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Case Law Details

Case Name : In re Illumina India Biotechnology Private Limited (CAAR Mumbai)
Appeal Number : Ruling No. CAAR/Mum/ARC/27/2024
Date of Judgement/Order : 22/02/2024
Related Assessment Year :

In re Illumina India Biotechnology Private Limited (CAAR Mumbai)

M/s. Illumina India Biotechnology Private Limited (having IEC No AAECI9143H and hereinafter referred to as ‘the applicant’, in short) filed an application (CAAR-1) for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR in short). The said application was received in the secretariat of the CAAR, Mumbai on 28.07.2023 along with its enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’ also). The applicant is seeking advance ruling on the classification of “Kits” referred as ‘the Products’ such as TruSeq Stranded mRNA, Nextera DNA CD Idx and NextSeq 1000/2000 reagent for imports through the Airport & Air Cargo Complex, Bangalore.

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:

Illumina India, which is a part of the Illumina group, is involved in the creation, manufacture and distribution of sequencing and array-based solutions for analysing genetic variation and function in various domains ranging from cancer research to agriculture. The Applicant is primarily engaged in import, distribution and sale of life science tools and integrated systems, reagents and DNA sequencing instruments. The key details such as general description, form, end usage and technical description of the Products as submitted by the applicant are discussed below.

TruSeq Stranded mRNA (`TruSeq’) with Illumina part no. 20020594 is a library preparation kit that comprises of: (A) reagents; and (B) buffers. These library preparations are essentially standard molecular biological reactions used for preparing sample materials for sequencing. The reagents present in the kit are used to break the external layer of the cell to extract messenger ribonucleic acid (`mRNA’) and Ribonucleic acid (`RNA’). Thereafter, mRNA and RNA are fragmented to prepare samples using the reagents. Subsequently, specialized adapters are added to both ends of the fragmented RNA/ mRNA to make the sample suitable for subsequent cluster generation and sequencing. Accordingly, the reagents play a key role in generating cluster RNA sequencing and thus, give TruSeq its essential character.

Nextera DNA CD Idx with Illumina part no. 20018708 is an index kit which comprises of an index plate with wells holding reagent containing Oligonucleotides compounds, and buffer solutions, which is present in a liquid state. The Index kit is used for whole-genome sequencing applications of DNA extracted from genetic materials. The Index kit can be used for extracting DNA amongst variety of species such as humans, rats, plant, bacteria, etc. In the DNA sequencing workflow, Index kit comes into the picture in cases where multiple samples are required to be prepared post library preparation. The Index kit allows multiple libraries to be pooled together and sequenced in the same run wherein, unique index sequences, or identifier are added to each library. Thus, the Index kit adds unique index to the samples during library preparation process to allow the instrument to read multiple samples. In the process of adding unique index to the sample, a reaction takes place between the Index kit and the samples. This reaction attributes the character of a reagent to the Index kit and plays a key role in its functioning. Thus, the essential character of the Index kit is that of a reagent.

NextSeq 1000/2000 reagent kit (`NextSeq reagent’) with Illumina part no. 20046811 contains (A) reagent in liquid state stored in cartridge (B) flow cell; and (C) resuspension buffer. An image of the various constituents of the kit is enclosed by the applicant below for easy reference.

(A) reagent in liquid state stored in cartridge and (B) flow cell (C) Resuspension Buffer

liquid state stored in cartridge and (B) flow cell(C) Resuspension Buffer 

Post completion of the library preparation and indexing process, the NextSeq reagents are used for adding dye/ markers to the samples. The dye adds different colours to the samples. The different colours so added help in identification of the different profiles of the DNA or RNA in the resultant output of the sequencing process. Accordingly, the reagents play a key role in adding dye to the samples which helps in identification of different segments of the DNA and RNA strands used for generating sequencing data. Thus, the reagent gives the essential character to the kit.

