TaxTMI 
TaxTMI 
2026 (3) TMI 993
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.... Tariff Act, 1975 vide Finance Act, 2025. 2. FMC India Private Limited is a company incorporated in India and is a subsidiary of FMC Agricultural Products International GmbH, Switzerland, which is ultimately held by FMC Corporation, USA. The Applicant is engaged in the business of manufacturing agrochemicals and formulations. For this, the Applicant imports certain chemicals from various entities in the FMC Group for use as raw materials in the manufacturing activity. 2.1 The Applicant has been classifying imports of certain of these chemicals namely "Cyantraniliprole" and "Clothianidin" under Chapter 38 of the Customs Tariff. However, after the amendments to the Customs Tariff in 2025, it appears that these chemicals would be more appropriately classified under some of the new entries inserted in Chapter 29 of the Customs Tariff by finance Act,2025. 2.3 The applicant has submitted that the said chemicals will be imported in 200/226-liter MS drums. The subject chemicals are Technical Grade Chemical i.e. active ingredients used in the manufacture of insecticides. 2.4 After importation the subject chemicals are diluted with suitable solvents, such as water or hydrocarbons....
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....It begins with a condensation reaction between 2-chloro-5-chloromethylthiazole and 1,5- dimethyl-2-nitroimino-hexahydro-1,3,5-triazine in an aqueous solution of tetra alkyl ammonium hydroxide, with potassium carbonate as a base. This reaction yields an intermediate compound, which is then subjected to hydrolysis in an alkylamine solution. The resulting product is purified through filtration, desolvation, extraction, and concentration steps to obtain clothianidin in its final form. 3. Applicant's interpretation of Law: 3.1 The issue in the present case is regarding the classification of chemicals - "Cyantraniliprole" and "Clothianidin" and whether the appropriate entries for classification should be Entry 2933 39 23 (CTH 2933) and Entry 2934 10 10 (CTH 2934), respectively, or under CTH 3808 of the Customs Tariff, considering the amendments to the Customs Tariffs in 2025. 3.2 Prior to adverting to the specifics of these chemicals, it is relevant to set out the framework and principles governing the classification of goods. International and legal framework for classification of goods It is submitted that India, being a member of the World Customs Organization (WCO)....
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....this rule the relative Section and Chapter Notes also apply, unless the context otherwise requires. [Emphasis supplied] The additional notes to GRI provide that - "heading", in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all sub-headings of tariff items the first four-digits of which correspond to that number. " "sub-heading", in respect of goods, means a description in the list of tariff provisions accompanied by a six-digit number and includes all tariff items the first six-digits of which correspond to that number. "Tariff item" means a description of goods in the list of tariff provisions accompanying eight- digit number and the rate of customs duty; 3.4 On a plain reading of Rule 1, it is clear that for classification purposes, goods must first be classified as falling under a specific heading at the four-digit level of the relevant chapter, on the basis of the terms of the headings, and the relevant section or chapter notes. Only thereafter can they be further classified under a corresponding sub-heading or tariff item. The corollary of this manner of classificatio....
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....assifiable in heading 3004, 3005, 3006, 3212, 3303, 3304, 3305, 3306, 3307, 3506, 3707 or 3808 by reason of being put up in measured doses or for retail sale are to be classified in those headings and in no other heading of this Schedule. [Emphasis supplied] Relevant tariff entries of Chapter 29: Chapter/Heading/Sub- Heading/Tarif f Item Description of goods (1) (2) 29 All organic chemicals other than gibberellic acid 2933 Heterocyclic compounds with nitrogen hetero-atom(s) only - Compounds containing an unfused pyrazole ring (whether or not hydrogenated) in the structure: 2933 39 -- Other: --- Derivatives of pyridine: 2933 39 23 ---- Goods specified in Supplementary Note 14 to this Chapter 2934 Nucleic acids and their salts; whether or not chemically defined; other heterocyclic compounds 2934 10 - Compounds containing an unfused thiazole ring (whether or not hydrogenated) in the structure: 2934 10 10 --- Clothianidin, oxathiapiprolin, thifluzamide, thiomethoxam CHAPTER 29 Organic chemicals Notes: 1. Excep....
