TaxTMI 
TaxTMI 
2023 (8) TMI 1703
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....t of 'Sponge Platinum' for manufacture of Active Pharmaceutical Ingredients (APIs) used for oncology related drug formulations, by availment of concessional rate benefit under serial number 415A of Notification No. 50/2017- Cus. dated 30.06.2017 is the proposed activity and the applicant has sought ruling on the question, whether the import of 'Sponge Platinum' for manufacture of Active Pharmaceutical Ingredients (APIs) used in oncology related drug formulations is eligible for concessional rate of Basic Customs Duty by virtue of serial number 415A of Notification No. 50/2017-Cus. dated 30.06.2017, as amended from time to time. 3.1 The applicant has stated that, they have been importing various inputs (including Platinum) under Advance Authorisation scheme and has been claiming exemption from Basic Customs Duty (BCD) and Integrated Tax (IGST) in terms of Notification No. 18/2015-Customs dated 01.04.2015; they are importing 'Sponge Platinum' under Advance Authorization Scheme and are discharging export obligations on time; now they propose to import 'Sponge Platinum' by availing the benefit of concessional rate of Basic Customs Duty under serial nu....
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.... Platinum" is processed with reagents and PTCP is obtained, such PTCP is sent to the applicant's premises by the job-worker, where it is used for further necessary chemical reactions/steps as required to obtain the requisite APIs (i.e. Carboplatin and Oxaliplatin): the *Sponge Platinum` imported by the applicant is classified under Customs Tariff Heading 7110 of the First Schedule to the Customs Tariff Act. 1975 specifically under Customs Tariff Item 71101120 as Platinum, in powder form; whereas, the APIs manufactured by using `Sponge Platinum' are classified under CTH 28439019 as inorganic or organic compounds of precious metals: they have regularly imported Platinum in the past and exported the manufactured APIs and the classification of either *Sponge Platinum' or the APIs has never been disputed/questioned by Customs. The applicant has also stated that the annexures enclosed are sensitive documents, it is requested that the particulars may be kept confidential and no details from these annexures be directly published in public domain and copy of ruling for this case is not published on the website and/or any case law reporters in order to maintain confidentiality in....
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....r's facility: unavailability/absence of exhaustive capital intensive manufacturing infrastructure, commercial feasibility of outsourcing the requisite activities to an external service provider, so and so forth: IGCR Rules recognises such needs and provide the procedural requirements that must be complied with. while clearing the imported goods for job-work activity: therefore. subject to fulfilment of such procedural conditions as are prescribed by Rules 6 and 7- an importer who has availed an exemption notification's benefit for importing eligible goods, and is required to operate under IGCR Rules, shall be permitted to clear these eligible imported goods to job-worker for further processing/manufacturing; therefore. subject to fulfilment of the conditions as prescribed in Rules 6 and 7, the applicant - as an importer of goods (i.e. "Sponge Platinum') is. in principle, entitled to clear such goods to its job-worker under IGCR Rules; thus in other words, import of *Sponge Platinum' by the applicant, and its subsequent clearance to its job-worker for further conversion of such Platinum to PTCP- would be in conformity with the IGCR Rules if the applicant follows the ....
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....e nature of such job-work activity or the ultimate use of these precious metals; that this exclusion is intended for certain kind of job-work, viz. jewellers, goldsmiths, gold artisans and the like; the certain kind of job-work, viz. jewellers, goldsmiths, gold artisans and the like; the exclusion cannot apply to players such as the applicant, which intends to use precious metal ('Sponge Platinum') for manufacture of oncology related drug formulations; the fact that the exclusion is intended to apply to a certain class of job-work is evident from the phraseology of the provision; the exclusion reads as "by a person on goods belonging to the importer except gold, jewellery and articles thereof, and other precious metals or stones and the term "job worker" shall be construed accordingly"; that an accepted principle of construction/ interpretation of legal provisions is- "noscitur a sociis" which basically means that the meaning of a word is or may be known from the accompanying words ; this principle has been time and again helmed by the Hon'ble Supreme Court to interpret the ambit/coverage of provisions; the principle is that when two or more words which are susceptible ....
