AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 1750
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....ts (emulsions) from ingredients which, because of fundamental differences in their physical and chemical properties, are immiscible. Details of Manufacturing Process 1.3 The subject product is made from converting edible fully hydrogenated palm oil into beads form. Hydrogenation is done by using nickel as the catalyst. The physical processes of filtration, spray cooling, magnet separation takes place to get the subject product in its imported form. STIE Composition of Subject Products 1.4 The subject product is made of triglycerides. Properties of subject product 1.5. The subject product showcases the following properties Property Description Form Beads Physical state Solid Colour White Odor No Odor Form of packaging 1.6 The subject product will be imported in ready to sell packages of 25kgs. APPLICANT'S ELIGIBLITY FOR ADVANCE RULING 1.7 In order to file an application before the Authority for Advance Ruling, the Applicant must satisfy the conditions prescribed under the Customs Act, 1962 (hereinafter referred to as 'Customs Act'). 1.8 Provisions relating to Advance Ruling are prescribed under Chapter VB of the....
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....after examining the application and the records called for, by order, either allow or reject the application : Provided that the Authority shall not allow the application [ * * *] where the question raised in the application is - (a) already pending in the applicant's case before any officer of customs, the Appellate Tribunal, or any Court; (b) the same as in a matter already decided by the Appellate Tribunal or any Court : Provided further that no application shall be rejected under this sub-section unless an opportunity has been given to the applicant of being heard : Provided also that where the application is rejected, reasons for such rejection shall be given in the order." 1.15 Thus, the conditions set out in Section 28I are satisfied as: a. the question raised in the present application regarding classification of GRINDSTED PS 101-M is not pending in the applicant's own case before any officer of customs, the Appellate Tribunal, or any Court; b. the question raised in the present application regarding classification of GRINDSTED PS 101-M is not a matter already decided by the Appellate Tribunal or any Court ....
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....otherwise require, according to the following provisions." 1.21 In this regard, considering the product is made of tri-glycerides, the Chapter 15 first schedule of the Customs Tariff Act becomes relevant. CTH Description Unit Rate of Duty (1) (2) (3) (4) 1516 Animal, vegetable or microbial fats and oils and their fractions, partly or wholly hydrogenated, inter-esterification or elaidinised, whether or not refined, but not further prepared 1516 10 00 - Animal fats and oils and there fraction Kg 100% 1516 20 -Vegetable fats and oils and their fractions Kg 100% 1516 30 00 -Microbial fats and oils and their fractions Kg 100% 1.22 Chapter Notes from Chapter 15 of the Customs Tariff becomes relevant on application of GRI 1. The same has been reproduced hereinunder. (A) This Chapter covers (1) Animal, vegetable or microbial fats and oils, whether crude, purified or refined or treated in certain way (e.g., boiled, sulphurised or hydrogentated) (2) **** (3) **** 1.23 Further, General Explanatory Notes to heading 1516 covers "animal, vegetable or microbial fa....
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....erstanding 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". 1.27 Therefore, upon application of GRI Rule 6 read with GRI Rule 1, the classification of the subject product must be determined according to the terms of sub-headings. In view of the above, reference must be made to the description mentioned at sub-heading level. 1.28 It is also pertinent to mention that as per GRI, descriptions of the goods provided under "-"(single dash) are first to be considered for sub-classification under a heading first, before proceeding to further classify under "- - " (double dash). Articles whose description are preceded by a " --- " (triple dash) or " --- -" (quadruple dash) are sub-classifications of the immediately preceding single dash or double dash, as the case may be. 1.29 Therefore, the classification of the subject product must be first determined at the single-dash level. In this regard, it is evident that CTH 1516, has been sub-divided into: CTH Description Unit Rate of Duty (1) (2) (3) (4) 1516 10 00 - Animal fats an....