Some of the common characteristics present in the Products which may potentially have a bearing on the classification are:

i. The Products are meant for laboratory research use and not for diagnostic purposes;

ii. They are presented in the form of kits;

iii. They are prepared laboratory reagents having no backing in the form of plastic, paper or other material impregnated or coated with reagent;

iv. They are meant solely for in vitro

On reviewing the classification of the Products, the Applicant is of the view that tariff item 3822 1990 of the First Schedule of the Customs Tariff Act, 1975 (`CTA’) would be most appropriate for the products.

3. The applicant further submits that the Products are kits which are used for the purpose of library preparation, indexing and adding dyes to the samples to study the different profiles of the RNA/ DNA strands.

The reagents carry out the following functions in the Product:

a. TruSeq — reagent is used for preparing samples such that they can be used for sequencing mRNA / RNA

b. Index kit — reagent is used for pooling multiple libraries so that multiple samples can be processed for sequencing

c. NextSeq reagents — reagent is used for adding dye/ marker to the samples for creating different profiles of RNA/ DNA strands

Accordingly, the reagents present in each of the kits play a critical role in the functioning of the Products providing essential character to the Products. Based on the nature, characteristics and functionality of the Products, CTH 3822 merits consideration to determine the appropriate classification of the Products:

CTII Description of goods
3822 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

The applicant has submitted in their understanding General Rules for the Interpretation of Import Tariff (`GRI’) and Relevant WCO Explanatory Notes

In terms of Rule 3(b) of GRI mixtures or composite goods consisting of different materials/ components, put up in sets for retail sale, are classifiable basis the material/ component which gives the goods their essential character. Further, in terms of Rule 1 of GRI classification is inter alia to be determined according to the terms of the headings for legal purposes. As discussed previously, the Products are kits which derive their essential character from the reagents present therein. Accordingly, on combined application of Rule 3(b) read with Rule 1 of the GM, the Products appear to come within the scope of CTH 3822.

In terms of Explanatory Notes to Heading 3822, items are required to fulfil certain parameters listed in the below table, in order to be classified therein. In this regard, we have discussed how the various parameters are satisfied in the case of the Products in the below table:

# Parameter TruSeq Stranded mRNA Nextera DNA CD Idx NextSeq

1000/2000 Reagents

1. End use — diagnostic/ laboratory Laboratory
reagent
Laboratory reagent Laboratory
reagent
2. Prepared or on backing Prepared reagents Prepared reagents Prepared
reagents
 3. In vitro application Yes Yes Yes
4. Mixture of reagents / single reagent dissolved in solvent Mixture of multiple reagents, dissolved in a solvent Mixture of multiple reagents, dissolved in a solvent Mixture of
multiple
reagents,
dissolved in a
solvent
5. Form – paper, plastics or other materials impregnated/ coated
with reagents or kit
Kit Kit Kit
6. Usage clearly identifiable from packaging and labelling For Research Use Only. Not for use in diagnostic procedure For Research Use Only. Not for use in diagnostic procedures For Research Use Only. Not for use in diagnostic procedures

Labels of the Products evidencing use thereof for research purpose is enclosed below for reference on sample basis:

Products evidencing use thereof for research purpose

research purpose is enclosed below for reference on sample basis

In view of above, it is evident that the Products meets all the parameters prescribed in the Explanatory Notes to Heading 3822 for coverage under said Heading. The Products do not find any specific mention in the Sub-Headings listed under CTII 3822. Therefore, it is pertinent to examine coverage of the Products under the Sub-Heading 3822 19 or 3822 90. Sub-Heading 3822 19 covers within its ambit prepared diagnostic or laboratory reagent whether or not on a backing, put up in the form of kits, other than those meant for malaria, zika and other diseases transmitted by mosquitoes of the genus aedes and blood-grouping. On the other hand, Sub-Heading 3822 90 covers certified reference materials and other such similar items. In terms of Chapter Note 2(A) to Chapter 38 of the First Schedule, certified reference material means a reference material accompanied by certificate indicating values of the certified properties, methods used to determine these values and the degree of certainty associated with such values, suitable for analytical, calibrating or referencing purposes.