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.... growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulphur treated bands wicks and candles, and fly papers) - Goods specified in Sub-heading Note 1 to this Chapter: 3808 91 -- Insecticides: 3808 91 42 ---- Goods specified in Supplementary Note 2 to this Chapter 3.6.3 The relevant portion of explanatory General Notes to the HSN for Chapters 29 and 38 is as below: Chapter 29 GENERAL As a general rule, this Chapter is restricted to separate chemically defined compounds, subject to the provisions of Note 1 to the Chapter. (A) Chemically defined compounds (Chapter Note 1) A separate chemically defined compound is a substance which consists of one molecular species (e.g., covalent or ionic) whose composition is defined by a constant ratio of elements and can be represented by a definitive structural diagram. In a crystal lattice, the molecular species corresponds to the repeating unit cell. (D) Exclusion from Chapter 29 of certain separate chemically defined organic compounds (Chapter Note 2) (2) Certain ot....
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....ng products and plant growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulphur treated bands wicks and candles, and fly papers. 3.9 Applying Rule 1 discussed earlier, the classification must be based on the terms of the headings, and the relevant section or chapter notes, and only thereafter can they be further classified under a corresponding sub-heading or tariff item. For this, as also discussed earlier, each heading must be read in its entirety. In the present case, for Cyantraniliprole, the comparison is between a heading (Heading 2933) that describes the chemical in organic chemistry terms and a heading (Heading 3808) which is predicated on the goods being put up in forms or packings for retail sale. Given that Cyantraniliprole imported by FMC is in pure form, unmixed, and not put up in forms for retail sale or in any prepared form possessing the character of a preparation or article, it is submitted that it is more appropriately classifiable under the relevant headings of Chapter 29. 3.10. In this connection, reference is made to the Explanatory Notes to Rule 1 of the Rules f....
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....ic appliances with self-contained electric motor). (b) If the goods answer to a description which more clearly identifies them, that description is more specific than one where identification is less complete. Examples of the latter category of goods are : (1) Tufted textile carpets, identifiable for use in motor cars, which are to be classified not as accessories of motor cars in heading 87.08 but in heading 57.03, where they are more specifically described as carpets. (2) Unframed safety glass consisting of toughened or laminated glass, identifiable for use in aircraft but not advanced beyond having been shaped, is to be classified not in heading 88.07 as parts of goods of heading 88.01, 88.02 or 88.06 but in heading 70.07, where it is more specifically described as safety glass." 3.14 It is submitted by an application of both the tests set out above, Cyantraniliprole will fall for classification under the Heading 2933. From an organic chemistry standpoint, Cyantraniliprole is fundamentally a heterocyclic compound with nitrogen hetero-atom(s) only and directly answers to this description - therefore on the touchstone of "description by name" being mo....
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....s to 'separate chemically defined organic compounds,' whether or not containing impurities. Clomazone, by its very nature, squarely falls within this definition as a separate chemically defined organic compound. 3.18 By contrast, Chapter 38 Note 1(a) expressly excludes separate chemically defined compounds, except for insecticides, herbicides, fungicides, and similar products that are 'put up as described in Heading 3808.' The HSN Explanatory Notes further reinforce this distinction by stating that Chapter 29 is intended to cover separate chemically defined compounds, however, when such compounds are put up in packings for retail sale or when they have the character of preparations, for instance, liquids, washes or powders, they are excluded from Chapter 29 and shifted to Heading 3808. Products not answering this description, such as Cyantraniliprole remain properly classifiable in Chapter 29. 3.19 Accordingly, a combined reading of the Section Notes, Chapter Notes, and Explanatory Notes makes the position clear that Cyantraniliprole, being a separate chemically defined organic compound imported in bulk form and not put up in measured doses or for retail sale,....
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....of the following subject goods. a) Cyantraniliprole b) Clothianidin They contended that the above subject goods in terms of GRI-1, GRI-3 Specific heading and entry read with supplementary note merit classification under CTH-2933 and 2934 respectively. They in support of their claim relied upon GRI-1 and GRI-3, Specific heading, supplementary note to the chapter 29 & 38. In addition, they also rely upon GRI-6.They further contended that classification under CTH 3808 not applicable. They also sought one-week time to file additional submission which is permitted. Additional Submission: 6. The applicant vide its additional submission dated 07.01.2026 submitted as follows: the words 'put up' in the phrase "put up in forms or packings for retail sale or as preparations .... " in Tariff Heading 3808 apply to each of the three cases Meaning of 'put up' The term 'put up' is not defined in the Customs Tariff Act, 1975. However, in the context of classification, 'put up' means presented, and denotes the manner of presentation at the time of import or export. 6.1 Recently, the Hon'ble CESTAT, New Delhi....
