2026 (1) TMI 582 - AAR - Customs

Classification of Co2 Sustain 2501 as an organic surface-active agent under Heading 3402 affirmed, subject to import testing

HSN Explanatory Notes and Chapter 34 Note 3 set objective criteria for classification as an organic surface-active agent: the product must form a stable ... Seeking advance ruling regarding classification of the product called 'Co2 Sustain 2501', which is a dispersion of Polysorbate 65 in water-a non- ionic surface-active agent - HSN Explanatory notes for heading 3402 - Whether the product falls under Heading 3402 or not as a Organic Surface-Active Agent, Chapter note 3 to Chapter 34 - HELD THAT:- HSN Explanatory notes for heading 3402 describes the Organic Surface-Active Agents as chemical compounds, not chemically defined, which contain one or more hydrophilic or hydrophobic functional groups and satisfies the conditions mentioned in the Note 3 to Chapter 34. It further clarifies that an emulsion should not be considered as having a stable character if, after being left to stand for one hour at 20°C, solid particles are visible to naked eye or it has separated into visually distinguishable phases or it has separated into a transparent part and a translucent part visible to the naked eye i.e. there should not be any visual separation of the emulsion visible to naked eye. We observe that for a product to be classified as an Organic Surface-Active Agent, it should produce a stable homogenised either transparent or translucent solution or emulsion when mixed with water at a concentration of 0.5% at 20℃ and it should not have any visual separation visible to naked eye when allowed to stand for one hour at 20℃. Also, at the same time, it should reduce the surface tension of distilled water to 4.5 X 10-2 N/m or less. Since there is a specific heading for Organic Surface-Active Agents under CTH 3402, therefore, the product i.e. CO2 Sustain 2501 which is described as pasteurized non-ionic surfactant, merits classification under CTH 3402 and specifically under Heading 34024200 as it is a non-ionic Organic Surface-Active Agent. It is pertinent to mention that since the products have not yet been imported into the country, the ruling in this case has to rely upon the information submitted by the applicant, product description and relevant information available in the public domain. From the information available, the product appears to be appropriately classifiable under CTI 3402 4200. However, it is contingent upon the testing of the products at the time of actual import of subject goods. Thus, conclude that the product CO2 Sustain 2501 being a pasteurized non-ionic surfactant, merit classification under Heading 3402 and more specifically under CTI 3402 4200. Issues: Whether the product 'CO2 Sustain 2501' (aqueous dispersion of Polysorbate 65) is classifiable as a non-ionic organic surface-active agent under Heading 3402 and specifically under CTH 3402 42 00.Analysis: The Authority examined the product description, manufacturer's certificate, technical and safety data sheets, and an independent test report measuring surface tension and stability at 0.5% concentration held at 206C for one hour. Chapter Note 3 to Chapter 34 and the HSN Explanatory Notes require that an 'organic surface-active agent' when mixed with water at 0.5% at 206C and left for one hour must (a) give a transparent or translucent liquid or stable emulsion without visible separation and (b) reduce the surface tension of water to 4.5 x 10^-2 N/m (45 dyne/cm) or less. The submitted test report showed a mean surface tension of 4.36 x 10^-2 N/m (43.6 mN/m) at 0.5% and that the sample remained a translucent liquid without separation after one hour, satisfying both conditions of Note 3. The Authority considered alternative headings (residuary Heading 3824 and Heading 3907 for polymers) and, applying the rule that a specific tariff description governs over a residuary entry, found those headings inapplicable. The Authority also noted that classification relies on information available and remains contingent on testing at actual import and compliance with applicable FSSAI requirements.Conclusion: The product CO2 Sustain 2501 satisfies the requirements of Chapter Note 3 and is classifiable as a non-ionic organic surface-active agent under Heading 3402, specifically under CTH 3402 42 00. This conclusion is in favour of the assessee.