Classification of Tyre Pyrolysis Oil & Recovered Carbon Black under India-Sri Lanka FTA

The ruling classified Tyre Pyrolysis Oil (TPO) under sub-heading 2710 19 90 and Recovered Carbon Black under sub-heading 2803 00 10. Both items were found not to be in the negative list of the India-Sri Lanka Free Trade Agreement (ISFTA) and are exempted from basic customs duty under ISFTA. However, no ruling was provided on the free trade status of the goods.

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Issues Involved:
1. Classification of Tyre Pyrolysis Oil (TPO) and Recovered Carbon Black.
2. Inclusion of TPO and Recovered Carbon Black in the negative list of the India-Sri Lanka Free Trade Agreement (ISFTA).
3. Exemption from customs duty and free trade status of TPO and Recovered Carbon Black.

Issue-wise Detailed Analysis:

1. Classification of Tyre Pyrolysis Oil (TPO) and Recovered Carbon Black:

The applicant, M/s. Pairan Pyrolysis Pvt. Ltd., sought advance rulings on the classification of TPO and recovered carbon black. The TPO is a dark, viscous liquid with high density, high viscosity, and high calorific value, used predominantly as industrial liquid fuel oil. The recovered carbon black is used as solid industrial fuel in cement kilns.

The ruling determined that TPO does not fit under Heading 3826 as biodiesel due to differences in the production process and source material. Instead, TPO is classified under Heading 2710, which covers oils obtained by processes such as cracking. Specifically, TPO is classified under sub-heading 2710 19 90 as it is an oil other than crude oil, used as industrial liquid fuel oil.

For recovered carbon black, the ruling noted it is a finely divided form of amorphous carbon, obtained through pyrolysis, and not a natural carbon in the form of solid fuel. Therefore, it merits classification under sub-heading 2803 00 10, which covers carbon black.

2. Inclusion in the Negative List of ISFTA:

The ruling referred to Annex 2 of the ISFTA, which contains India's negative list. It was determined that items under sub-headings 2710 19 90 (TPO) and 2803 00 10 (recovered carbon black) are not included in India's negative list under the ISFTA.

3. Exemption from Customs Duty and Free Trade Status:

Regarding customs duty exemption, Notification No. 26/2000-Cus., dated 1-3-2000, specifies that both TPO and recovered carbon black are exempted from basic customs duty under ISFTA, subject to the conditions specified in the notification and other applicable laws.

However, the issue of free trade (importability) was deemed beyond the scope of advance rulings as per Section 28H of the Customs Act, 1962, which lists the issues on which advance rulings can be sought. Therefore, no ruling was pronounced on the free trade status.

Conclusion:

The ruling classified TPO under sub-heading 2710 19 90 and recovered carbon black under sub-heading 2803 00 10. Both items are not in the negative list of ISFTA and are exempted from basic customs duty under ISFTA. No advance ruling was provided on the free trade status of the goods.

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