TaxTMI 
TaxTMI 
2026 (7) TMI 263
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.... with applicable Social Welfare Surcharge (SWS) and Integrated Goods and Services Tax (IGST) at the concessional rate by availing the benefit under Sl. No. 1180 of IGST Notification No.01/2017-Integrated Tax (Rate) dated 30.06.2017. 2. According to the Appellant, the imported test kits are Enzyme-Linked Fluorescent Assay (ELFA) kits, which are the same as Enzyme-Linked Immunosorbent Assay (ELISA kits, and therefore they had rightly claimed exemption under Sl. No. 166(A) read with List 3 of Notification No. 50/2017Cus. dated 30.06.2017, wherein a concessional rate of duty is provided to Enzyme-Linked Immunosorbent Assay (ELISA) kits. Based on specific intelligence gathered by the officers of the Special Intelligence and Investigation Branch (SIIB), Customs House, Chennai regarding the alleged misdeclaration of the goods imported in Container No. SEGU 9709022 covered under Bill of Entry No. 8953535 dated 03.06.2022, an investigation was initiated. Upon scrutiny of the import documents, namely Invoice No. 2150006664 dated 28.04.2022 issued by the supplier M/s. Biomerieux, Singapore, it was observed that the goods consisted of different types of test kits bearing different names, su....
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....6. Shri V. Lakshmi Kumaran, Learned Advocate arguing for the Appellant, contended that the subject goods fundamentally operate on the principle of ELISA (Enzyme Linked Immunosorbent Assay) and that ELFA is only a technologically advanced variant or subset of ELISA wherein fluorescence detection is employed instead of chromogenic colour detection. It was therefore contended that the goods remain covered within the scope of 'ELISA Kits' specified in the Exemption Notifications. Ld. Advocate also made elaborate contentions, which are summarized below: * During the period from 07.02.2018 to 01.02.2022, the goods were classifiable under CTH 3002 and were eligible for exemption from Basic Customs Duty under Sl. No. 167(A) read with Sl. No. 32 of List 4 appended to Notification No. 50/2017-Cus. * Consequent to tariff changes, the goods were classified under CTH 3822 with effect from 02.02.2022 and for the subsequent period up to 31.12.2022 the goods continued to remain eligible for concessional assessment under SI. No. 166(A) read with Sl. No. 125 of List 3 to Notification No. 50/2017-Cus. Insofar as the Integrated Tax is concerned, it was submitted that throughout the e....
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....ntrations to guarantee that they fall within the levels of detection of the assay. Any excess sample is thereafter washed from the plate. In the next step, a detection antibody is added. This antibody is labelled with an enzyme, usually horseradish peroxidase or alkaline phosphatase. The detection antibody binds to any target antigen already bound to the plate. Finally, substrate is added to the plate. * ELISA assays are usually chromogenic using substrates such as Tetramethylbenzidine (TMB) or 2,2'-Azinobis [3-ethylbenzothiazoline-6-sulfonic acid]-diammonium salt (ABTS) using a reaction that converts the substrate into a coloured product which can be measured using a plate reader. * Based upon the above explanation, it was submitted that sandwich ELISA is a principle used for the detection of antigens present in a sample by development of colour. Proceeding further, he submitted that the subject goods, namely ELFA kits, also operate on the principles of sandwich ELISA. According to him, the only difference between ELISA and ELFA is that in the case of ELFA there is fluorescence instead of a colour change. * Instead of chromogenic substrates, a fluoro....
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....ic literature, it is submitted that the ELISA detection method uses different kinds of substrates such as Chromogenic, Chemi-fluorescent, and Chemiluminescent substrates to detect antigens in the samples and, therefore, the ELISA detection method is not limited only to detection of antigens through colour change using chromogenic substrates. It was therefore contended that merely because a fluorogenic substrate is used in ELFA kits, it cannot be stated that ELFA is not ELISA. ELFA kits operate on the ELISA principle with a fluorogenic substrate for detection. It was thus submitted that the Department's case that ELFA kits are a different technology from ELISA is incorrect and baseless. According to the Appellant, the terminology "ELFA" is used only to distinguish the usage of fluorescent detection instead of colour change. 10. Reference / Reliance was also placed upon the Letter dated 02.07.2015 issued by the National Institute of Biologicals (NIB) [page 401], to the Central Drugs Standard Control Organization (CDSCO) [page 402]; and the Letter dated 16.07.2015 issued by CDSCO to the Additional Commissioner of Customs (Import), New Delhi, wherein it was clarified that ELFA a....