In terms of Rule 6 of GRI classification in a Sub-Heading should be basis the terms of such Sub-Heading and related notes. As discussed above, the Products are laboratory prepared reagents presented in liquid state with no backing of paper, plastic or other material impregnated or coated with reagent, meant for research purposes and presented in kit. Such items seem to be specifically covered under the Sub-Heading 3822 19. In terms of Rule 3(a) of the GRI, the heading which provides the most specific description shall be preferred to headings providing a more general description. Basis Rule 3(a) of the GRI, since the Products are specifically covered under the Sub-Heading 3822 19, they will not be classified under Sub-Heading 3822 90 which is a residuary entry. In this regard, the Applicant places reliance on the decisions of the Hon’ble Supreme Court in Moorco (India) Ltd. v. Collector of Customs [1994 Supp (3) SCC 562] and Commissioner of Central Excise, Nagpur v. Shree Baidyanath Ayurved Bhawan Ltd. [(2009)12SCC419] wherein the settled principle of specific over general has been upheld.

Further, Sub-Heading 3822 19 covers two tariff items within its ambit, i.e., 38221910 and 38221990. Tariff item 38221910 corresponds to pregnancy test kits. Basis the product details discussed in preceding paragraphs, the Products are not covered under the tariff item 3822 1910 since these kits are not meant for pregnancy testing. Thus, the Products are classifiable under the residuary entry of Sub-Heading 3822 19 i.e., Tariff Item 3822 1990.

The Applicant places reliance on following rulings by the Hon’ble US Customs and Border Protection (`CBP’) authority discussing classification of items similar to the Products:

Ruling Product under consideration Classification
upheld
NY K82289 dated 15 January 2004 Kit used for carrying out DNA sequencing reactions using microliter-scale handling equipment and protocols 3822.00.5090
NO19762  dated 10 December 2007 Reagent kit used for DNA replication 3822.00.5090
NY E87869 dated 17 February 2000 Product comprising of reagents (put up dissolved in an aqueous mixed buffer solution) used for laboratory research for the detection and analysis of human, mouse, or rat mRNA 3822.00.5090

It is pertinent to mention that Tariff Item 3822 0050 90 of the Haunonized Tariff Schedule of the United States (prior to HSN 2022 amendment) corresponds to the tariff item 3822 1990 of the First Schedule. Further, the Applicant also places reliance on the decision of the European Binding Tariff Information under GB122466392, wherein goods similar to the Products of the Applicant were held to be classifiable under Combined Nomenclature (‘CN’) code 38220000. CN code 38220000, post HSN 2022 amendment, is read as CN code 38221900 which is aligned to the Sub-Heading 3822 19 of the First Schedule.

Though the Applicant has substantiated above that the Products merit classification under tariff item 3822 1990, classification under Sub-Heading 3822 90 is being discussed from a completeness perspective. In view of product details, the Products do not possess the characteristics of a certified reference materials in terms of Chapter Note 2(A) to Chapter 38, or any other similar item. Also, it is pertinent to mention that prior to 2022 amendment of the First Schedule there was no specific entry for certified reference materials. Reagents for medical diagnosis not covered specifically in any of the tariff entries were covered under the tariff item 3822 0019 and rest all the items that were not meant for medical diagnosis were covered under tariff item 3822 0090J-Iowever, post 2022 amendment, there is no specific call out for reagents meant for medical diagnosis. Rather, there are specific tariff entries for reagent kits meant for certain diseases, blood grouping and pregnancy test. All other prepared diagnostic or laboratory reagent are covered under residuary tariff item 3822 1990. Whereas the certified reference materials are specifically covered under tariff item 3822 9010 and other similar items are covered under the tariff item 3822 9090. In view of above, since the Products are not certified reference materials or similar item, they do not merit classification under Sub-Heading 3822 90.

