The assessee, Cepheid India Private Limited, is a member of the California-based Cepheid Group, a corporation. Its primary activity is trading test cartridges, re-agents, and molecular diagnostic testing equipment, which are used for disease diagnosis and sampling.
The case concerns the period between August 16, 2016, and April 20, 2021, when the assessee cleared consignments on final Bills of Entry. However, the declared value has been rejected under rule 12 and recalculated under rules 4, 5, and 9 of the 2007 Valuation Rules, and the BCD, CVD, and lower rate of IGST on HIV-VL Test Kits that the assessee sought under various Exemption Notifications have been refused.
According to the department’s submission, the testing kit is intended for the detection and measurement of HIV-1 viral RNA. To put it another way, the aforementioned test is a viral load test kit and is unable to identify HIV antibodies. Since viral load testing and antibody testing are two distinct tests, a testing technique not included in the notification cannot benefit from the notification.
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The appellant’s imported HIV-VL test kits would be exempt from BCD and CVD, and IGST would be due at the rate of 5% specified in List 1 of the IGST Rate Notification. Therefore, the contested order of June 30, 2022, which denied the appellant relief from BCD and CVD and 5% IGST, would have to be overturned.
As a result, the appellant’s re-estimation of the value of the commodities that were imported is set aside; nonetheless, the matter is sent back to the adjudicating authority to re-evaluate the value in light of the observations. According to the Tribunal, treating an HIV infection in the body requires more than just detecting the virus. Determining the best course of treatment requires constant monitoring of the HIV infection’s progression within the body. This is the reason why the use of virological, immunologic, and viral load test kits has become valuable.
The HIV-VL test kits are life-saving diagnostic tools for identifying and predicting the presence of the HIV virus in the human body, according to the bench. The Tribunal noted that limiting the spread of the HIV virus in India and supporting the high demand for reasonably priced healthcare were the public interest goals behind the provision of the exemption to HIV kits.
According to the two-member bench consisting of Justice Dilip Gupta(President) and P.V. Subba Rao (Technical Member), the HIV-VL test kits are “life-saving diagnostic kits” that are used to identify and assess the presence of the HIV virus in a human body.
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BCD and CVD benefits are deemed to be available to the appellant in accordance with the Notifications. The appellant’s payment of IGST at 5% is also justified by the Integrated Rate Notification. In addition, the recalculation of the imported goods’ value is overturned; however, the matter is returned to the adjudicating authority for a new order that complies with the law and takes into account the previously mentioned observations.
The bench noted that these kits are used for routine monitoring of the spread of HIV infection in the body since they are more sensitive and accurate than other methods of detecting the existence of HIV infection. Therefore, these kits are necessary for determining the HIV treatment plan and combating the HIV epidemic, which is the only reason for granting exemptions for life-saving medications and HIV diagnostic kits.
While allowing the appeal, the tribunal held that the HIV-VL test kits imported by the appellant would be entitled for exemption from BCD and CVD, and IGST would be payable @ 5% as provided for in List 1 of the IGST Rate Notification.