TaxTMI 
TaxTMI 
2024 (2) TMI 1653
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....t on classification thereof under the Customs Tarriff Act, 1975 (CTA, in short) by posing questions as below: (i) Whether whey protein i.e., whey protein concentrate ('WPC', in short) or whey protein isolate ('WPI', in short) (irrespective of protein content), whether or r not containing sweetener/flavor/digestive enzymes/cocoa, but not a mixture of two or more WPC/WPI, are classifiable under CTH 0404 of the First Schedule to the CTA ?; (ii) Whether whey proteins comprising of two or more WPC and/or WPI, containing protein upto 80% (w/w), whether or not containing sweetener/flavor/digestive enzymes/cocoa, are classifiable under CTH 0404 of First Schedule to the CTA ?; and (iii) Whether whey proteins comprising of two or more WPC and/or WPI and containing protein more than 80% (w/w), whether or not containing sweetener/flavor/digestive enzymes/cocoa, are classifiable under CTH 3502 of First Schedule to CTA? 2.1 The applicant has stated that, they are proposing to import WPC and/or WPI of various compositions. The applicant has explained the goods in question, inter-alia stating that, 'whey protein' is a protein derived from milk ....
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....protein fractions have their own characteristic and properties; whey protein is a combination of all the protein fractions that are naturally found in liquid whey obtained from cow milk; the characteristics and properties of whey protein are different from the characteristic and properties of individual protein fractions; the manufacturers of whey protein produce raw WPI and/or WPC of different protein content or they mix two or more WPI and/or WPC to enhance the taste and make it economical, in which various flavours/cocoa/sweeteners/digestive enzymes are added by mixing or blending in order to enhance the taste and digestibility of the product; details about the products which they propose to import are as below: S. No. Category of Product Composition of the product Content of raw material Protein content 1. Category A WPI 100% 90% - 94% 2. WPC 100% 60% - 63% 3. WPI 97.3% - 94.6% 85% - 91% Sweetener 0.2% - 0.5% Chocolate flavor 0.5% - 0.9% Cocoa 2% - 4% 4. WPI 97.29% - 94.5% 85% - 91% Sweetener 0.2% - 0.5% Chocolate flavor 0.5% - 0.9% Cocoa 2% - 4% Digestive enzymes 0.01% -....
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....coa/digestive enzymes is classifiable under Heading 3502 of Schedule-I of CTA as "Albumin (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter), albuminates and other albumin derivatives" 2.3 The applicant has further stated that, the classification of goods covered under First Schedule of the CTA is to be determined in terms of the General Rules of Interpretation of Import Tariff ('GRI', in short); rule 1 of the GRI provides that the classification shall be determined according to the terms of the Heading and any related Section or Chapter Notes; rule 3(a) of GRI further provides that Heading which provides most specific description should be preferred over general Heading; classification schedule adopted under the CTA is based on the Harmonized System of Nomenclature ('HSN', in short) which is an internationally accepted product coding system formulated under the auspices of General Agreements on Tariffs and Trade ('GATT'); the international practice of adopting a uniform classification was done to facilitate common understanding of goods across countries and India is a sign....
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....mall quantities of chemicals (e.g., sodium bicarbonate) necessary for their processing; products in the form of powder or granules may contain anticaking agents (for example, phospholipids, amorphous silicon dioxide). For the purposes of Note 4 (b) to this Chapter the expression "butyric fats" means milk fats and the expression "oleic fats" means fats other than milk fats, in particular vegetable fats (e.g., olive oil) ... This Chapter also excludes, inter alia, the following: (a) Food preparations based on dairy products (in particular, heading 19.01). (b) Products obtained from milk by replacing one or more of the natural constituents (e.g., butyric fats) by another substance (e.g., oleic fats) (heading 19.01 or 21.06)." As per the applicant, from perusal of the above, it is evident that: * Food preparation based on dairy products are excluded from the purview of Chapter 4. * If any substance (such as stabilizers) is added to whey protein which helps to retain the character of the whey protein, the resultant continues to remain classified in Heading 0404. * If substances replacing one of the natural milk c....
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....nces, carriers, fillers, stabilisers or other technical aids. Such products are often put up in packaging with indications that they maintain general health or well-being. improve athletic performance, prevent possible nutritional deficiencies or correct sub-optimal levels of nutrients. These preparations do not contain a sufficient quantity of active ingredients to provide therapeutic or prophylactic effect against diseases or ailments other than the relevant nutritional deficiencies. Other preparations with a sufficient quantity of active ingredient to provide a therapeutic or prophylactic effect against a specific disease or ailment are excluded (heading 30.03 or 30.04)." : Thus, Heading 2106 is a residuary Heading which covers products which are food preparations and are not covered by any other Heading of the Nomenclature; further, the said Explanatory Note does not specially cover whey protein but covers protein supplements which are food preparations and are obtained from other materials; hence, Category A products if covered under any other Headings will not get covered under Heading 2106; since Category A products are most specifically covered under Headi....