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.... such bricks/block have about 95% Platinum and the rest are metals such as iridium/ruthenium/cobalt which are alloyed with Platinum to give it the requisite physical properties; using Sponge Platinum with minimum purity of 99.95% would be commercially infeasible for jewellery/article making as the high purity will have to be transformed to low purity brick; a certificate by jeweller of technical expertise, who is also a govt. approved valuer-confirming that Platinum Sponge Powder (of CTI 71101120) having minimum purity of 99.95% cannot be used for ornaments/jewellery purposes unless it is transformed into metal form with reducing the purity to 90% to 95%, is submitted. 3.6 Further, the applicant has submitted that, the exclusion as contemplated in Rule 3 (1) (g) of IGCR Rules is applicable only w.r.t. job-worker activities carried out by jewellers/artisans/smiths of precious metals with regard to manufacture of jewellery and articles of gold, other precious metals, or stone and not to the cases such as the applicant - who shall use 'Sponge Platinum' for manufacture of Platinum based drugs/APIs and will be clearing this imported 'Sponge Platinum' to its job-worker....
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....APIs used for oncological treatment; further, both the above APIs are classifiable under the heading 2843; the applicant intends to manufacture the above APIs by using the imported 'Sponge Platinum' as an input on job work basis and following the procedures of the IGCR, 2022. On the basis of the points extracted from the application for advance ruling vis-à-vis the conditions to be fulfilled in order to avail the above notification benefit, it is submitted that as per the First Schedule to the Customs Tariff Act, 1975, the item, 'Sponge Platinum' is correctly classifiable under the heading 7110; the resultant product Carboplatin and Oxaliplatin are correctly classifiable under the heading 2843; however, w.r.t third point which provides for satisfying the procedure of under the IGCR, 2022, the applicant has stated that they want to send the imported 'Sponge Platinum' as input for job work. It is observed that "Job work" as defined under clause (g) of Rule 3 under the IGCR, 2022 would not extend to items as gold, jewellery and articles thereof, and other precious metals or stones; therefore, the imported item in question, 'Sponge Platinum' which....
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....ents, the phrase 'other precious metals' should be read, as such its meaning is consistent with the meaning of other words or phrases used for exclusion of other goods, meaning thereby that gold, jewellery and articles thereof have been excluded which conveys that exclusion is of gold and its jewellery articles and same should be inferred while referring to 'other precious metal'. Thus, sponge platinum which is being imported for use in manufacture of drug related intermediates and APIs are not covered under exclusion under the said Rules for the purposes of job-work. Thereby, they are eligible for exemption under the said notification. During the hearing, he also mentioned that reference in this regard has also been made to CBIC however, clarification is awaited. 8 Finding that the application is valid in terms of the provisions of the Customs Act, 1962 and the CAAR Regulations, 2021, having gone through submissions of the applicant, comments of the concerned Commissionerate and having heard the applicant, I proceed to examine the question on merits. 9.1 The applicant has posed following questions, seeking advance ruling: (a) Whether the applicant, a....
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....cant, and thereafter, sent to the approved job-worker/vendor's premises; the job-worker takes the 'Sponge Platinum' so received and then treats it with two major reagents and PTCP is obtained after such reaction; once 'Sponge Platinum' is processed with reagents and PTCP is obtained, such PTCP is sent to the applicant's premises by the job-worker, where it is used for further necessary chemical reactions/steps as required to obtain the requisite APIs (i.e. Carboplatin and Oxaliplatin); the sponge Platinum imported by the applicant is classified under Customs Tariff Heading 7110 of the First Schedule to the Customs Tariff Act, 1975 specifically under Customs Tariff Item 71101120 as Platinum, in powder form; whereas, the APIs manufactured by using 'Sponge Platinum' are classified under CTH 28439019 as inorganic or organic compounds of precious metals; the classification of either 'Sponge Platinum' or the APIs has never been disputed/questioned by Customs. 9.4 I have observed that the applicant has emphasised on rule 6 and rule 7 of IGCR, 2022. The applicant has also stated that the language employed by both the above provisions makes it abso....
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....rtisans and the like; the exclusion cannot apply to players such as the applicant, which intends to use precious metal ('Sponge Platinum') for manufacture of oncology related drug formulations. The definition of 'job work' under rule 3 (1) (g) of IGCR, 2022, and exclusion of goods made thereunder are not based on the end-use of the goods which belong to the importer and sent to the job worker for treatment, process or manufacture. Moreover, interpretation by use of words other than the words used in the statute, is unwarranted and not legally maintainable. 9.7 As regards the principle of "noscitura a sociis", the applicant has inter-alia stated that the principle is that when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense; they take, as it were, their colour from each other, that is, the more general is restricted to a sense analogous to the less general; associated words take their meaning from one another under this principle, according to which, the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it. In this regard, it app....