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....es exclusively to substances whose presence in the single chemical compound results solely and directly from the manufacturing process (including purification). These substances may result from any of the factors involved in the process and are principally the following: (a) Unconverted starting materials; (b) Impurities present in the starting materials; (c) Reagents used in the manufacturing process (including purification); (d) By-products ... " The US CBP noted that the constituent goods other than the active chemical were manufacturing impurities and water, rather than ingredients purposely added, and therefore concluded that the correct classification would be under Chapter 29. 6.7 Role and proportion of other ingredients 6.7.1 A key factor in determining whether a product is a formulation under Chapter 38 or a technical-grade chemical under Chapter 29 is the role and proportion of other constituents. If ingredients other than the active are deliberately added as formulation aids (carriers, stabilizers, dispersants), the goods become a 'preparation' (falling for classification under Chapter 38), but if the balance ingredien....
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....emical name of 2-chloroethylphosphonic acid, consisting of carbon, hydrogen, chlorine, oxygen, and phosphorus in a constant ratio and with a definite structural formula. The inert ingredients are not intentionally added but rather are unintended results of the manufacturing process. These impurities were not deliberately left in to render the product particularly suitable for specific use. The separately defined chemical compounds, as defined in general EN, are then dissolved in water. Therefore, the merchandise meets the terms of Chapter 29, note 1 (a) and (d) and the general EN thereto. Additionally, the chemical structure of the ethephron includes a phosphorous atom directly linked to a carbon atom. Therefore, the substance meets the terms of heading 2931, HTSUS.[ ... ]" 6.9.2 Further, reliance is placed on (NY) N243474 dated 09.08.2013, wherein the product, V- 10135 Technical Fungicide, contains 96.6 per cent of Fenpyrazamine, as the active ingredient, with the remaining ingredients as impurities under Chapter 29. Furthermore, reliance is placed on (NY) N313341 dated 05.08.2020. 6.10 The Subject Chemicals Are Not "preparations" in the Chapter Heading 38.08 6.10.1 The E....
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....Supplementary Notes 1, 2, 5, 7 and 8 are being amended, 6 new Supplementary Notes are being inserted, and some tariff items are being inserted/substituted [Clause 98(b) of the Finance Bill, 2025 read with Third Schedule refers] The aforesaid clause 98(b) of the Finance Bill, 2025 is extracted as under for reference - "Customs tariff Clause 98 seeks to amend the First Schedule to the Customs Tariff Act (a) ... (b) in the manner specified in the Third Schedule with view to harmonise certain entries with the Harmonised System of Nomenclature to create new tariff lines in respect of certain entries and to revise the rates in respect of certain tariff items, with effect from the 1st May, 2025 ... " 6.11.3 Correlation of Customs Tariff between 2024-2025 Reference is also made to the document named "Correlation of Customs Tariff between 2024- 2025"- which presents the correlation between the tariffs at the 8-digit level, documenting the manner in which the commodities covered by the Tariff of 2024 have been accommodated in the Tariff of 2025. The Guidance Note to the Correlation Table explains that the correlation code consists of a two-alphabe....
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....re is nothing ITC (HS) to suggest that the CTI under Chapter 29 would not be applicable. 6.12 Judicial precedent 6.12.1 It is well-settled law that every legislative amendment must be given meaningful effect [Refer: Quebec Railway, Light, Heat and Power Company Limited v. Vandry & Ors. [AIR 1920 PC 181]; Commissioner, Customs Central Excise and Service Tax v. M/S Shapoorji Pallonji (2023) 15 S.C.R. 421; Utkal Contractors & Joinery (P) Ltd. vs State of Orissa (1987) 3 SCC 279]. Per this, the 2025 amendments introducing new entries in Chapter 29 would be rendered entirely redundant and otiose if classification were to be continued under Chapter 38, which would contradict the legislative objective. 6.12.2 The decision in UOI vs. Pesticides Mfg. & Formulators Association of India is distinguishable on facts and not a binding precedent : The judgement of the Hon'ble Supreme Court in UOI vs. Pesticides Mfg. & Formulators Association of India [2002 (146) ELT 19 (SC)] can be distinguished on fundamental facts: (i) That case pertained to the Central Excise Tariff, and specifically to the validity of a Circular seeking to clarify that the technical grade pesticides (sim....