4. The Jurisdictional Commissionerate in their comments to the above application submitted the follows:

To the extent of Section 28E(c) of Customs Act, 1962 wherein an applicant seeking advance rulings has been defined, it is felt that the admissibility of the Application for Advance Ruling filed by M/s Ilumina India biotechnology Private limited is acceptable. The applicant holds a valid IEC no. AACEI9143H. It is to confirm that as per the available records in the Commissionerate with respect to M/s Ilumina India Biotechnology Private limited, there is no other pending application raising this question and the same is observed to have not been decided by any court. The Jurisdictional Commissionerate has recommended CTI-I in the instant application as follows:

  •  TruSeq Stranded mRNA – 3822 1990
  • Nextera DNA CD Idx – 3822 1990
  • NextSeq 1000/2000 Reagents – 3822 1990

Further under sub-heading No. 9802 0000 all Lab Chemicals, Organic/Inorganic, whether or not chemically defined, imported in packings not exceeding 500 gms or 500 ml, are classifiable under CTII 98020000).

5. A personal hearing in the matter was conducted on 16.01.2024 in the office of CAAR, Mumbai. The authorised representatives of M/s. Illumina India Biotechnology Private Limited, Shri Himanshu Tewari and Ms. Deepika Menon appeared for Personal hearing and they reiterated the submission and explained the content of their application. They also cited some international rulings/clarification on this product. They contended that their products are laboratory reagent kits to be used in DNA sequencing instruments and expressed that their products “Truseq Stranded mRNA, Nextera DNA CD Idx and NextSeq 1000/2000 reagents merit classification under CTH 38221990 and the same is in accordance with WCO explanatory notes 1.8 (page 37 A-II).

They further submitted that the product in question is prepared reagent for research, for in vitro use, and is to be put up in the form of kit. They also filed additional supporting documents regarding product classification/clarification referred in WCO analysis. Nobody appeared for PH from the department side physically or through e-hearing module.

The content of their WCO analysis is reproduced as follows:

Present HSN 2022 amendment

**3822 

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– 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:
3822 11 00 For malaria kg. 10%
3822 12 00 For Zika and other diseases transmitted by mosquitoes of the genus Aedes kg. 10%
3822 13 00 For blood-grouping kg. 10%
3822 19 Other:
3822 19 10 —    Pregnancy test kit kg. 10%
3822 19 90 —    Other kg. 10%
3822 90 –        Other:
3822 90 10 —    Certified reference materials kt. 30%
3822 90 90 —    Other kg. 30%

Past Heading 3822 before 01.05.2022

3822 DIAGNOSTIC OR LABORATORY REAGENTS ON A BACKING, PREPARED DIACNOSTIC7 OR LABORATORY REAGENTS WHETHER OR NOT ON A BACKING, OTHER THAN THOSE OF HEADING 3002 OR 3006;

CERTIFIED REFERENCE MATERIALS :

3822 00 Diagnostic or laboratory reagents on a backing, prepared diagnostic or laboratory reagents whether or not on a backing, other than those of heading 3002 or 3006; certified reference materials :
For medical diagnosis :
3822 00 11 Pregnancy confirmation reagents kg. 10%
3822 00 12 Reagents for diagnosing AIDS kg. 10%
3822 00 19 Other kg. 10%
3822 00 90 Other kg. *30%

Notes to Chapter 38:

1. This Chapter does not cover:

(a) separate chemically defined elements or compounds with the exception of the following:

(1) artificial graphite (heading 3801);

(2) insecticides, rodenticides, fungicides, herbicides, anti-sprouting pro-ducts and plant-growth regulators, disinfectants and similar products, put up as described in heading 3808;

(3) products put up as charges for fire-extinguishers or put up in fire-extinguishing grenades (heading 3813);

(4) certified reference materials specified in Note 2 below;

(5) products specified in Note 3 (a) or 3 (c) below;

…..

