Imported corn silk extract powder tariff classification (Heading 1302 vs 2106) upheld as plant extract; exemption under Sr No. 54 allowed.

The dominant issue was tariff classification of imported corn silk extract powder as a plant extract under Heading 1302 or as a food preparation under Heading 2106. Applying the HSN Explanatory Notes and GRI 3(a), the AAR held that the product, being a single-plant solvent extract in bulk form without further purification or chemical modification and used as raw material, is specifically covered by Heading 1302; classification under residual Heading 2106 was rejected as it is not a formulated or dose-presented food preparation. Accordingly, it was classified under CTI 1302 19 19. The connected issue of exemption was decided by holding that Sr. No. 54 of N/N 50/2017-Cus applies to goods under CTSH 1302 19 and the product is not within the stated exclusions; exemption was allowed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether "Corn Silk Extract Powder", imported in bulk as 100% extract obtained by hot-water extraction and spray drying, is classifiable as a vegetable/plant extract under Heading 1302 (and specifically under tariff item 1302 19 19), or as a food preparation under Heading 2106.

(ii) If classifiable under tariff item 1302 19 19, whether the product is eligible for the concessional rate/exemption under Sr. No. 54 of Notification No. 50/2017-Cus., considering the notification's scope and stated exceptions.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Classification of "Corn Silk Extract Powder" (Heading 1302 vs 2106; and tariff item within Heading 1302)

Legal framework: The Court applied the General Rules for Interpretation, emphasising that classification is determined by the terms of headings and relevant Section/Chapter Notes. It examined the scope of Heading 1302 (vegetable saps and extracts) and Heading 2106 (residuary heading for food preparations not elsewhere specified or included), and considered Chapter Note 1 to Chapter 13 and the HSN Explanatory Notes for Heading 1302 as relied upon in the reasoning.

Interpretation and reasoning: The Court found, on the applicant's record, that the goods are a simple extract from a single plant source (styles/stigma of Zea mays), produced by solvent extraction using hot water, followed by evaporation and spray drying, with no addition of other substances and no further purification or additional extraction cycles. The Court held the goods are of plant/vegetable origin, are imported in bulk as a raw material for further manufacture, and remain in the form "as initially extracted." It further held that the Chapter Note 1 exclusions from Heading 1302 did not apply to the product on the established facts. In particular, although Chapter 13 notes exclude medicaments under Chapter 30, the Court held the product could not be treated as a Chapter 30 medicament because it was not "put up" in measured doses or retail packs for therapeutic/prophylactic purposes and was imported in bulk.

The Court rejected classification under Heading 2106 because Heading 2106 is residuary and covers formulated food preparations, whereas the subject goods were found to be a single-ingredient extract used as an input and not a finished preparation; therefore, Heading 1302, being the more specific description for such extracts, prevailed and classification under 2106 was ruled out.

Conclusions: The Court conclusively held that the goods fall under Heading 1302 as vegetable saps and extracts, and more precisely under CTI 1302 19 19 ("Other" extracts), as extracts of styles and stigma of the corn plant meeting the conditions of Heading 1302 on the record.

Issue (ii): Eligibility to exemption/concessional rate under Sr. No. 54 of Notification No. 50/2017-Cus.

Legal framework: The Court examined Sr. No. 54 of Notification No. 50/2017-Cus., which grants a 15% rate to "All goods" under specified tariff entries (including 1302 19), with stated exceptions (vegetable seeds and extracts of pyrethrum or of the roots of plants containing rotenone).

Interpretation and reasoning: Having classified the product under CTSH 1302 19 (specifically 1302 19 19), the Court compared the product against the notification's exceptions and found it was not covered by any of the excluded categories.

Conclusions: The Court held that "Corn Silk Extract Powder" classifiable under 1302 19 19 is eligible for the benefit under Sr. No. 54 of Notification No. 50/2017-Cus., attracting the concessional rate of 15% (subject to the notification as applied in the ruling).

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