TaxTMI 
TaxTMI 
2024 (12) TMI 1732
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.... 'subject products') are different brands of food emulsifying agents. An emulsifier enables the creation of uniformly blended products (emulsions) from ingredients which, because of fundamental differences in their physical and chemical properties are immiscible. These subject products are a blend of mono-diglyceride, and triglyceride with antioxidants added. The product data sheets, safety data sheets and suppliers confirmation regarding the composition of the subject products are enclosed as Exhibit-B. 1.3 Though each of the subject products have different components, they are being clubbed together for the purposes of this Application since the major component is "mono and di glyceride of fatty acid". 1.4 The chemical composition of the Dimodan UO-M is given in the table below: PARTICULARS DIMODAN UO-M USE QUANTITY Predominant Ingredient Mono and diglycerides of fatty acids (E471) Emulsifier Approx 100 % Other Ingredients (Antioxidants) Alpha-tocopherol (E307) Anti-oxidant Max 200ppm Ascorbyl palmitate (E304) Anti-oxidant Max 150ppm Citric Acid (E330) Acidity Regulator, Anti-Max oxidant, Sequestrant 50ppm 1.5....
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.... 1.12 GRINDSTED PS 222 MB: The processed mono and diglycerides of fatty acid are then mixed with anti-oxidants such as Ascorbic acid, Tocopherol, and Citric Acid, for their added benefits as anti-oxidants. Final Processing 1.13 The subject products may contain di- and triglycerides, free glycerol, free fatty acids etc. Subsequently, the physical processes of distillation, storage, filtration, tube chilling, magnet separation takes place after the chemical reactions are concluded, to get the subject products in its imported form. Packing of Subject Products 1.14 The subject products will be imported in ready to sell packages of 25kg polyethylene/aluminium lined paper bags. Subject products are not a separately defined chemical compound 1.15 As per, 17th Joint FAO/WHO Expert Committee on Food Additive ("JECFA Report") report published in FNP 4 (1978) and in FNP 52 (1992) has analysed mono- and diglycerides INS No. (471). The JECFA report is attached as Exhibit-C. JCEFA Report provides insights on the following :- Definition: A mixture of mono- and diglyceryl esters of long chain, saturated and unsaturated fatty acids that occur in food fats; contain not less ....
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....ny goods prior to its importation or exportation; ... (Emphasis Supplied) 1.23 The questions on which an application for an advance ruling can be made have been provided under Section 28H of the Customs Act. As per the said Section 28H (2) of the Customs Act, an applicant may make an application for advance ruling in respect of questions relating to: a. Classification of goods under the Customs Tariff Act, 1975; ... (Emphasis Supplied) 1.24 The present application is being made by the Applicant to confirm classification of the subject products. 1.25 Therefore, it flows that in the present case, the Applicant is satisfying the following conditions required for filing the application for advance ruling, namely: a. Applicant has been granted a valid Importer-Exporter Code Number (IEC) under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; b. Application for advance ruling is in relation to clause (a) of Section 28H (2) of the Customs Act, 1962. Non-Applicability of Bar under Section 28I 1.26 - Section 28I of the Customs Act, 1962 is set out below: "SECTION 28-I. Procedure on receipt of applic....
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.... CLASSIFICATION OF THE SUBJECT PRODUCTS 1.29 The Tariff is aligned, up to the 6-digit level, with the Harmonized System of Nomenclature ("HSN") issued by the World Customs Organization ('WCO'). It has been held by the Hon'ble Supreme Court in the case of Collector of Customs, Bombay Vs. Business Forms - 2002 (142) ELT 18 that the HSN Explanatory Notes aid in the interpretation of the Headings of the Tariff and may be used as a safe guide for the same. 1.30 The classification of the goods imported into India is to be determined based on the General Rules of Interpretation (hereinafter referred to as the "GRI") set out in the Tariff. As per Rule 1 of the GRI, classification of the imported products shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the remaining Rules of the GRI. 1.31 The subject products are food emulsifying agents. They are a blend of an emulsifier made from palm oil/sunflower oil and certain fats. They are made up of predominantly mono and di glycerides of fatty acid (E471), along with certain antioxidants and other i....