2. (A) For the purpose of heading 3822, the expression “certified reference materials” means reference materials which are accompanied by a certificate which indicates the values of the certified properties, the methods used to determine these values and the degree of certainty associated with each value and which are suitable for analytical, calibrating or referencing purposes.

(B) With the exception of the products of Chapter 28 or 29, for the classification of certified reference materials, heading 3822 shall take precedence over any other heading in the Schedule.

WCO HSN Explanatory Notes to Heading 3822,

This heading covers 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, including blood grouping reagents, other than diagnostic reagents designed to be administered to the patient 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 function is based upon a measurable or observable change in the biological or chemical substances constituting the reagent. Prepared diagnostic reagents of this heading may be similar in function to those designed to be administered to patients (subheading 3006.30), with the exception that they are used for in vitro, 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.

Reagents of this heading are either on a backing or in the form of preparations and thus comprise more than a single constituent. For example, they may consist of admixtures of two or more reagents or of single reagents dissolved in solvents other than water. They may also be in the form of paper, plastics or other materials (used as backings or support), impregnated or coated with one or more diagnostic or laboratory reagents, such as litmus, pH or pole-finding papers or pre-coated immuno-assay plates. Reagents of this heading may also be put up in the form of kits, consisting of several components, even if one or more components are separate chemically defined compounds of Chapter 28 or Chapter 29, synthetic colouring matter of heading 32.04 or any other substance which, when presented separately, would be classifiable under another heading. Examples of such kits are those for testing glucose in, blood, ketones in urine, etc., and those based on enzymes.

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, 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.

However, diagnostic kits having the essential character of products of heading 30.06 (e.g., blinded (or double-blinded) clinical trial kits for a recognized clinical trial, put up in measured doses) are excluded.

With the exception of the products of Chapter 28 or 29, for the classification of certified reference materials, heading 38.22 shall take precedence over any other heading in the Nomenclature.

The certified reference materials of this heading are reference materials prepared for the calibration of an apparatus, the assessment of a measurement method or the assignment of values to a material. These reference materials may consist of the following:

(a) Substrate materials containing added analytes, the concentration of which has been accurately determined;

(b) Unmixed materials, the concentration of certain components of which has been accurately determined (e.g., the protein and fat content of milk powder);

(c) Materials, whether natural or synthetic, certain properties of which have been accurately determined (e.g., tensile strength, specific gravity).

These reference materials must be accompanied by a certificate which indicates the values of the certified properties, the methods used to determine the values and the degree of certainty associated with each value, and the certifying authority.

Heading 3006 — Pharmaceutical Goods Specified in Note 4 to this Chapter:

…..

3006 3000 – diagnostic reagents designed to be administered to the patient 10%

Note (1) to Chapter 30:

“1. This Chapter does not cover:

(ij) diagnostic reagents of heading 3822″

Note (4) to Chapter 30:

“4. Heading 3006 applies only to the following, which are to be classified in that heading and in no other heading of this Schedule

a) opacifying preparations for X-ray examinations and diagnostic reagents designed to be administered to the patient, being unmixed products put up in measured doses or products consisting of two or more ingredients which have been mixed together for such uses;

b) placebos and blinded (or double-blinded) clinical trial kits for use in recognized clinical trials, put up in measured doses, even if they might contain active medicaments; “

Tariff item 98020000:

9802 0000            Laboratory Chemicals           10%

Note (3) to Chapter 98:

“3. Heading 9802 covers all chemicals, organic or inorganic, whether or not chemically defined, imported in packings not exceeding 500 gms or 500 millilitres and which can be identified with reference to the purity, markings or other features to show them to be meant for use solely as laboratory chemicals”.

