TaxTMI 
TaxTMI 
2020 (9) TMI 1245
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.... heading 3822) to the Government Research Institutions. 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 ....
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....s" in the rate Notification as being applicable only to diagnostic reagents is an incorrect interpretation. When the Heading 3822 of the Customs 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....
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.... imported by the Appellant with a proper labelling and appropriate instructions for its use and is covered under HSN 3822 00 90 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 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 legisla....
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....clusion of any of the goods. o. this regard reliance is placed on the decision of the Hon'ble Uttarakhand High Court in the case of Himalaya Stone Industries v. State of Uttarakhand and Others, [2013] 62 VST 233 wherein on the issue of inclusion of "grit" manufactured by stone crushers 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 fro....
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....cular F. No. 296/07/2017-CX.9 dated 15.06.2017 provided for a list of goods with reduced tax liabilities under GST regime in comparison to erstwhile combined indirect tax rates. As per the said Circular, for the majority of supplies of goods, the tax incidence approved by the GST Council would be much lower than the erstwhile combined indirect tax rates levied [on account 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....
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....bmits that all the Notifications must be interpreted strictly. It is further submitted that no one is at liberty to add or modify the words of the entry while interpreting the scope of the notification. This has also been laid down by the Hon'ble Supreme Court in the following cases: Saraswati Sugar Mills v. Commissioner of C. Ex., Delhi-Ill, 2011 (270) E.LT. 465 (S.C.) - 2011-VIL-06-SC-CE, Hotel Leela Venture Ltd. V. Commissioner of Cus. (Gen.), 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....
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....rs is that order/decision should be outside the hands of the AAR before 14.01.2020 in GST Act. Further like to draw your kind attention to the decision of Hon'ble Supreme Court of India in the case of M. Ramakishtai & Co. reported as 93 STC page 406, where Hon'ble Supreme Court has held:- "The order was said to have been made on January 6, 1973, but it was served after the expiry of four years from the date of assessment order, on the assessee on November 21, 1973, 10.5 months later. There 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 ....
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....basically taxation slabs and not classification headings. These are meant to provide different tax rates even for goods which may classify under same heading/ sub-heading of a Section under Customs Tariff Act 1975. I. Entry 80 covers their goods: We find that the Appellant has submitted in the Grounds of Appeal that the goods imported by them viz. Laboratory Reagents are imported with a proper labelling and appropriate instructions for its use and is covered under HSN 3822 00 90, and thus consequentially covered under the term 'reagent' in Entry No. 80 of Schedule 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....