TaxTMI 
TaxTMI 
2023 (7) TMI 702
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....T Act, Rules and the Notifications issued there under. 3. The applicant requested advance ruling on the following: 3.1. Is not the product "Dhathri Dahasamani" to be rightfully classifiable under HSN 0910 91 00 instead of classifying Linder HSN 2106 90 50 and therefore tax rate is under entry number 44 of schedule I prescribed by notification number 1/2017-CT(R) dated 28.06.2017 as amended? 3.2. If not classifiable as above, is not the product to be classifiable under HSN 2103 90 40 and therefore tax rate is under entry No. 44 of schedule I prescribed by notification No. 1/2017-CT(R) dated: 28,06.2017 as amended? 4. Contentions of the Applicant: 4.1. The applicant submits that they are the sole distributor of various herbal ayurvedic products produced by M/s. Warriers Hospital and Panchakarma Centre, Velanchira, Kayamkulam, Alappuzha. The products are manufactured under drag license number DL/No.24/25D/O4, issued by the Deputy Drugs Controller ASU and State Licensing Authority, Government of Kerala and renewed up to 31 December 2023. 4.2. It is submitted by the applicant that one of the products distributed by them, viz, "Dhathri Dahasamani", which is used as a fl....
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....redients are rich in essential oils and aromatic properties and because of their characteristic taste they are mainly used as condiments. Further, Chapter Note(l)(b) of Chapter 9 is reproduced as follows; "Note No, 1 Mixtures of the products of headings 0904 to 0910 are to be classified as follows: (a) ................................. (b) The mixtures of two or more of the products of different headings are to be classified in heading 0910. The addition of other substances to the products of headings 0904 to 0910 [or to the mixtures referred to in paragraph (a) or (b) above] shall not affect their classification provided the resulting mixtures retain the essential character of the goods of those heading. Otherwise, such mixtures are not classified in this Chapter, those constituting mixed condiments or mixed seasonings are classified in heading 2103". 4.5. The product "Dhathri Dahasamani' contains certain ingredients that come under the definition of "spice" as well as certain other substances. As per the Chapter Note 1(b) of Chapter 9, the addition of other substances to spices will not affect the classification provided the res....
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....Heading/Tariff item Description of Goods 44 Heading 0910 [other than 0910 11 10, 0910 30 10] Ginger other than fresh ginger, saffron, turmeric (curcuma) other than fresh turmeric, thyme, bay leaves, curry and other spices 4.8. The applicant states that without prejudice to the above, if the authority arrives at the conclusion that the subject product is not classifiable under Heading 0910; then it is to be classified under the Heading 2103 within Chapter 21 relating to miscellaneous edible preparations. The subject product can never be eaten up or consumed as food stuff, but it is only a condiment. The derived essence of a combination of various items in the mixture only is dissolved within water and the water is consumed and not the mixture as such and hence the product cannot be included in the category of food. Chapter Note (1)(b) of Chapter 9 is reproduced as follows; "Note No. 1 Mixtures of the products of headings 0904 to 0910 are to be classified as follows; (a) .................................. (b) The mixtures of two or more products of different headings are to be classified in heading 0910. The addition of other subs....
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....U and State Licensing Authority, Government of Kerala. The ingredients and their quantity used in the production of each packet of the product "Dhathri Dahasamani" weighing 50 grams is stated to be as below; Sl.No Material used Botanical name HSN code Proportion Qty Content % 1 Karingali Acacia catechu 1211 90 19 25g 50% 2 Pathimukam Prunus cerasoides 1211 90 29 10g 20% 3 Ramacham Vetiveriazizanioides 1211 90 49 5g 10% 4 Naruneendi Hemidesmus indicus 1211 90 49 4g 8% 5 Chandanam Santalum album 1211 90 50 2g 4% 6 Chukku Zingiber officinale 0910 11 20 4g 8% "Dhathri Dahasamani" 50g 100% 7.3. The product is a mixture of dried herbs and spices and when the mixture is added to boiling water in the prescribed measure the resultant drinking water will be slight dark coloured with a unique flavour. The product is used to enhance the flavour and taste of drinking water; 7.4. It is stated by the applicant that at present the product is supplied by classifying it under the CTH 2106 90 50 of Chapter 21 of the First Schedule to the Customs ....
