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TMI Blog2024 (11) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine the classification of goods and in order to determine the true scope of the tariff heading, the relevant Explanatory Notes of HSN pertaining to CTH 3822 as says such reagents are used in the evaluation of physical, biological or biochemical processes and states in animals and humans, of the nature of prepared diagnostic reagents that are to be administered to patients in vivo applications. In other words, the reagents or kits which are for the purpose other than for diagnostic purposes on human and animals are not covered within the meaning of diagnostic kits or diagnostic reagents on a backing, i.e, kits. The contention of appellant that the diagnostic purpose can be for food testing also is unsustainable in the context of the exemption notification which has to be construed and interpreted in the light of the words/expressions used therein. Referring to the various decisions of the Supreme Court, the learned Authorised Representative reiterated the principle that the exemption notification has to be construed strictly and therefore, no benefit can be granted to the appellant under the exemption notifications as they do not fulfil the criteria specified therein. Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No. 50/2017-Cus. (Entries 167 249A) read with S.No. 32 of List 4 of the notification, and applicability of the IGST under Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017 (Entry 180 of Schedule I Entry 80 of Schedule-II). Goods imported under the aforesaid 2 BEs were seized on 19.05.2020 and were later provisionally released on execution of bond with bank guarantee of Rs.22,33,000/-. Statement of Shri Ashish Bhandari, Managing Director ( MD ) of the appellant was recorded on 17.09.2020. 2.2 Show cause notice dated 29.09.2020 was issued covering the period from 08.05.2015 to 16.08.2020 on the following allegations:- (a) that Entry 80 in Schedule II of Notification No. 1/2017-IT (R ) which prescribes 12% rate is applicable only to diagnostic kits and not reagents ; that the contention of there being 2 classes of goods all diagnostic kits and reagents is not acceptable ; that the word and is a word of conjunction and the word diagnostic applies to both kits and reagents, stating that the exemption is applicable only for diagnostic kits and diagnostic reagents; (b) that from June, 2019, the description of goods was changed by the Importer from ELISA Test Kits for foo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nostic is used from 12.06.2019 only; that the invoices and contracts show that the goods are used for food testing; that Bes 7610516 dated 07.05.2020 and 7615588 dated 08.05.2020 do not contain the goods description as diagnostic test kits reagents ; that they have amplified the description as Elisa Kits for diagnostic use only as they are used for diagnosis of adulteration of the Food. This is not mis-declaring the description of the goods; it is only the intended use of the goods. Claim of classification and claim of exemption is not mis-declaration of goods. 4.2 That the term diagnostic is not limited to treatment of diseased in human beings and animals; that explanatory notes for Chapter 38.22 state Prepared diagnostic reagents of this heading may be similar in functions to those designed to be administered to patients (sub-heading 3006.30) with the exception that they are used for in vitro rather that for in vivo ; that Elisa test kits are capable of being used to diagnose drug residue in foods prepared from animals also. The Customs Tariff under CTH 3822 has distinguished For medical diagnosis and other . This itself show that there is diagnosis which is non-medical as a sepa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diagnostic purposes of human beings (including animals). In fact, the appellant importer from June, 2019 changed the description of the goods as diagnostic test kits/reagents instead of ELISA test kits for food testing . 5.5 The Serial No. in the referred Notification mentions Lifesaving drugs/medicines specified in List 4 . The reagents and kits imported for food testing are not lifesaving and hence the benefit of notification has been rightly denied. 5.6 The learned Authorised Representative referred to the principle that exemption notifications are to be interpreted strictly and in this regard, the following case laws are relied upon :- 1. Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar Company 2018 (361) ELT 577 (SC) [30-07-2018]. 2. Commissioner of Central Excise , New Delhi Vs. Hari Chand Shri Gopal 2010 (260 ) ELT 3 (SC) [18-11-2020]. 3. Novopan India Ltd. Vs. Collector of Central Excise Customs, Hyderabad 1994 (73) ELT 769 (SC) [14.09.1994]. 4. Hemraj Gordhandas Vs. H.H. Dave, Asstt. Collector of Central Excise Customs 1978 (2) ELT J 350 (SC). 5.7 Reference was invited to the statement of Shri Ashish Bhandari, where he admitted that impugned goods are used for foo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notifications, the exemption is available only for the diagnostic test kits and reagents. 