Commercial purity governs tariff classification, while transaction value needs reliable comparable import evidence before enhancement.

Tariff classification of alpha pinene 85% turned on whether commercially pure terpenic hydrocarbons were excluded from Chapter 38 and restored to Chapter 29; on the technical and commercial material, the product was treated as commercially pure alpha pinene and classified under heading 2902.19. For valuation, the higher assessable value could not be sustained on the existing material because rejection of invoice value required reliable contemporaneous evidence of comparable imports of similar quantity and grade; the valuation issue was remanded for fresh consideration after hearing the importers and examining the evidence.

---

---

Issues: (i) Whether alpha pinene 85% was classifiable under heading 2902.19 or heading 3805.90; (ii) Whether the enhanced assessable value was sustainable.

Issue (i): Whether alpha pinene 85% was classifiable under heading 2902.19 or heading 3805.90.

Analysis: The competing chapter notes and exclusions showed that pure or commercially pure terpenic hydrocarbons were taken out of Chapter 38 and brought back into Chapter 29. On the material before it, the product was found to be around 90% pure, and even on the suppliers' certificate it was 85% pure. Government laboratory opinions and commercial material supported the view that such purity answered the description of commercially pure alpha pinene.

Conclusion: The goods were classifiable under heading 2902.19, and the Revenue's appeal failed.

Issue (ii): Whether the enhanced assessable value was sustainable.

Analysis: The evidence on valuation was found to be insufficient for sustaining the higher figure. The invoice value was the starting point, and departure from it required reliable evidence of comparable imports of similar quantity and grade. The materials relied upon by the department did not adequately establish a trustworthy basis for rejecting the transaction value, while the importers were to be given an opportunity to adduce better evidence on remand.

Conclusion: The valuation issue was remanded for fresh consideration after hearing the importers and examining the evidence on contemporaneous values.

Final Conclusion: The classification of the goods was upheld in favour of the importers, while the valuation dispute was sent back for reconsideration, leaving the overall result partly in favour of the importers.

Ratio Decidendi: Where tariff notes exclude commercially pure products from one chapter and restore them to another, classification follows the commercially pure description if supported by credible technical evidence; in valuation disputes, rejection of transaction value requires reliable contemporaneous evidence of similar imports in comparable quantity and grade.

---