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....distinction can be drawn between the loss on account of leakage and loss on account of damage. The words 'for use' used in similar exemption Notifications have also been construed by this Court earlier in the State of Haryana v. Dalmia Dadri Cement Ltd., 1987 (Suppl) SCC 679 to mean 'intended for use'. According to this decision the object of grant of exemption was only to debar those importer/manufacturers from the benefit of the Notifications who had diverted the products imported for other purposes and had no intention to use the same for manufacture of the specified items at any stage." 7.1.2 The possible extension thereof of "for retail sale" to mean "intended for retail sale" could have the implication that Chapter 38 would become applicable in the present case in view of the following wording Section Note 2 to Section VI of the Customs Tariff, which reads as follows: "2. Subject to Note 1 above, goods classifiable in heading 3004, 3005, 3006, 3212,3303, 3304, 3305, 3306, 3307, 3506, 3707 or 3808 by reason of being put up in measured doses or for retail sale are to be classified in those headings and in no other heading of this Schedule." 7.1.3 ....
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....inciples govern such consideration. The Court concluded, relying upon the judgment in Dunlop India Ltd. (supra), that classification must align with the taxable event, i.e., importation. Certain relevant paragraphs are reproduced below for your ready reference: "73. While the judgment of this Court in Dunlop India (supra) was delivered in the pre-HSN era, it laid down two principles governing classification under the customs law which remain relevant even in the HSN era. They are: (i) evaluation and classification of goods based on their condition at the time of import, generally referred to as the 'as imported' principle; and (ii) consideration of 'use' only when reference to use or adaptation is provided in the tariff heading ... ... 85. .... according to Section 12 of the Act, 1962, it is evident that the goods are taxable at the point of import. Therefore, as recognised by this Court in Dunlop India (supra), what is crucial is the condition of the goods at the time of import, which is the taxable event under the Act, 1962. By excluding consideration of actual use and subjective intentions regarding use, it is ensured ....
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....and presentation of the goods at the time of importation, and not on the basis of their intended or eventual end use. 7.4 The cited Section Note only applies to goods that are put up for retail sale: 7.4.1 As extracted above, Section Note 2 to Section VI of the Customs Tariff reads as follows: "2. Subject to Note 1 above, goods classifiable in heading 3004, 3005, 3006, 3212, 3303, 3304, 3305, 3306, 3307, 3506, 3707 or 3808 by reason of being put up in measured doses or for retail sale are to be classified in those headings and in no other heading of this Schedule." 30.4.1 On a plain reading, the aforesaid Section Note (a) applies only to the specific tariff headings expressly enumerated therein. (b) that too, its applicability is triggered only where the goods are otherwise classifiable under any of those headings by reason of being put up in measured doses or for retail sale; (c) provides that if the aforesaid conditions are both satisfied, classification will be under those headings and not under any competing heading. The Note does not create an independent basis of classification; rather, it regulates classification on....
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....s classifiable under Heading 35.06 which covers "Prepared glues and other prepared adhesives, not elsewhere specified or included; products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg". The shift in classification occurs because dextrin, by reason of being put up for retail sale as a glue, answers the description of Heading 35.06 - and it then has to rest there. In other words, it is only when the manner of presentation (i.e., retail packing as an adhesive) brings the product within the scope of one of the enumerated headings that Section Note 2 operates to prefer that heading over another competing heading (such as 35.05). 7.4.5 The example of sulphur further reinforces this principle. Sulphur, in its general form, is classifiable under Chapter 25 or Chapter 28, depending upon its nature. However, the Explanatory Note states that sulphur put up for retail sale for therapeutic purposes is to be classified under Heading 30.04 and not under Heading 25.03 or 28.02. Here again, the determinative factor is not the inherent chemical identity of sulphur, but the fact that it is put up for retail sale for thera....