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....prescribes the principles for the classification of goods consisting of more than one material or substance. The heading which provides the most specific description shall be preferred to headings providing a more general description. Mixtures, composite goods consisting of different materials or made up of different components shall be classified as if they consisted of the material or component which gives them their essential character. When goods cannot be classified as above, they shall be classified under the heading which occurs last in numerical order among those. Rule 4: Akin Rule - Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. 7.8. In the case of COMMISSIONER OF CENTRAL EXCISE Vs M/s WOCKHARDT LIFE SCIENCES LTD reported in 2012 (277) ELT 299 (SC); the Hon'ble Supreme Court, inter alia, laid down the following principles for the classification of goods; • There is no fixed test for classification of a taxable commodity. This is probably the reason why the common parlance test' or the 'commercial us....
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....of various Indian traditional convenience food mixes, masalas, spices and condiments such as puliyogare powder, vangibath mix, instant samber mix, vangibath powder, sambar powder, instantbisibe lebath, rasam powder, bisibelebath masala, mix spiced chutney powder, cury powder, pickle masala, garam masala etc. 2. From the reports received from the Commissionerates, it is observed that while in some places the products in question are being classified as either 'spices' of Chapter 9 of CET or as 'Mixed Condiments and mixed seasonings' of Heading 21.03 of CET, in others the same products are being classified under Heading 2108.90 as 'edible preparations not elsewhere specified or included'. In the latter case, Chapter Notes 9(b) & 9(c) of Chapter 21 are being relied upon for classifying these products under the sub-beading 2108.90. Trade interests have, however, argued that these products are merely additives for different food items and not readily consumable products through the simple processes of cooking, frying, boiling or adding with water, oil or milk. Hence it is claimed that the products in question cannot be classified under sub-heading 2108.9....
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....description. Further, Heading 21 in HSN excludes spices of Chapter-9. 4. Consequently, products which are predominantly mixtures of spices / condiments/ seasonings and which are used as such or in the making of food preparations mainly for their aromatic, flavouring or seasoning properties would merit classification under the specific entry of spices in Chapter 9 or Heading 21.03 of CET. However, products which in addition to spices, flavouring and seasoning substances also contain, other foodstuffs in such quantity that the products as such or after processing are capable of being used as food preparations for human consumption in their own right will go out of Chapter 9 or Heading 21.03 of CET and merit classification in the residuary heading 21.08 provided they are not covered or included in any other heading of CET. 4.2 Viewed in the context, products like sambar powder, rasam powder, puliyogare mix or powder, vanghibhath mix or powder consisting or mainly spices and required to be added to cooked dal or cooked rice mainly for spicing flavouring or seasoning would appear to merit classification as spices or mixed condiments and seasonings. On the other hand, p....
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....ient is only 8%. The subject product is primarily a mixture of Karingali, Pathimukam and Ramacham falling under Heading 1211; which together constitute 80% of the ingredients. The above ingredients together with Naruneendi and Chandanam both falling under Heading 1211 constitute 92% of the ingredients. Therefore, 92 % of the ingredients of the subject product fall under Heading 1211 and hence it cannot be considered as a mixture of products; of Headings 0904 to 0910 with the addition of other substances; but having the essential character of the goods of Chapter 9. Therefore, the product cannot be classified under the CTH 0910 91 00 - Mixtures referred to in Note 1 (b) to Chapter 9 of the First Schedule to Customs Tariff Act, 1975. 7.13. The product "Dhathri Dahasamini" is not capable of being used as a food preparation for human consumption in its own right; i.e., the product cannot be used as such either directly or indirectly or after processing (such as cooking, dissolving or boiling in water, milk or cither liquid etc.) for human consumption. On the other hand, it is used for flavouring or increasing the taste of water by adding it to boiling water. The consumers of the pro....