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....atedly contended that ELISA kits and ELFA kits are one and the same, the Department had brought out material differences between the two technologies in the SCN. He would invite our attention to para 17 of the Order-in-Original wherein the Adjudicating Authority tabulated the distinctions between ELISA and ELFA in the following manner: ELFA ELISA Enzyme-Linked Immuno Absorbent Assay is used for detecting and measuring antigens or antibodies using chromogenic substrates. Enzyme-Linked Fluorescent Assay where the enzyme catalyzes a fluorescence and not a colour reaction. Uses chromogenic substrate such as p-nitrophenyl phosphate (PNPP) Uses a fluorogenic substrate such as 4-methylumbelliferyl phosphate (4MUP). Detects the development of colour on a solid phase Detects the development of fluorescence on a solid phase Substrate is chromogenic Substrate is fluorogenic Less sensitive Approximately 100 times more sensitive Longer window period Five days shorter than ELISA Based on the above distinctions, the core issue as to whether ELISA kits and ELFA kits were 'identical in all respects' so as to permit extension of exemption specifically ava....
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....as considered by the Adjudicating Authority regarding earlier assessments and decisions of the Commissioner of Customs, Delhi extending Exemption benefit to ELFA kits. On this aspect, he would rely on the findings in the Order-in-Original wherein the Original Authority has observed that though uniformity in assessment is desirable, the same does not forbid examination of each assessment independently in the facts and circumstances of the case. Accordingly, earlier decisions or assessments cannot perpetuate an incorrect interpretation merely on the principle of precedent; while such earlier decisions may have persuasive value, they would not bind the Original Authority unless supported by decisions of superior judicial forums. 17. He would then refer and distinguish the reliance placed by the Appellant on clarifications issued by the Ministry of Health & Family Welfare and CBIC Circular No. 10/2022 dated 25.07.2022 relating to Electro CLIA kits by holding that the issues involved therein were different and not comparable with the present dispute. 18. With regard to the legal principles governing interpretation of Exemption Notifications, it was contended that while classificat....
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....nnot be considered as 'ELISA kits' for the purpose of Notification No. 50/2017-Cus. and accordingly held that the importer was not entitled to the concessional rate of Basic Customs Duty and IGST. * On the issue of limitation, the Adjudicating Authority examined whether the ingredients necessary for invoking the extended period under Section 28 (4) of the Customs Act were satisfied. * The supplier invoices merely described the products as "VIDAS TEST KITS" of various types such as VIDAS T3, VIDAS HCG, VIDAS FT4 etc., whereas in the Bills of Entry the importer had declared the goods as 'ELISA kits'. The importer was fully aware that the imported goods worked on the ELFA principle and not the ELISA principle, as admitted in the statements recorded during investigation. It was further observed by the Adjudicating Authority that despite such knowledge, the importer deliberately declared the goods as 'ELISA kits' in the Bills of Entry for the purpose of availing exemption benefit under Notification No. 50/2017-Cus. and the corresponding IGST notification. * The Adjudicating Authority also relied upon the statement of the Customs Broker, M/s. Arrow Shipping, wh....
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....ered the submissions advanced by Shri V. Lakshmi Kumaran, learned Advocate for the Appellant and the arguments of Shri Anoop Singh, the learned Departmental Representative for the Revenue, the impugned Order-in-Original, the extensive technical literature placed on record and the judicial precedents relied upon by both sides during the course of arguments before us. 23. The principal issue arising for our consideration in the present Appeal is, 'whether the sixteen varieties of "VIDAS" Diagnostic Kits imported by the Appellant during the disputed period admittedly based on Enzyme-Linked Fluorescent Immunoassay ("ELFA") are eligible for exemption from BCD in terms of Sl.Nos.166 (A) and 167(A) of Notification No.50/2017-Cus. dated 30.06.2017 and corresponding concessional IGST entry under Notification No. 01/2017-Integrated Tax (Rate). The Revenue seeks to deny the exemption primarily on the ground that the exemption entries specifically refer to "ELISA Kits", whereas the imported products are "ELFA Kits", which according to the Department constitutes a distinct and separate diagnostic technology. Proceeding on such basis, the Adjudicating Authority has concluded that Exemption No....
