TaxTMI 
TaxTMI 
2024 (3) TMI 1437
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....ustoms Tariff Act, 1975 for imports. 2. Applicant has stated as follows in their statement of relevant facts having a bearing on the question(s) raised enclosed with the CAAR-1 application: 2.1 The applicant intends to import the reagent named "QDx InstacheckTM PCT" with reader "QDx InstacheckTM" as a kit i.e., the kit would be imported as one product having both the components i.e., the test cartridge and reader for diagnosis purpose. The kit is a fluorescence immunoassay for quantitative measurement of procalcitonin (PCT) concentration in human whole blood/scrum/plasma for diagnosis of bacterial infection and sepsis. It is for in vitro diagnostic use only. In vitro means elsewhere outside a living organism i.e., this kit is not placed or used inside a human being's body and therefore, these diagnostic reagents are not designed to be administered to the patients. Immunoassays are bioanalytical methods in which the quantitation of the analyte depends on the reaction of an antigen (analyte) and an antibody. One such immunoassay method is used in the product in question for diagnosis. 2.2 The reagent "QDx InstacheckTM PCT" works with the reader "QDx InstacheckTM". The compon....
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.... of the Customs Tariff Act, inter alia, explains that "For the purposes of heading 3002 the expression "immunological products" applies to peptides and proteins (other than goods of heading 2937) which are directly involved in the regulation of immunological processes, such as monoclonal antibodies (MAB), antibody fragments, antibody conjugates and antibody fragment conjugates, interleukins, inteferons (IFN) chemokines and certain tumor necrosis factors (TNF), growth factors(GF), hematopoietins and colony stimulating factors (CSF). 3002 Human Blood; Animal Blood Prepared For Therapeutic, Prophylactic Or Diagnostic Uses; Antisera, Other Blood Fractions And Immunological Products, Whether Or Not Modified Or Obtained By Means Of Biotechnological Processes; Vaccines, Toxins, Cultures Of Micro-Organisms (Excluding Yeasts) And Other Similar Products; Cell Cultures, Whether Or Not Modified - Antisera, other blood fractions and immunological products, whether or not modified or obtained by biotechnological processes: 300212 -- Antisera and other blood fractions 30021290 --- Other or 3006 Pharmaceutical Goods Specified in ....
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....significant component for the functionality of the product. It is fraction of animal blood and is antisera i.e., it is a blood serum containing monoclonal antibodies against specific antigens. HSN Explanatory Notes Sixth Edition (2017) provides for 'antisera' falling under HSN 3002.12 which reads as under : "Antisera are obtained from the blood of humans or of animals which are immune or have been immunized against diseases or ailments, whether these are caused by pathologic bacteria and viruses, toxins or allergic phenomena, etc. Antisera are used against diphtheria, dysentery, gangrene, meningitis, pneumonia, tetanus, staphylococcal or streptococcal infections, snake bite, vegetable poisoning, allergic diseases, etc. Antisera are also used for diagnostic purposes, including in vitro tests. Specific immunoglobulins are purified preparations of antisera" In a similar case of Span Diagnostics Ltd. v. Commissioner of C. Ex., Surat, 2007 (211) E.L.T. 521 (S.C.) Supreme Court observed in para 36 that Chapter Heading 3002 refers to 'blood fractions'. Merely because the medium used is latex (rubber) or paper, will not bring the items under Chapter Heading 3822. Once an ite....
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....in which the quantitation of the analyte depends on the reaction of an antigen (analyle) and an antibody. One such immunoassay method is used in the product in question for diagnosis. Therefore, the kit shall be liable to IGST rate of 5% considering it to be fluoro immunoassay diagnostic kit which has essential characteristics of antisera containing monoclonal anti-body used as diagnostic reagent. 4. The Jurisdictional Commissionerate of Customs i.e. Air Cargo Complex, Mumbai responded to the application which is reproduced as under: 4.1 As per submissions made by the Applicant, QDx InstacheckTM PCT reagent is also accompanied with QDx InstacheckTM reader and to be imported as single unit for in-vitro diagnostic use only. Further, as per the catalogue/Literature of "QDx InstacheckTM PCT" - it is consists of a 'Cartridge', an 'ID Chip' and a 'Detection Buffer Tube'. Wherein all the components of reagent are having their individual importance and essential character of the kit is diagnosis and same will be determined by 'Cartridge', 'ID Chip', 'Detection Buffer Tube' and QDx InstacheckTM reader as a whole. The detection buffer pre-dispensed in a tube contains fluoro....
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....EXCLUDING YEASTS) AND *OTHER SIMILAR PRODUCTS; CELL CULTURES, WHETHER OR NOT MODIFIED;". However, Chapter Note 1 (ij) to chapter 30 excludes "diagnostic reagents of heading 3822". Terms of the headings of CTH 3822 inter alia states that "DIAGNOSTIC OR LABORATORY REAGENTS ON A BACKING, PREPARED DIAGNOSTIC OR LABORATORY REAGENTS WHETHER OR NOT ON A BACKING, WHETHER OR NOT PUT UP IN THE FORM OF KITS, OTHER THAN THOSE OF HEADING 3006; CERTIFIED REFERENCE MATERIALS". Also relevant explanatory notes to CTH 3822 are reproduced below : The reagents of this heading should be clearly identifiable as being for use only as diagnostic or Laboratory reagents. This must be clear from their composition, labelling, instructions for in vitro or laboratory use, indication of the specific diagnostic test to be performed or physical form (e.g., presented on a backing or support). Diagnostic kits based on reactions such as agglutination, precipitation, neutralization, binding of complement, haemagalutination, enzyme-linked immunosorbent assay (ELISA), etc. are classified here. Malaria diagnostic kits, for example those based on monoclonal antibodies to pLDH (plasmodiu....