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....stribution and Department of Economic Affairs. It is clarified that the term 'vegetable oils of edible grade' will cover vegetable oils which are fit for human consumption after further processing. The benefit of duty exemption is admissible so long as the oils imported is used for edible purposes, even after refining. Pending cases of assessment may be finalized on the basis of above clarification 1.35 The subject product is of edible grade, as it is intended use is in the food industry as an emulsifier. Hence, merits classification under CTI 1516.20.91 ISSUES REQUIRING ADVANCE RULING AND APPLICANT'S UNDERSTANDING In light of the aforementioned submissions, the Applicant's interpretation of the questions raised will be as under: a Question: Whether the subject product in question in the present application is classifiable under Tariff Item 1516 20 91? Applicant's Understanding: Yes. b) Question: If the answer to the above question is in the negative, then what would be the correct classification of the products mentioned above under the Customs Tariff of India? Comments of the Port Commissionerate 2 The application was ....
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....g 2106. Further, from the note (14) of heading 2106, it may be observed that products which consist of plants or its parts such as seeds and mixed with other substances such as other plant extracts, which are not consumed as such, but which are claimed to offer relief from ailments or contribute to general health and well-being falls under the heading CTH 2106. Hence, it is apparent that the products are rightly classifiable under heading 2106. Point 3 v). As per available records in the assessment group, the matter is not pending before any officer of Customs, the Appellate Tribunal or any Court. Personal Hearing 3. The Personal hearing in the matter was conducted on 17.12.2024 wherein the authorized representative of the applicant attended the same and reiterated the same which were already submitted with the application of the applicant. Additional Submission 4.1. M/s Danisco India Pvt. Ltd. (hereinafter referred to as 'Applicant') inter alia deals in food preparations, additives, enzymes and other bioproducts. 4.2. The Applicant has filed an application for Advance Ruling dated 24.09.2024 (hereinafter referred to as the "AAR Application") proposing ....
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....Triglycerides'. The subject product prevents oiling out in fat containing products, e.g. peanut butter, margarine, spreads etc. The subject product has high oil-binding capacity and is delivered in beads form. 4.8. For ease of reference, the chemical composition and the physical property of the subject product is captured below: PARTICULARS DESCRIPTION QUANTITY Ingredient Glycerides, C16-18 (CAS No. 68002-71-1) 95 - 100% Form Beads - Physical State Solid - Colour White - Odor No Odor - Water Solubility Insoluble in Water - Details of Manufacturing Process 4.9. To describe the entire process briefly, Palm Oil which is in the nature of a triglyceride, is the raw material used for the manufacture of the subject product. Palm Oil is subjected to Full Hydrogenation and is then converted into edible grade beads form. The product so obtained is subjected to physical processes of filtration, spray cooling, magnet separation to get the product in its 'as-imported' condition and can be termed "Fully Hydrogenated Palm-based Triglycerides". 4.10. The subject product is pre-dominantly composed of triglyceride....
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....ant Harmonised System of Nomenclature Explanatory Notes (hereinafter referred to as "HSN EN") which have been held to be a safe guide for the determination of the correct classification in a catena of judgments, are extracted below for ready reference: HSN EN to Chapter 15 GENERAL: (A) This Chapter covers: 1. Animal, vegetable or microbial fats and oils, whether crude, purified or refined or treated in certain ways (eg. boiled, sulphurised or hydrogenated) ............ HSN EN to CTH 1516: This heading covers animal, vegetable or microbial fats and oils, which have undergone a specific chemical transformation of a kind mentioned below, but have not been further prepared. The heading also covers similarly treated fractions of animal, vegetable or microbial fats and oils. A. Hydrogenated fats and oils. Hydrogenation, which is effected by bringing products into contact with pure hydrogen at a suitable temperature and pressure in the presence of a catalyst (usually finely divided nickel), raises the melting points of fats and increases the consistency of oils by transforming unsaturated glycerides (e.g., of oleic, linoleic, ....