6. I have taken into consideration all the materials placed on record in respect of the subject goods including the submissions made by the applicant during the course of personal hearing. I have gone through the response received from the Airport and Air Cargo Complex, Bangalore Customs. I therefore proceed to decide the present applications regarding classification of “Truseq Stranded mRNA, Nextera DNA CD Idx and NextSeq 1000/2000 reagents” collectively referred to as ‘the Products’ on the basis of the information on record as well as the existing legal framework having bearing on the classification of the products in question under the first schedule of the Customs Tariff Act, 1975.

First and foremost, it is pertinent to mention that the concerned Jurisdictional Commissionerate i.e. Airport & Air Cargo Complex, Bengaluru has concurred with the contention of the applicant that “Truseq Stranded mRNA, Nextera DNA CD Idx and NextSeq 1000/2000 reagents” merit classification under CTI 3822 1990.

6.1  The applicant has stated that TruSeq Stranded mRNA (`TruSeq’) with Illumina part no. 20020594 is a library preparation kit that comprises of (A) reagents; and (B) buffers; that Nextera DNA CD Idx with Illumina part no. 20018708 is an index kit which comprises of an index plate with wells holding reagent containing Oligonucleotides compounds, and buffer solutions, which is present in a liquid state; and that NextSeq 1000/2000 reagent kit (`NextSeq reagent’) with Illumina part no. 20046811 contains (A) reagent in liquid state stored in cartridge (B) flow cell; and (C) resuspension buffer.

From these submissions of the applicant about the products, it is amply clear that all the three products in question contain reagents. Further, it is also observed that these products contain these reagents in liquid state. Also, the images/pictures of the Labels of the Products evidencing use thereof for research purpose is enclosed with the instant applicant for reference on sample basis by the applicant (reproduced in para 3 supra) and on these labels, it is clearly and prominently mentioned by the supplier that the said products are made in USA and are `for Research use only. Not for use in Diagnostic procedures”.

6.2 TruSeq Stranded mRNA (`TruSeq’) is a library preparation kit and these Library preparations are essentially standard molecular biological reactions used for preparing sample materials for sequencing. The reagents present in the kit are used to break the external layer of the cell to extract messenger ribonucleic acid (`mRNA’) and Ribonucleic acid (`RNA’). Thereafter, mRNA and RNA are fragmented to prepare samples using the reagents. Subsequently, specialized adapters are added to both ends of the fragmented RNA/ mRNA to make the sample suitable for subsequent cluster generation and sequencing. Accordingly, the reagents play a key role in generating cluster RNA sequencing and thus, give TruSeq its essential character. This reaction attributes the character of a reagent to the Index kit and plays a key role in its functioning. Thus, the essential character of the Index kit is that of a reagent.

In the process of adding unique index to the sample, a reaction takes place between the Index kit and the samples. This reaction attributes the character of a reagent to the Index kit and plays a key role in its functioning. Thus, the essential character of the Index kit is that of a reagent. The reagents play a key role in adding dye to the samples which helps in identification of different segments of the DNA and RNA strands used for generating sequencing data. Thus, the reagent gives the essential character to the NextSeq 1000/2000 reagent kit.

From these submissions of the applicant, it is amply clear that the essential character of the Kits proposed to be imported are reagents and these reagents play a key role in their functioning, moreover, NextSeq 1000/2000 reagent kit itself reveals by its name that it is a kit based on the reagents.

6.3 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. 01., 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). General Interpretation Rule 3: Where any article is classifiable under two or more headings —

(a) In case of where an article is classifiable under two or more headings, the article should be classified under specific heading instead of general heading.

(b) Mixture, composite goods consisting of different materials or made up of different components cannot be classified by referring rule 3(a). However, it should be classified as if it consists of the material or component which gives them their essential character.

In view of the above, to answer the question of classification of the products under consideration asked by the applicant, provisions of the relevant Section or Chapter Notes and Sub-Notes or explanatory notes are to be interpreted considering that the products comprise “Reagent” which gives essential character to the products. Sections and Chapter Notes have been given statutory backing and have been incorporated at the top of each Section / Chapter. Further, from the plain reading of the images of labels provided by the applicant it is also clear that the products under consideration are for Research use only and not for use in diagnostic procedures.

