Tax (Rate) dated 28 June, 2017 and Notification Number 1/2017-lntegrated Tax (Rate) dated 28 June, 2017 (collectively referred to as the 'Rate Notifications"). 2.21. Meaning of the term "Disposable" used in "Disposable sterilized dia....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... We have enclosed the same herewith as Exhibit E. (vi) The symbol required to be displayed on single use or disposable medical devices is given in Point 5.4.2 of Table I - Symbols to convey information essential for proper use. This symbol indicates a medical device that is intended for one use, or for use on a single patient during a single procedure. Further, sterilized medical devices are also required to display a certain symbol given in Point 5.2.4 of Table I, which indicates that the medical device has been sterilized using irradiation. We have enclosed images of the packaging of the product Dialyzer manufactured by the Company, on which such symbols are being displayed, as Exhibit F. (vii) Further, we have also enclosed the Instructions for Use ('IFU') which are provided along with the Dialyzers, as Exhibit G. Under Point 3- "Caution after use", it has been clearly mentioned that the Dialyzers are for single use only and they should be disposed of immediately after use, by any means suitable for avoiding contamination. (viii) Therefore, based on the above submissions, it is clear that the product Dialyzer manufactured by the Applicant is disposable in nature and the same....
X X X X Extracts X X X X
X X X X Extracts X X X X
....issions. Jurisdictional Officer was not present. 05. OBSERVATIONS We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional office. The subject matter concerns classification of the product, namely "Dialyzer" manufactured by the applicant. They have queried as to whether it would be classified under Chapter 90 (i.e. Tariff item 9018 90 31) or Chapter 84 (i.e. Tariff item 8421 29 00). The applicant has submitted that the product 'Dialyzer' is a disposable, medical equipment/apparatus used in the Dialysis Machine for purification of blood during the course of dialysis treatment which separates blood impurities like urea/creatinine, etc. from the blood by the principle of diffusion through semi permeable membrane. From a perusal of the submissions made by the applicant, we find that the subject product, classification of which is sought, is exclusively used in Dialysis Machines. In medical parlance, dialysis is considered to be the process of removing excess water, solutes- and toxins from the blood in people whose kidneys can no longer perform these functions naturally. A Dialysis machine is a machin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8 and appealed against it in the CESTAT on the ground that though the Kerala High Court in the case of Terumo Penpol Ltd. vs. Additional Commissioner of Customs, Cochin [2017 (350) E.L.T. 74 (Ker.)] = 2017 (1) TMI 1466 - KERALA HIGH COURT upheld the classification of the product in the heading 9018 and the Supreme Court dismissed the department's appeal against it, it was dismissed in limine and hence cannot be considered as having attained finality. We have examined the question of classification of the impugned product in the context of this existing ambiguity and came to a finding that there is a conflict between the Board's Circular No. 19/2013 dated 09/05/2013 and the Customs Tariff Act, 1975. Whereas the Board's Circular clarifies that the product should be classified in 8421 29 00, the First Schedule to the Customs Tariff Act, 1975 lists the item in the Heading 9018 as under: 9018 90 31 Renal dialysis equipment (artificial kidneys, kidney machines and dialyzers) In this situation, we refer to a settled law that wherever there is a conflict between a Rule/Regulation/Circular and an Act of Parliament, the latter will prevail. In consideration of this finding alone, we come ....