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.... dropping point." (Emphasis supplied) 1.37 On a combined reading of Note 5 (a), Note 1 (b) to Chapter 34 and the HSN Explanatory Notes to heading 3404, the following essential requirements needs to be fulfilled in order to classify a product under the said heading: a. The product must not be a separate chemically defined compound; b. The product must be chemically produced organic product; c. The product must not be covered within the scope of CTH 271; d. The product must have waxy character; e. The product must have a drop melt temperature of above 40℃; f. The viscosity of the product must not exceed 10 Pa.s at 10°C above the drop melting point. 1.38 We analyse the physical and chemical characteristics of the subject product against each of the above conditions, as below. I. The subject product is not a separate chemically defined compound 1.39 The term separate chemically defined compounds has been defined in the Explanatory Notes to the Harmonized System of Nomenclature published by the World Customs Organization (hereinafter to be referred to as "Explanatory Notes") for Chapter 29 (Organic Chem....
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....n between Triglyceride present in palm oil/sunflower oil and glycerol. 2. The product must be an organic product other than separate chemically defined compounds defined under Chapter Note 1 to Chapter 29. The subject products are not separate chemically defined compounds. 3. The product must not be covered within the scope of heading 2712. The subject products are not covered under CTH 2712 as they are not in the nature of Petroleum Jelly, Paraffin Wax, Microcrystalline Petroleum Wax or other mineral waxes mentioned under CTH 2712. 4. The product must have waxy character. The subject products have a waxy appearance. Further, the Applicant confirms that when the subject products are rubbed in hands they shows waxy appearance. 5. The product must have a dropping point temperature of above 40 ℃. The Applicant confirms that the subject products have a dropping point above 40°C . 6. The viscosity of the product must not exceed 10 Pa.s at 10 ℃ above the drop melting point. The Applicant confirms that the subject products viscosity does not exceed 10 Pa.s at 10 ℃ above the drop melting point . Classification of the sub....
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....ylene wax Kg 10% --- Artificial waxes (including water soluble waxes) prepared waxes, not emulsified or containing solvents 34049090 --- Other Kg 10% 1.54 Basis the understanding of the facts and the analysis discussed so far, it is clear that 34049010 and 34049020 are excluded. 1.55 Now moving to the next --- dash i.e. Artificial waxes (including water-soluble waxes ) prepared waxes, not emulsified or containing solvents". The subject product is in the nature of artificial wax, not soluble in water. Further, the product in is as imported form is neither emulsified nor contains solvents. Accordingly, the subject product appears to fall within the scope of "Artificial waxes (including water-soluble waxes) prepared waxes, not emulsified or containing solvents". 1.56 The said entry is further sub-divided under: CTH Description Unit Rate of Duty (1) (2) (3) (4) 34049031 ---- Poly brominated biphenyls Kg 10% 34049032 ---- Poly chlorinated biphenyls Kg 10% 34049033 ----Poly chlorinated terphenyls Kg 10% 34049039 ---- Other Kg 10% 1.57 The subject p....
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....utritional value of food. Emulsifier E471 helps maintain eating quality, extends shelf life and reduces waste. Product Benefits: * Good thickening, emulsifying, anti-caking, and preservative agent. * White, odourless powder. Product Applications: * Improves stability and aeration of cake batters, fillings and toppings. * Gives ice cream, whipped cream and similar products a smoother texture. https://www.atamanchemicals.com/e-471 u26803/ DESCRIPTION: Mono- and diglycerides of fatty acids (E471) refers to a naturally occurring class of food additive composed of diglycerides and monoglycerides which is used as an emulsifier. The E471 bakery emulsifier is a palm based food additive that is composed of two molecules known as glyceryl monostearate and glyceryl distearate. III. From the above, it appears that E-471 is a mixture of glyceryl monostearate and glyceryl distearate. However, the importer has stated that the subject products are not a separately defined chemical compound. There is a specific entry for Glyceron monostearate under Tariff Item 29157030. However, the HSN explanatory notes to 29....
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.... 'as-imported' condition for the purpose of trading without subjecting them to any further processing. 4.1 The Applicant proposes to classify the subject products under Customs Tariff Item (hereinafter referred to as "CTI") 3404 90 39 of the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as "Customs Tariff") chargeable to Basic Customs Duty (hereinafter referred to as "BCD") @ 10%, Social Welfare Surcharge (hereinafter referred to as "SWS") @10% of the aggregate of the BCD and Integrated Goods and Services Tax (hereinafter referred to as "IGST") @18% in terms of SI. No. 62 of Schedule III of IGST Notification No. 01/2017 - Integrated Tax (Rate) dated 28.06.2017 (hereinafter referred to as "Notification No. 01/2017"). Comments by the Ld. Joint Commissioner of Customs, Gr. II (C-F), NS-I, JNCH, Nhava Sheva, Mumbai, Customs Zone-Il 4.2 Vide letter dated 11.11.2024 issued by the Ld. Joint Commissioner of Customs, Gr. II (C- F), NS-I, JNCH, Nhava Sheva, Mumbai, Customs Zone-Il (hereinafter referred to as "Ld. Jt. Commissioner"), has provided his comments on the Advance Ruling Application filed by the Applicant. In the said letter dated 11.11.202....