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....ized representatives of M/s. Tara Clinical Systems., CA Jayesh M Gogri and CA Payal Shah contended that the subject product name is "QDx Instacheck" with different parameters. They explained the components of the products which mainly constitute Detector Tube: Antibodies mainly from animal Serum, Cartridge, Detection buffer/stabilizer, Capillary Tube. The product in question is to be used in diagnose/detect TSH/other ingredients in the blood to detect the disease/infection/disorders etc. They further contended that the said goods merit classification under Customs Item-30021290. They also relied upon Customs Notification 50/2017 Sr. No. 166 A List-84 and GST Notification/Central Tax 1/2017 Sr. No. 180 entry No. 84. They also filed additional submissions and referred case law in the matter of Span Diagnostics Limited v. CCE Surat and COEN Bharat Ltd. v. CCE Vadodara in support of their claim. The department in their written submission contended that the subject goods should fall under CTI-38229090. The applicants have put their views against the department contention in their submission dated 20-2-2024 and submitted a copy of product description QDx Instacheck TSH & PCT for clarific....
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....sing chemically illuminating molecules. • Out of all 4 types above, there is no method which would use fluoro as well as enzyme technology together. • Further, Chapter Note 2 of Chapter 30 reads as under : "For the purposes of Heading 3002, the expression "immunological products" applies to peptides and proteins (other than goods of heading 2937) which are directly involved in the regulation of immunological processes, such as monoclonal antibodies (MAB), antibody fragments, antibody conjugates and antibody fragment conjugates, interleukins, interferons (IFN), chemokines and certain tumor necrosis factors (TNF), growth factors (GF), hematopoietins and colony stimulating factors (CSF)" The present case is of "antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes" In view of the above, we request you to pass a suitable Advance Ruling that the kit shall be classified under Chapter 3002 and shall be liable to IGST rate of 5% considering it to be fluoro immunoassay diagnostic kit. 7. I have taken into consideration all the materials placed on record in respect of ....
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.... buffer tube and dispense it into the sample well on the test cartridge. 4. Leave the sample-loaded test cartridge at room temperature for 12 minutes. 5. For scanning the sample-loaded test cartridge, insert it into the test cartridge holder of the QDx Instacheck Reader. Ensure proper orientation of the test cartridge before pushing it all the way inside the test cartridge holder. An arrow has been marked on the test cartridge especially for this purpose. 6. Press 'Select' button on the QDx Instacheck Reader to start the scanning process. 7. QDx InstacheckTM Reader will start scanning the sample-loaded test cartridge immediately. 8. Read the test result on the display screen of the QDx InstacheckTM Reader. From the above mentioned test procedures it is amply clear that without the use of QDx InstacheckTM Reader diagnosis is not possible. Further, to achieve the purpose i.e. to find out the PCT concentration in specimen/the patients' blood samples QDx InstacheckTM Reader is an indispensable component in the said diagnosis Kit and without QDx InstacheckTM Reader this Kit is not complete or self-contained. '....
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....their contention is well grounded in facts. The applicant is presenting confusing arguments and the said Commissionerate has elaborated their contention very well without any confusion. I concur with the submission of the said Commissionerate that essential character of the subject goods is their being a diagnosis kit while all the components of reagent having their individual importance. The subject goods are put up in the form of a Kit. 11. The Customs Tariff is aligned, up to the 6-digit level, with the Harmonized System of Nomenclature ('HSN') issued by the World Customs Organization ('WCO'). The HSN Explanatory Notes released by the WCO aid in the interpretation of the Headings of the Tariff and may be used as a safe guide for the same. It has been held so by the Supreme Court in the case of Collector of Customs, Bombay v. Business Forms Ltd. Thr. O.L., 2002 (142) E.L.T. 18 (S.C.). The classification of the goods under the Customs Tariff is governed by the principles as enumerated in the General Rules of Interpretation ('GRI') set out in the First Schedule to the Customs Tariff Act, 1975 (Tariff). In view of the Rule 1 & Rule 3(a) of the General Rules of Interpretation t....
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....ped using Substrate- enzyme reaction. • Radio Immunoassay (RIA)- using Radioactive isotopes. • Fluoro Immnoassay (ETA)- using fluorescence emitting molecule. • Chemilumineseence immunoassay (CLIA)- using chemically illuminating molecules. It is to underline that the principle behind the Immunoassay test is the use of an antibody that will specifically bind to the antigen of interest. If we go through the explanatory notes the Heading 3822, it is very categorically explained as below : "Diagnostic kits based on reactions such as agglutination, precipitation, neutralization, binding of complement, haemagglutination, enzyme-linked immunosorbent assay (ELISA), etc. are classified here. Malaria diagnostic kits, for example those based on monoclonal antibodies to pLDH (plasmodium lactate dehydrogenase), are also classified here". The process applied in this mechanism as can be seen in para 2.3 above, the applicant has contended the test uses a sandwich Immunodetection method which is based on antibody-antigen reaction with fluorescent technology and the detector antibody in buffer binds to PCT in serum sample. Hence, the diagnostic Ki....