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.... for the care of the skin (other than medicaments), including sunscreen or suntan preparations; manicure or pedicure preparations 3305 Preparations for use on the hair 3306 Preparations for oral or dental hygiene, including denture fixative pastes and powders; yarn used to clean between the teeth (dental floss), in individual retail packages 3307 Pre-shave, shaving or after-shave preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet preparations, not elsewhere specified or included; prepared room deodorisers, whether or not perfumed or having disinfectant properties 3506 Prepared glues and other prepared adhesives, not elsewhere specified or included; products suitable for use as glues or adhesives, put up for retail sale as glues or adhesives, not exceeding a net weight of 1 kg - 3707 Chemical preparations for photographic uses (other than varnishes, glues, adhesives and similar preparations); unmixed products for photographic uses, put up in measured portions or put up for retail sale in a form ready for use - 3808 Insecticides, rodenticides, fungicides, herbicides, anti- sprouting prod....
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....oxaphos-phinan- 2-one), being a cyclic ester of a dihydric alcohol with phosphonic acid, which contains a fused pyrimidine ring (purine) in its structure. Application of GIRs 1 (Note 7 to Chapter 29) and 6. Adoption : 2007 Not relevant to present discussion as no similarity to products under consideration. 380891/1 Antiparasite lotion containing 1.8 depallethrin (active ingredient), 7.2 piperonyl butoxide (synergist for the active ingredient), isododecane and propellant gas HFA134a. The product is packaged for retail sale in a 125 ml bottle of plastics, which itself is packaged in paperboard box. Both the bottle and box indicate that the product is recommended for treating lice and nits on the scalp (head lice) and that it should be applied once only onto the scalp on dry hair in ventilated place. After the product is used, the head should be washed with a gentle shampoo that makes removal of the dead nits easier. Application of GIRs 1 and 6. Adoption : 2012 Relevant precedent as the good is put up in a packing for retail sale. Impliedly supports classification of subject goods under Chapter 19, as only a good put up in a packing for retail sale is to ....
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....t), perfume, kerosene, ethyl alcohol and isobutane (propellant) and, in some preparations, diethyl phthalate. Used in hospitals, surgical theatres, offices, schools, sick- rooms, etc., to safeguard against the propagation of fungi. Adoption : 1999 Relevant precedent as the good is put up in a packing for retail sale. Impliedly supports classification of subject goods under Chapter 19, as only a good put up in a packing for retail sale is to be classified under Chapter 38. 380894/1 Preparations consisting of a mixture of formic acid and propionic acid, with or without the addition of ammonium format, diluted in water, used in the manufacture of animal feeds for their antimicrobial properties to control undesirable microorganisms such as bacteria (e.g., salmonella), yeasts or moulds. Application of GIR 1. Adoption : 1999 Relevant precedent as the good is a preparation. Impliedly supports classification of subject goods under Chapter 19, as only a preparation is to be classified under Chapter 38. 380894/2 Broad spectrum antimicrobial agent based on derivatives of isothiazolinone, in aqueous solution. In contact with microorganisms, e.g., fungi, bacteria a....
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....e Customs Tariff Act, 1975, specifically Chapter 29 & 38, its corresponding Chapter notes, supplementary notes and relevant HSN explanatory notes. 11. I observe that there are two possible classifications of the chemicals i.e. "Cyantraniliprole" and "Clothianidin". One is under Chapter 29 as separate chemically defined organic compounds and other is under Chapter 3808 as insecticides. The details of the both the possible classifications viz Chater/CTH and CTI are mentioned in table below: Subject goods Description Classification as Chemical In terms of Classification as an insecticide In terms of Cyantraniliprole - Technical Grade CTH 2933 CTI 29333923 Supplementary Note 14 CTH 3808 CTI 38089142 Supplementary Note 2 Clothianidin- Technical Grade CTH 2934 CTI 29341010 Specific tariff item CTH 38078 CTI 38089142 Supplementary Note 2 I observe as per the applicant submission and interpretation of law as mentioned above in this ruling, the subject goods i.e. "Cyantraniliprole" and "Clothianidin" are claimed to be classifiable under Chapter 29 under CTH 2933 and 2934 being separate chemically defined organic compounds of the respective ....