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....ntent by a conversion factor of 6.38. Whey protein concentrates containing 80% or less by weight of whey proteins, calculated on the dry matter, are classified in heading 04.04."; from the bare perusal of Heading 3502 and HSN Explanatory Notes to Heading 3502, it is clear that it covers such products which are concentrates of whey proteins containing protein content of more than 80% and which are obtained by mixing two or more whey proteins; typically, whey protein contains about 22 different protein fractions out of which there are seven major protein fractions that altogether make up 85% of the whey protein; these major whey protein fractions are B- lactoglobulin, a-lactalbumin, bovine serum albumin, immunoglobulin, glycomacropeptide, lactoferrin, lactoperoxidase; pertinent to note that each of the individual protein fractions of whey protein have their own distinct and peculiar characteristics and functionalities and are therefore known distinctly even commercially; whey protein on the other hand is a unique combination of all 22 protein fractions naturally existing in cohesion which impart the whey protein its unique characteristics and functionality distinct from that of in....
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....ll be adopted while deciding classification of such mixtures; in the present case, whey proteins comprising of two or more WPC / WPI or WPC with WPI, containing protein more than 80% is the essential character of the product; the flavor, sweeteners and enzymes are merely ancillary to the same and does not change the essential character of the product; as stated above, the product is commercially known as 'whey protein' and 'whey protein concentrate' and not by its flavor or sweetener or digestive enzyme; in addition, the function of the product is to provide protein nutrition which is performed by the whey protein and not by the flavor or sweetener or digestive enzymes; flavors and sweeteners are added to add taste to the product; digestive enzymes as the name suggests are added to increase digestibility of the product; hence, adopting the classification of whey proteins comprising of two or more WPC/WPI or WPC with WPI, containing protein more than 80%, Category C products are classifiable under Heading 3502; hence, whey proteins comprising of two or more WPC and/or WPI, containing protein more than 80%, whether or not containing sweetener and/or flavor and/or dige....
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....dded that they have to still finalize the import modalities. 4. Comments on the application for advance rulings have been received from the concerned Commissionerate wherein it is inter-alia stated that, on perusal of Tariff Heading 0404, it can be seen that whey, whether or not concentrated, or containing added sugar or other sweetening matter can be classified under Heading 0404; as per explanatory notes to Heading 0404, this heading does not cover albumins (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter); further, as per explanatory notes of Heading 3502, this heading includes whey protein concentrates which contain two or more whey proteins and have a whey protein content of more than 80% by weight, calculated on the dry matter; further, it is also provided under the explanatory notes to heading 3502 that whey protein concentrates containing 80% or less by weight of whey proteins, calculated on the dry matter, are classified in Heading 0404; this would imply that concentrates of two or more whey proteins containing by weight more than 80% whey proteins, calculated on the dry matter would not....
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....ly found in the product. Further the Explanatory Notes of Heading 0404 (where whey is classified) provides that whey may be concentrated (e.g. in powder), and apart from natural milk constituents and additives as mentioned in the General Explanatory Notes to Chapter 4, the products of Heading 0404 may also contain added sugar or other sweetening matter. However, it is also laid down that food preparations based on natural milk constituents but containing other substances not allowed in the products of this chapter (in particular, heading 1901), are not covered under the heading. Also, the Explanatory Notes lays down that Heading 0404 does not cover Albumins (including concentrates of two or more whey proteins consisting by weight more than 80% whey protein, calculated on the dry matter (heading 3502). In light of the above, on further examination of the issue, it is also noted that Heading 2106 contains food preparations not elsewhere specified or included and the heading includes preparations often referred to as food supplements as dietary supplements consisting or based on, one or more vitamins, minerals, amino acids, concentrates, extracts, isolates or the like of substances fo....
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....otein concentrates which contain two or more whey proteins and have a whey protein content of more than 80% by weight, calculated on the dry matter. The whey protein content is calculated by multiplying the nitrogen content by a conversion factor of 6.38. Whey protein concentrates containing 80% or less by weight of whey proteins, calculated on the dry matter, are classified in heading 0404. 7.3 I also note that rule 1 of GRI inter-alia provides that the titles of Sections, Chapters and sub- chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes. 7.4 I note that goods in question for which ruling has been sought are food preparations and there is specific classification for 'Food preparations not elsewhere specified or included' under the heading 2106. 7.5 From the above, it may inter-alia be gathered that whey protein concentrates which contain two or more whey proteins consisting by weight more than 80% protein, calculated on the dry matter is classifiable under Heading 3502. Whey protein concentrates containing 80% or less by weight ....