Ilishan Biotech (P) Ltd. Vs Principal Commissioner of Customs (CESTAT Delhi)
Conclusion: ELISA kits imported by assessee-company were not used in the evaluation of physical, biophysical or biochemical processes and states in animals and humans, and as a result, they were not diagnostic reagent/kits rather they were meant to be used for food testing and, therefore, did not fulfil the criteria to avail the benefit of expression as per the notification.
Held: Assessee was importing ‘ELISA Test Kits and Reagents for food testing’ and claimed exemption under Notification No.12/2012-Cus dated 17.03.2012, subsequently under Notification No.50/2017-Cus dated 30.06.2017. The goods imported were put under preventive check on 19.05.2020 by SIIB, Air Cargo Complex (Import), New Delhi on the allegation that the goods declared as “ELISA kits for diagnostic use‟ in Bills of Entry were actually ‘food testing kits’, and to ascertain the correct description/classification of the goods and their eligibility for exemption under Notification 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 2 BEs were seized and were later provisionally released on execution of bond with bank guarantee. Statement of Managing Director (MD) of assessee was recorded on 17.09.2020. Adjudicating Authority confirmed the differential duty demand against BEs for the period with interest dropped demand against BEs for the period from 11.05.2015 to 31.03.2018 as being time barred. Adjudicating Authority allowed redemption, imposed penalty under Section 112(a), dropped imposition of penalty under Section 114A, ordered enforcement of bank guarantee towards recovery of dues and imposed penalty on assessee’s Managing Director under Section 114AA. Assessee contended that food testing kits were covered under the definition of the term ‘diagnostic kits’ mentioned in the exemption notifications. The term ‘diagnostic’ was used from 12.06.2019 only. The invoices and contracts show that the goods were used for food testing. They had amplified the description as ‘Elisa Kits for diagnostic use only’ as they were used for diagnosis of adulteration of the Food. Assessee argued that the goods were not mis-declaring the description of the goods. Authority contended that as per HSN Explanatory Notes for CTH 3822, the Diagnostic reagents were used in the evaluation of physical, biophysical or biochemical processes and states in animals and humans that to for vitro purposes. Notification benefit was for “Diagnostic reagents”, which were any organic or inorganic compounds that were added to an analyte or biological specimen, like urine, blood sample, or biopsied human tissue to determine pathogenesis or abnormalities. On the other hand, authority contended that goods were for testing of food and not for diagnostic purposes of human beings (including animals). Main allegation was of importing goods “ELISA Test Kit for food testing” but declaring them as “ELISA Test Kit for diagnostic use only”. It was held that ELISA kits imported by assessee were not used in the evaluation of physical, biophysical or biochemical processes and states in animals and humans, and as a result, they were not diagnostic reagent/kits rather they were meant to be used for food testing and, therefore, did not fulfil the criteria to avail the benefit of expression as per the notification.