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....In a single unit process, the said triglyceride is made to react with glycerol in an equilibrium transesterification reaction which yields mono- and diglycerides. The diglycerides so obtained is further reacted with glycerol in a similar reaction to obtain two mono glycerides. These mono- and diglycerides are the pre- dominant ingredient in the two subject products. 4.7 These mono- and diglycerides are then mixed with other ingredients like antioxidants and acidity regulators as specified in the product-specific tables above, depending upon the result desired. After the chemical process to the above extent are concluded, the products are subjected to physical processes of distillation, storage, filtration, tube chilling and magnet separation to get the product in its 'as-imported' condition. 4.8 It is submitted that the subject products have a waxy appearance, reliance for the same is placed on the JECFA Report enclosed with the AAR Application as Exhibit-C, which describes mono- and diglycerides as "White- or cream-coloured hard fats of waxy appearance.". The same is also discussed in para A.20 and 2.12 of the AAR Application. 4.9 The subject products pre-dominant....
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....emically defined compounds; or c. ...." "Chapter Note 5. In heading 3404, subject to the exclusions provided below, the expression "artificial waxes and prepared waxes" applies only to: a. Chemically produced organic products of a waxy character, whether or not water- soluble; b. ..... c. products of a waxy character with a basis of one or more waxes and containing fats, resins, mineral substances or other materials ... " HSN EN to CTH 3404: This heading covers artificial waxes (sometimes known in industry as "synthetic waxes") and prepared waxes, as defined in Note 5 to this Chapter, which consist of or contain relatively high molecular weight organic substances and which are not separate chemically defined compounds. These waxes are : (A) Chemically produced organic products of a waxy character, whether or not water- soluble. Waxes of heading 27.12, produced synthetically or otherwise (eg. Fischer-Tropsch waxes consisting essentially of hydrocarbons) are, however, excluded. Water-soluble waxy products having surface-active properties are also excluded (heading 34.02). (B) .... (C) Products of a waxy cha....
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....ibrium transesterification contain a carbon-hydrogen bond, as is apparent from a perusal of the chemical structure of the subject products. A carbon-hydrogen bond being present in a product is a characteristic of that product being an organic product. Reliance in this regard is placed on the definition of an "organic compound" as outlined by Britannica Technical Dictionary which is extracted below: "organic compound, any of a large class of chemical compounds in which one or more atoms of carbon are covalently linked to atoms of other elements, most commonly hydrogen, oxygen, or nitrogen" The product must not be covered within the scope of CTH 2712 CTH 2712 covers "Petroleum, Jelly, Paraffin Wax, Microcrystalline Petroleum Wax or other mineral waxes". A bare perusal of the terminology of the CTH 2712 is apparent to conclude that subject product is out of the scope of the waxes covered by CTH 2712. The subject products are waxy in nature The subject products are waxy in nature. Reliance for the same is also placed on the JECFA Report which describes 'mono- and diglycerides' as "white- or cream-coloured hard fats of waxy appearance". The same is also discussed ....
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.... not been subjected to bromination or chlorination during its manufacturing process and neither does the subject products contain bromine or chlorine in its 'as-imported' condition. The subject products are thus, not classifiable under CTIs 3404 90 31, 3404 90 32, 3404 90 33 and are therefore, correctly classifiable under CTI 3404 90 39. Examination of Classification of the subject products under CTH 3824 4.21 Vide the letter dated 11.11.2024, the Ld. Jt. Commissioner opined that the subject products may either be classified under CTH 3404 or under CTH 3824 relying upon the relevant HSN EN. The Applicant, therefore, shall hereunder examine whether the subject products are classifiable under CTH 3824. 4.22 CTH 3824 covers "Prepared Binders For Foundry Moulds Or Cores; Chemical Products And Preparations Of The Chemical Or Allied Industries (Including Those Consisting Of Mixtures Of Natural Products), Not Elsewhere Specified Or Included". 4.23 Further, the HSN EN to CTH 3824 specifically exclude the mixtures of mono-, di- and triglycerides, fatty acid esters of glycerol which are used as emulsifiers for fats having waxy characteristics. The relevant portion of the ....