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....emical composition as indicated below :- Chemical Composition Clothianidin a.i. Clothianidin a.i. : : 98.00 min.% w/w (Z)-N-(1-((2-chlorothiazol-5-yl) methyl)-3,5-dimethyl-1,3,5- triazinan-2-ylidene)nitramide (Z)-N-(1-((2-chlorothiazol-5-yl) methyl)-3,5-dimethyl-1,3,5- triazinan-2-ylidene)nitramide : 0.50 max.% w/w 1,3-bis((2-chlorothiazol-5-y1) methyl)-2-nitroguanidine 1,3-bis((2-chlorothiazol-5-yl): methyl)-2-nitroguanidine : 0.50 max.% w/w Methanol Methanol : : 0.50 max.% w/w Water Water : : 0.50 max.% w/w Total : : 100.00% w/w Further, the detailed chemical compositions and associated impurities are mentioned in the annexures to the respective CIB certificates. 14.1 From the details of the subject goods i.e. Cyantraniliprole- and Clothianidin as mentioned above and detailed in in CIB certificates, technical write up, MSDS and COA following facts emerges: ⮚ The subject goods are insecticides ⮚ the subject goods are technical/formulated material. ⮚ The subject goods are and are of technical grade chemicals. ⮚ The subject ....
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....fen-benzyl, fluazifop-P-butyl, fluopicolide, fluopyram, forchlorfenuron, haloxyfop-P- methyl, picoxystrobin, pyridalyl, pyriofenone, pyriproxyfen, sulfoxaflor. [Emphasis supplied] 15.2 The relevant headings and tariff entries as well as the chapter note of both the chemicals Cyantraniliprole and Clothianidin which are insecticides under Chapter 38 CTH 3808 is produced as below: Chapter/Heading/Sub-Heading/Tariff Item Description of goods (1) (2) 3808 Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulphur treated bands wicks and candles, and fly papers) - Goods specified in Sub-heading Note 1 to this Chapter: 3808 91 -- Insecticides: 3808 91 42 ---- Goods specified in Supplementary Note 2 to this Chapter 15.3 Relevant Chapter Note of chapter 38 for classification of the subject goods under Chapter 38 and CTH 3808 as insecticide are produced below: CHAPTER 38 Miscellaneous chemical products Notes: ....
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....) Disinfectants, insecticides, etc., put up as described in heading 38.08. Chapter 38 GENERAL This Chapter covers a large number of chemical and related products. It does not cover separate chemically defined elements or compounds (usually classified in Chapter 28 or 29), with the exception of the following: (2) Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products, put up as described in heading 38.08. These products are classified here in the following cases only: When they are put up in packings (such as metal containers or paperboard cartons) for retail sale as disinfectants, insecticides, etc., or in such forms (e.g., in balls, strings of balls, tablets or plates) that there can be no doubt that they will normally be sold by retail. When they have the character of preparations, whatever the presentation (e.g., as liquids, washes or powders). When they are put up in the form of articles such as ... This heading excludes: Products for disinfecting, insecticidal etc., uses, not answering the descriptions above....
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.... in 200/226-litre MS drums. Hence, they are not put up for retail sale and are not in the form of articles. Accordingly, it must be examined whether the goods have the character of preparations. The relevant HSN explanatory note clarifies that preparations include suspensions, dispersions, solutions, or intermediate preparations possessing insecticidal properties. The same is produced below: When they have the character of preparations, whatever the presentation (e.g., as liquids, washes or powders). These preparations consist of suspensions or dispersions of the active product in water or in other liquids (e.g., a dispersion of DDT (ISO) (clofenotane (INN), (1, 1, 1-trichloro-2,2-bis(p- chlorophenyl)ethane) m water), or of other mixtures. Solutions of active products in solvents other than water are also included here (e.g., solutions of pyrethrum extract (other than standardised pyrethrum extract), or copper naphthenate in a mineral oil). Intermediate preparations, requiring further compounding to produce the ready-for-use insecticides, fungicides, disinfectants, etc., are also classified here, provided they already possess insecticidal, fungicidal, etc., proper....
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....or intermediate preparations within the meaning of CTH 3808. 18. The commercial production details of the subject chemicals as mentioned in the technical literature (submitted by applicant) the goods are as mentioned below: 18.1 Cyantraniliprole (Ref: DPX-HGW86)- The commercial production of cyantraniliprole involves a multi-step synthesis starting with pyrazole and pyridine derivatives, followed by bromination, nitrile-introduction, and carboxamide formation to yield the final active molecule. 18.2 Clothianidin (Ref: CGA 322704)- The commercial production of clothianidin involves a multi-step chemical synthesis process designed for efficiency and scalability. It begins with a condensation reaction between 2-chloro-5-chloromethylthiazole and 1,5-dimethyl-2-nitroimino- hexahydro-1,3,5-triazine in an aqueous solution of tetra alkyl ammonium hydroxide, with potassium carbonate as a base. This reaction yields an intermediate compound, which is then subjected to hydrolysis in an alkylamine solution. The resulting product is purified through filtration, desolvation, extraction, and concentration steps to obtain clothianidin in its final form. 18.3 Also, step production proces....