7. Heading 3822 covers “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”. From plain reading of this heading it is amply clear that this heading inter alia covers “prepared diagnostic or laboratory reagents, other than those of heading 3006 and certified reference materials” As discussed above, the Products are prepared laboratory reagents presented in liquid state with no backing of paper, plastic or other material impregnated or coated with reagent, meant for research purposes and presented in kit. They are meant solely for in vitro application.

As per Note 2(A) to Chapter 38 of the First Schedule, certified reference material means a reference material accompanied by a certificate indicating values of the certified properties, the methods used to determine these values and the degree of certainty associated with each value, suitable for analytical, calibrating or referencing purposes. The products under consideration here are solely for research purpose only. In view of product details, it is observed that the Products do not possess the characteristics of a certified reference materials. There are specific tariff entries for reagent kits meant for certain diseases viz. malaria and zika, blood grouping and pregnancy test. All other prepared diagnostic or laboratory reagent are covered under residuary tariff item 3822 1990. Whereas the certified reference materials are specifically covered under tariff item 3822 9010 and other similar items are covered under the tariff item 3822 9090. The Products in question are not certified reference materials or similar item, they do not merit classification under Sub-Heading 3822 90.

Further, it is to be examined whether these products satisfy the condition of being other than those of heading 3006 or not. Heading 3006 covers pharmaceutical goods specified in chapter note 4 to chapter 30. Note 4 to chapter 30 states that Heading 3006 inter alia applies only to the following, which are to be classified in that heading and in no other heading of this Schedule: opaci&ing preparations for X-ray examinations and diagnostic reagents designed to be administered to the patient, being unmixed products put up in measured doses or products consisting of two or more ingredients which have been mixed together for such uses. Firstly, the product under consideration here are prepared laboratory reagents not opacifying preparation for X-ray examination and secondly, from the submissions of the applicant it is observed that these reagents are not designed to be administered to the patients and these reagents are for research use only and are meant solely for in vitro application.

Further, Note 4 to chapter 30 states that Heading 3006 inter alia applies only to the following, which are to be classified in that heading and in no other heading of this Schedule: placebos and blinded (or double-blinded) clinical trial kits for use in recognised clinical trials, put up in measured doses, even if they might contain active medicaments.

The applicant has clarified as to the use of the products in question that these products are for use in research only. Blinding on a clinical trial is when a patient does not know what particular treatment they are on. In double blinded trials the patient and the physician do not know what trial drug the patient will have received. It is amply clear that these products are not for blinded or double blinded clinical trial kits and also these are not placebos.

Relevant portion of the explanatory notes to heading 3006 is reproduced as under:

5. Opacifying preparations for X-ray examinations and diagnostic reagents designed to be administered to the patient, being unmixed products put up in measured doses or products consisting of two or more ingredients which have been mixed together for such uses.

The opacifying preparations are used in X-ray examination of internal organs, arteries, veins, urinary passages, bile duct, etc. They are based on barium sulpLate or other substances opaque to X-rays and may be put up for injection or for oral administration (e c barium pleat

The diagnostic reagents (including microbial diagnostic reagents) covered by the heading arc those administered by ingestion, injection, et&;,

Diagnostic reagents not designed to be administered to the patient (e.g., those for carrying out tests on blood, urine, etc., samples taken from a patient or for use as laboratory reagents) arc excluded; they fall in the headings appropriate to the iiiatC1 talc of which they are wade (e.g., Chapter 28, Chapter 29 or heading 30.02 or 38.22).

(12) Placebos.

The placebos under this heading are designed to mimic a medicament in appearance, and are for use in recognized clinical trials. A placebo is generally a pharmaceutically inert product that typically consists of the ingredients employed in the drug product under study minus the active ingredient. The placebos of this heading also include vaccines which are used as control substances and that have been licensed for use in recognized clinical trials. Placebos would come in a variety of forms including, but not limited to, tablets, liquids. injections and patches. The ingredients (excipients) employed in a drug product must be generally regarded as safe for use in humans, otherwise they could not be employed.