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....ra 18 of the impugned Order-in-Original that ELFA is a 'much more sophisticated technology' and that the level of speed and accuracy differs remarkably. Once this finding is accepted, the inevitable consequence is that ELFA represents a technological advancement or evolution of ELISA methodology and not an altogether different scientific species. 28. In our considered opinion, therefore, exemption entries concerning scientific instruments, medical diagnostics and biotechnology products cannot be interpreted in a rigid, frozen or static manner divorced from technological advancement. Scientific methodologies evolve continuously while retaining their essential foundational principles. Law cannot be interpreted in a manner that fossilizes scientific understanding to the stage existing on the date when the Exemption Notification was originally drafted. 29. The Hon'ble Supreme Court in Collector of Central Excise Vs Lekhraj Jessumal & Sons [1996 (82) E.L.T. 162 (S.C.)] categorically recognized that interpretation of Tariff Entries and Exemption Notifications must keep pace with technological developments. Similar principles were reiterated recently, in Hewlett Packard India Sa....
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.... and the same. The said clarification was thereafter communicated by CDSCO to Customs authorities vide letter dated 16.07.2015. it is useful here, to reproduce the same : "File No. 29/Misc./4/2015-DC(31) Date: 16.07.2015 To Sh V.K. Gahlout, Additional Commissioner, Office of the Principal Commissioner of Customs (Import) New Custom House, Near IGI Airport, New Delhi-110 037. SUB : Clarification on diagnostic kits based on ELFA technique in view of exemption claimed by the importer considering said kits as ELISA - regarding. Sir, Please refer to your office letter no. 2091 dated 12.05.2015 and subsequent letter 3775 dated 12/06/2015 on the subject matter. In this connection, it is stated that matter has been taken up in consultation with NIB, Noida. It has been informed by the NIB that ELISA is a Enzyme-Linked Immunosorbent Assay and ELFA is a Enzyme-Linked Fluorescent Assay which means that ELISA & ELFA are one & the same. (A copy of the same is attached for ready reference). Yours faithfully, Sd/- (Aseem Sahu) Deputy Drugs Controller (I)" [emphasis added] 30. In ....
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....ny & Ors. [2018 (361) E.L.T. 577 (S.C.)] and the decision in Novopan India Ltd. Vs CCE [1994 Supp (3) SCC 606], to contend that exemption notifications must be interpreted strictly. 33. There can indeed be no dispute with the settled proposition that an Assessee claiming exemption must establish clear eligibility within the terms of the Notification. However, the principle of strict interpretation cannot be extended to justify a construction which ignores scientific realities or adopts an artificial distinction unsupported by technical evidence. The ratio of Dilip Kumar (supra) applies where genuine ambiguity exists regarding the scope or applicability of an exemption entry. 34. In the present case, upon cumulative consideration of the technical literature, expert clarifications issued by statutory Regulatory Authorities namely CDSCO and NIB, the scientific material placed on record and the admitted functional characteristics of the imported goods, we find no ambiguity whatsoever that ELFA technology is fundamentally rooted in, and operates upon, the ELISA principle itself. Merely because technological advancement has introduced fluorescence-based detection in place of conven....
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....on results in emergence of an altogether distinct diagnostic methodology outside the ELISA framework. Mere technological enhancement in the mode of detection cannot eclipse the foundational ELISA principle upon which the impugned kits admittedly operate. 36. We also find that the reliance placed upon CBIC Circular No.10/2022-Cus. dated 25.07.2022 issued in the context of CLIA and ECLIA diagnostic kits is apt. The said circular records that, based upon expert clarification furnished by the Ministry of Health & Family Welfare, ECLIA and CLIA operate on the same underlying principles notwithstanding differences in technological advancement or detection methodology. On the strength of such expert opinion, CBIC has clarified/advised the field formations to consider the clarification and make reasonable decision on the assessment of the CLIA and ECLIA kits. The underlying rationale of the said circular clearly supports the Appellant's case herein, namely that advancement or refinement in detection technology does not necessarily result in emergence of an altogether distinct diagnostic methodology when the foundational scientific principle continues to remain the same. 37. In th....