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....he commercial production details of the subject goods in the technical literature. 20. From above it can be safely concluded that the subject goods are in the nature of preparations or intermediate preparations possessing insecticidal properties. Further, the applicant has claimed that the same will be used in manufacturing of insecticides. In that case also the subject goods are intermediate preparation that are also covered under CTH 3808 as per the HSN explanatory Note to CTH 3808. 20.1 I find that the said matter whether the technical grade insecticides that are preparation or otherwise and fall under the purview of the CTH 3808 has already been decided by Hon'ble Supreme Court of India in its judgement dated 23.10.2002 pronounced in the matter of Union of India v/s Pesticides Manufacturing & Formulators Association of India [2002 (146) ELT 19(SC)]. The same is squarely applicable in the instant case as the matter being identical (Classification of technical grade insecticide in concentrated bulk forms). The relevant paras of the said supreme court decision is produced below: 13. As far as Tariff Heading 38.08 was concerned, after the phrase insecticides, rodenti....
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....bstances contained in mixed or composite goods or to part only of the items in a set, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b)*** (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration." 19. Paraphrased and simply put, the quoted extracts of the Rules direct that the goods would include its formulations and that the more specific heading should be preferred and if there are two such specific headings to which a product can be referred, the one occurring subsequently would prevail. 20. Chapter 28 and Chapter 29 are, as already noted, general provisions relating inter alia to separate chemical compounds. Chapter 38 is the specific chapter dealing with particular chemical compounds viz. insecticides, pesticides etc. In keeping with the Rules quoted, TGP manufactured by the respondent are classifiable under the particular subsequent provision and not under the residuary headings occurring ear....
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....ifies that the classification covered products (1) when they are put up in packings or in such forms that there can be no doubt that they will normally be sold by retail, and (2) when they have the character of preparations. It also says: "Intermediate preparations, requiring further compounding to produce the ready-for-use insecticides, fungicides, disinfectants etc. are also classified here, provided they already possess insecticidal, fungicidal etc. properties." Hence preparations with insecticidal, fungicidal properties are classifiable under Heading 38.08 20.2 As per submission of applicant subject goods are Technica! Grade insecticides. The subject goods are similar/identical to the goods whose classification was decided in the above-mentioned Supreme Court judgement. There is no doubt that subject goods are chemically defined compounds. However, as discussed in earlier the subject chemicals are clearly preparation/formulation produced from multi-step chemical synthesis process. Thereby, applying the ratio of the above-mentioned Supreme Court judgement the subject goods being compounds itself denotes a preparation of components and fall well within the de....
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....udgetary Changes Introduced by the Finance Act, 2025 23.1.1 The applicant has contended that the introduction of specific tariff entries for Cyantraniliprole and Clothianidin under Chapter 29 through the Finance Act, 2025 indicates a legislative intent to classify the said chemicals exclusively under Chapter 29 and that their continued classification under Chapter 38 would render the amendment redundant. The applicant has further stated that the present application has been filed consequent to the changes made in the Customs Tariff Act, 1975 through the Finance Bill, 2025. 23.1.2 However, the above contention of the applicant is not sustainable. It is observed that the Finance Act, 2025 simultaneously introduced specific tariff items and supplementary notes in both Chapter 29 and Chapter 38 of the First Schedule to the Customs Tariff Act, 1975 with specific intent and purpose with effect from 01.05.2025. 23.1.3 In this regard, the relevant portion of the Memorandum Explaining the Provisions in the Finance Bill, 2025 relating to amendments in the Customs Tariff Act, 1975 reads as under: II. AMENDMENTS TO THE CUSTOMS TARIFF ACT, 1975 S. No. Amendment to sectio....