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...., Synergist for Sequestrant Max 200ppm Tocopherol (E307) Anti-oxidant Max 250ppm CLASSIFICATION OF THE SUBJECT PRODUCTS 5.3 The Tariff is aligned, up to the 6-digit level, with the Harmonized System of Nomenclature ("HSN") issued by the World Customs Organization ('WCO'). It has been held by the Hon'ble Supreme Court in the case of Collector of Customs, Bombay Vs. Business Forms - 2002 (142) ELT 18 that the HSN Explanatory Notes aid in the interpretation of the Headings of the Tariff and may be used as a safe guide for the same. The classification of the goods imported into India is to be determined based on the General Rules of Interpretation (hereinafter referred to as the "GRI") set out in the Tariff. As per Rule 1 of the GRI, classification of the imported products shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the remaining Rules of the GRI. 5.4 Given the waxy character, the product could be classified under Chapter 34, which covers, inter-alia, Artificial Waxes and Prepared Waxes. Under Chapter 34, the relevant cust....
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.... a. The product must not be a separate chemically defined compound; b. The product must be chemically produced organic product; c. The product must not be covered within the scope of CTH 271; d. The product must have waxy character; e. The product must have a drop melt temperature of above 40℃; f. The viscosity of the product must not exceed 10 Pa.s at 10℃ above the drop melting point. 5.5.4 In view of the above, as the subject product fulfils all the conditions mentioned in Note 1(b), and Note 5 to the Chapter 34, hence the subject products merits classification under CTH 3404. Now, coming to the 6 and 8 digit classification, reliance must be placed on GRI Rule 6 which states that "The classification of goods in the sub-headings of a heading shall be determined according to the terms of those sub-headings and any related sub-heading Notes and, mutatis mutandis, to the above rules, on the understanding that only sub-headings at the same level are comparable. For the purposes of this rule the relative Section and Chapter Notes also apply, unless the context otherwise requires". 5.5.5 Therefore, upon application ....
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.... its production. We understand that the subject product in its 'as imported' form contains neither bromine nor any chlorine. Thus, the subject product is not classifiable under CTIs 34049031, 34049032 or 34049033. Hence, the subject product merits classification under CTI 3404 90 39. 5.6 As per the comments of the Port Commissionerate, the Mono- and diglycerides of fatty acids based bakery emulsifier is a palm based food additive that is composed of two molecules known as glyceryl monostearate and glyceryl distearate. 5.6.1 Mono- and diglycerides of fatty acids (E471) refers to a naturally occurring class of food additive composed of diglycerides and monoglycerides which is used as an emulsifier. The E471 bakery emulsifier is a palm based food additive that is composed of two molecules known as glyceryl monostearate and glyceryl distearate. From the above, it appears that E-471 is a mixture of glyceryl monostearate and glyceryl distearate. However, the importer has stated that the subject products are not a separately defined chemical compound. 5.6.2 Even though there is a specific entry for Glyceron monostearate under Tariff Item 29157030., as per the HSN explanat....
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....hich describes 'mono- and diglycerides' as "white- or cream-coloured hard fats of waxy appearance". The same is also discussed at para A.20 and 2.12 of the AAR Application. The product must have a drop melt temperature of above 40℃ and viscosity not exceeding 10 Pas at 10°C above the drop melting point Both the subject products have been tested at the Grindsted Plant of Danisco Malaysia Sdn. Bhd, which is accredited to BRCGS, Global Standard for Food Safety Issue 9 in Denmark. The said test report certifies that the following 2. Grindsted PS 222 MB- Dropping point- 63℃ Viscosity-0.026 Pas when measured at temperature of 10℃ above its dropping point. 3. GRINDSTED PS 421 Dropping point- 56℃ Viscosity-0.031 Pas when measured at temperature of 10℃ above its dropping point Reliance is accordingly placed on the test reports dated 19.11.2024 and 21.11.2024. 5.7.1 In light of the above, it is submitted that the subject products fulfil all the conditions set forth by the combined reading of Chapter Note 1(b) and 5(a) to Chapter 34 and the HSN EN to be adequately covered under CTH 3404. Further, as the subject products h....