(13) Blinded (or double-blinded) clinical trial kits.

Blinded (or double-blinded) clinical trial kits are for the sole purpose of blinded medical trials arid contain either the trial medicaments, the corresponding placebos or both and are designed to anonymize the medicament. For new pharmaceutical trials, a randomized double-blind design is normally used. Information regarding the exact content of any given double-blinded kit i.e., whether it contains the active drug product or placebo or both, does not accompany the kit, and is not available for Customs purposes.

The kits may contain any item or packaging which is necessary solely for the safe transport or storage of the goods, for example, temperature recorders, tamper detectors or coolant pads and any associated and necessary documentation and forms whether in hard copy or electronic form.

Placebos or blinded (or double-blinded) clinical trial kits of this heading are put up in measured doses for use in recognised clinical trials.

Clinical trials arc intended for human or animal drug trials, where the investigative products arc the pharmaceutical forms of an active ingredient being tested or placebos used as a reference in the clinical trial. Active ingredients to be trialled can include iherbal medicinal products for therapeutic or prophylactic uses.

Clinical trials kits arc taken as recognised when they have fulfilled all relevant regulatory requirements in the country of import for the lawful import of such investigative products for use in the clinical trial.

Those “placebos” and “blinded (or double-blinded) clinical trial kits” products which are not for a clinical trial that has fulfilled the relevant regulatory requirements for the import of substances, should be classified respectively in other headings (e.g., headings 17.04, 21.06, etc.) based on their different composition and forms.

8. Further, relevant portion of the explanatory notes to heading 3822 is reproduced as under:

Diagnostic reagents are used in the evaluation of physical, biophysical or biochemical processes and states in animals and humans; their function is based upon a measurable or observable change in the biological or chemical substances constituting the reagent. Prepared diagnostic reagents of this heading may be similar in function to those designed to be administered to patients (subheading 3006.30), with the exception that they arc used for in vitro, 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 le used in medical, veterinary, scientific or industrial laboratories, in hospitals, in industry, in the field or, in some cases, in the home.

Reagents of this heading are either on a backing or in the form of preparations and thus comprise more than a single constituent. For exam )le, they may consist of  admixtures of two or more reagents or of single reagents dissolved in solvents other than water. They. may also be in the torn of paper, plastics or other materials (used as backings or support), impregnated or coated with one or more diagnostic or laboratory reagents, such as litmus, p11 or pole-finding papers or pre-coated immuno-assay plates. Reagents of this heading may also be put up in the form of kits, consisting of several components, even if one or more components are separate chemically defined compounds of Chapter 28 or Chapter 29, synthetic colouring matter of heading 32.04 or any other substance which, when presented separately, would be classifiable under another heading. Examples of such kits are those for testing glucose in blood, ketones in urine, etc., and those based on enzymes.

The reagents of this heading should be clearly identifiable as being tor 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, 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.

However, diagnostic kits having the essential character of products of heading 30.06 (e.g., blinded (or double-blinded) clinical trial kits for a recognized clinical trial, put up in measured doses) are excluded.

The applicant has explained in the table in para 3 supra that the products under consideration satisfy above mentioned all the conditions of explanatory notes to heading 3822. The products are prepared laboratory reagents used for research purposes and other than detection or diagnosis. The products having essential character of reagents not on backing but they are prepared for in vitro use and these are put up in the form of kits for use in research only which is also clear from the above shown labels.

9. On the basis of foregoing discussions and findings, I rule that the products in question i.e. “TruSeq Stranded mRNA, Nextera DNA CD Idx and NextSeq 1000/2000 reagent” merit classification under CTII 3822, more specifically under CTI 3822 1990 of the First Schedule to the Customs Tariff Act, 1975.

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