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....dicates that the tariff entry under Chapter 38 is intended to cover technical-grade insecticidal substances having high purity of the active ingredient, which are commonly traded as technical-grade pesticides for further formulation or direct insecticidal use. 23.2.4 In the present case, the subject goods, namely Cyantraniliprole - Technical Grade and Clothianidin - Technical Grade, satisfy the prescribed criterion of content by mass greater than 90%, as provided under Supplementary Note 2 to Chapter 38. The goods are preparation, intended for insecticidal use and possess insecticidal properties. 23.2.5 Therefore, both by virtue of the nature and use of the goods as well as the percentage-based criterion prescribed in the tariff, the subject chemicals squarely fall within the scope of Tariff Item 3808 91 42. 23.3 Conclusion on Legislative Intent As discussed supra, having regard to the scheme of the tariff, the Memorandum explaining the provisions of the Finance Bill, 2025, the distinction drawn between dual-use chemicals under Chapter 29 and technical-grade pesticides under Chapter 38, as well as the specific percentage criterion prescribed under Supplementary Note 2 t....
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.... that the budgetary changes made vide Finance Bill 2025 is brought it to align with import policy in as much as, dual use chemicals for non-pesticidal uses are to be classified under Chapter 29 (organic chemicals) only. These provisions bring greater clarity and consistency to the determination of the classification of these chemical compounds. 25. In view of the foregoing discussion, the subject chemicals are found to possess insecticidal properties and qualify as technical-grade pesticides. Consequently, they are classifiable under Heading 3808, which covers insecticides. The appropriate sub-heading is CTSH 3808 91 - Insecticides, and further, in terms of Supplementary Note 2 to Chapter 38, the subject goods are specifically covered under Tariff Item 3808 91 42. 25.1 Accordingly, the goods namely Cyantraniliprole - Technical Grade and Clothianidin Technical Grade are appropriately classifiable under CTH 3808, under CTSH 3808 91 - Insecticides, and more specifically under Tariff Item 3808 91 42 of the First Schedule to the Customs Tariff Act, 1975. 26. The case laws relied upon by the applicant are not applicable to the case. 26.1 In the matter of Midas Fertchem Impex ....
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.... 26.4 In the present case, the question before this Authority is about the classification of technical grade insecticidal compounds, which is precisely the subject matter covered in the judgment passed by Hon'ble Supreme Court in the matter of Union of India vs Pesticides Manufacturers & Formulators Association of India. The interpretative principle applied by the Supreme Court-namely that technical grade insecticides retain the essential character of insecticides even when not formulated for retail sale-remains directly relevant to the present dispute. 26.5 Hon'ble Supreme Court held in that case the technical preparation/intermediate preparation grade pesticides as (ii) Effect of Amendments in Chapter 29 27. The applicant has further submitted that the Hon'ble Supreme Court in the above judgment noted that no amendments had been made to Chapter 28 or 29 affecting separate chemically defined compounds, whereas in the present case the Finance Act, 2025 has introduced new entries in Chapter 29 for Cyantraniliprole and Clothianidin. 27.1 The Finance Act, 2025 simultaneously introduced specific tariff entries for the same chemicals under Chapter 38 by vir....
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....3 (S.C.)] (ii) CCE, New Delhi v. Connaught Plaza Restaurant (P) Ltd. [2012 (286) E.L.T. 321 (S.C.)] (iii) CCE, Nagpur v. Shree Baidyanath Ayurved Bhawan Ltd. [2009 (237) E.L.T. 225 (S.C.)| iv) M/s. Pharm Aromatic Chemicals reported in 1997(95)E.L.T.203 (Bom.) v) Dunlop India Ltd. & Madras Rubber Factory Ltd reported in 1983 (13) E.L.T. 1566 (S.C.) . vi) M/s. Kantilal Nanchand and Co. reported in 2000-(123)E.L.T.311 (Bom.) vii) M/s. Bella Premier Happy Hygiene Care Pvt. Ltd. reported in 2018 (17)G.S.T.L 603 (Kar.). From, all the relevant documents submitted by the applicant technical write up, MSDS, COA and CIB certificate it is clear that the subject goods are known, sold marked in the trade as insecticides only. Therefore, by applying the ration of the above-mentioned judgement also the goods are more specifically classifiable as insecticides under CTH 3808. 29. To sum up: i) The subject chemicals, namely Cyantraniliprole and Clothianidin, are Technical Grade Chemicals. ii) As per the technical write-up (Cyantraniliprole DPX-HGW86 and Clothianidin Ref: CGA 322704), both substances are specifically descri....