8. The admitted position is that the appellant is engaged in import of ELISA food testing kits and other food testing kits for couple of years. The appellant vide BE No.7610516 and 7615588 imported various types of food testing kits, the details thereof are as under:- (B.E.No.7615588 dated 08.05.2020) (B.E.No.7610516 dated 07.05.2020) SNo Description Description 1. Agrstrip Aflatoxin 13 C Fumonisins 2. Agrastrip Qualitative Soy Comb Bulk Grain-Traitchek 13 C Aflatoxin 3. Agraquant Nitrofurn (SEM) (96 wells) Aflatoxins 4. Agraquant Nitrofurn (AMOZ) plus Assay (96 wells) Rapidcheck Listeria Nextday Food 5. Agraquant Nitrofurn (AOZ) Plus Assay (96 wells) Agraquant Allergen-Gluten G12, 96 6. Agraquant Nitrofurn (AHD) Assay (96 wells) Agraquant allergen Histamine Rapid (48) 7. Agraquant Chloramphenicol (CAP) Plus Assay (96 wells) Aflastar R IAC (500) 8. Total in Agraquant Aflatoxin B1 Assay, 96 wells 9. Rapidcheck Listeria Nextday Food 10. Solar Sponge Stick with Letheen Broth 11. Agraquant Rur Soya Grain Plate Kit- 12. Total in 9. The aforesaid list of articles are actually the food testing kits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kits AgraQuant . Lateral flow devices AgraStrip and Rapidchek . Reference materials Biopure . Cleanup columns MycoSep, MultiSep,MycoSpin, StarLineTM . Sampling mills iv. Furthermore, we operate 4 accredited, full-service laboratories in Austria, UK. US and Singapore, using cutting-edge technology in the fields of chromatography and immunological analysis, our labs offer services for the analysis of mycotoxins, food allergens, meat speciation, VDR and GMO. v. Romer Labs offers the most complete portfolio of allergen test kits for the qualitative AgraStrip and quantitative AgraQuant analysis of food allergens. These tests can be used for different applications, and cover all steps in the food production process. The above information on the website, clearly connects M/s Romer as supplier of Food testing kits and reagents and, therefore, logically the conclusion is that the goods imported by the appellant were food testing kits. Even the literature produced by the appellant in that regard establishes that the kits imported were exclusively food testing kits only and were not meant for diagnosis purposes on human and animals. 13. Now we may consider whether the food testing kits impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the importer also knew that their goods do not fall within the purview of the Notification being food testing kits only. 14. Further, Serial No. 167 (A) with which we are concerned here, embraces not only the drugs or medicines, but also includes their salts and estors and diagnostics test kits as specified in List 4, which at Sl. No. 32 provides, Enzyme Linked Immuno absorbent Assay, ELISA KITS . Therefore, the adjudicating authority rightly interpreted that the expression Enzyme Linked Immuno absorbent Assay, ELISA KITS are preceded by the words in Serial No. 167(A), i e., life saving drugs, medicines, including their salts and estor and diagnostics test kits. In simple words the notification at Sl.No. 167 intends to exempt goods meant for medical purpose such as medicines/drugs and diagnosis kits. The term diagnosis kits cannot be read in a manner to include for food, testing which would be contrary to the main intendment of the notification. Consequently, the goods in question, ALISA Food Testing Kits which have been imported by the appellant not being for diagnostics use does not fall within the four corners of the exemption notification. 15. The List 4 referred to in Sl. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 patient and blood grouping reagents of heading 30.06. It also covers certified reference materials. Diagnostic reagents are used in the evaluation of physical, biophysical or biochemical processes and states in animals and humans; their functions based upon a measurable or observable change in the biological or chemical substances constituting the reagents. Prepared diagnostic reagents of this heading may be similar in function to those designed to be administered to patients (sub-heading 3006.30) with the exception that they are used for in vitra , rather than for in vivo, applications. Prepared laboratory reagents include not only diagnostic reagents but also other analytical reagents used for purposes other than detection or diagnosis. Prepared diagnostic and laboratory reagents may be used in medical, veterinary, scientific or industrial laboratories, in hospitals, in industry, in the field or, in some cases, in the home. 17.1 What appears from the above Notes is that such r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferring to the various decisions of the Supreme Court, the learned Authorised Representative reiterated the principle that the exemption notification has to be construed strictly and therefore, no benefit can be granted to the appellant under the exemption notifications as they do not fulfil the criteria specified therein. Without multiplying too many decisions, we would like to refer the conclusion drawn by the Constitution Bench of the Apex Court in the case of Dilip Kumar Company (supra), as under:- 52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled. Following the aforesaid principles, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the words on such reading, leads to ambiguity, vagueness, uncertainty, or absurdity which were not obviously intended by the legislature or the lawmaker, a court should open its interpretation toolkit containing the settled rules of construction and interpretation, to arrive at the true meaning of the provision. While using the tools of interpretation, the court should remember that it is not the author of the statute who is empowered to amend, substitute or delete, so as to change the structure and contents. A court as an interpreter cannot alter or amend the law. It can only interpret the provision, to make it meaningful and workable so as to achieve the legislative object, when there is vagueness, ambiguity or absurdity. The purpose of interpretation is not to make a provision what the Judge thinks it should be, but to make it what the legislature intended it to be. 21. The learned Counsel for the appellant has relied on the decision of this Tribunal in M.J. Pharmaceuticals (supra), however, we find that the said decision does not supports the case of the appellant. The issue was whether zinc insulin crystals and insulin beef seed suspension would be entitled to the benefit in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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