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.... (d) should not be worked further than the processes outlined in the HSN EN. 4.16. In light of the above, it is submitted that the subject product fulfils all the conditions set forth by the combined reading of the terminology of Chapter 15, CTH 1516, and the HSN EN to CTH 1516 to be adequately covered under CTH 1516 in the following manner: Condition Manner in which the subject-product satisfies the condition the product should be an 'animal, vegetable or microbial fat or oil' The product is based on palm fat/oil. Reliance for the same is placed on the product description sheet which describes the subject product as "GRINDSTED PS 101-M which consists of edible, fully hydrogenated, vegetable triglycerides in beaded form". It is apparent that the subject product is a "vegetable triglyceride". the subject product can either be crude, purified or refined or treated in certain ways (eg. boiled, sulphurised, inter-esterified, re- esterified, elaidinised or hydrogenated) The subject product is "hydrogenated". The same is discussed in the manufacturing process hereinabove, under the manufacturing process in the AAR Application and reliance for the same is also....
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....nbsp; Description of Goods Rate of Duty 1516 20 - Vegetable fats and oils and their fractions: --- Cotton Seed oil: --- Groundnut oil: --- Hydrogenated castor oil (opal-wax): --- Other: 1516 20 91 --- Edible Grade 100% 1516 20 99 --- Other 100% 1516 30 00 - Microbial fats and oils and their fractions 4.20. Further, it is submitted that under the CTSH 1516 20, the subject product is most appropriately covered under the 'triple-dash' entry bearing the term "Other:" as the subject product is not in the nature of "Cotton Seed oil", "Groundnut oil", "Hydrogenated castor oil (opal-wax)". 4.21. The said entry is further categorised in two " ---- " (quadruple dash) entries which cover the products, namely, "Edible Grade" and "Other". It is submitted that the subject product is correctly covered under the "Edible Grade" entry. Reliance for the same is placed on Circular bearing F. No. 528/27/97-Cus. (TU) (Circular No. 29/97) dated 31.07.1997 issued by the Ministry of Finance, De....
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....(including seeds or fruits) of a single or of different species mixed with other substances such as one or more plant extracts, which are not consumed as such, but which are of a kind used for making herbal infusions or herbal "teas", (e.g., those having laxative, purgative, diuretic or carminative properties), including products which are claimed to offer relief from ailments or contribute to general health and well- being." 4.26. It is submitted in this regard that even upon a bare perusal of the HSN EN to CTH 2106 and GRIs, it is apparent that the subject product is not covered under the scope of CTH 2106. The very first HSN EN to CTH 2106 prescribes that "provided that they are not covered by any other heading of the Nomenclature, this heading covers :. .". It is submitted in this regard that the subject product is more specifically covered under CTH 1516 as "vegetable fat/oil, wholly hydrogenated and not further prepared of edible grade". It is trite law that the heading which provides a more specific description of the product shall be preferred over the heading which provides a more general description of the product. 4.27. Further, the said principle also finds statut....
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....s which, because of the fundamental differences between each other are immiscible without the presence of the said emulsifiers. The subject product, which is used a food emulsifying agent, is pre-dominantly composed of 'Fully Hydrogenated Palm-based Triglycerides'. The physical processes of filtration, spray cooling, magnet separation takes place to get the subject product in its imported form. The subject product prevents oiling out in fat containing products, e.g. peanut butter, margarine, spreads etc. The subject product has high oil- binding capacity and is delivered in beads form. For ease of reference, the chemical composition and the physical property of the subject product is captured below: PARTICULARS DESCRIPTION QUANTITY Ingredient Glycerides, C16-18 (CAS No. 68002-71-1) 95 - 100% Form . Beads - Physical State Solid - Colour White - Odor No Odor - Water Solubility Insoluble in Water - 5.2 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....
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....for sub-classification under a heading first, before proceeding to further classify under "- - " (double dash). Articles whose description are preceded by a " --- " (triple dash) or " ---- " (quadruple dash) are sub-classifications of the immediately preceding single dash or double dash, as the case may be. 5.4 Chapter Notes from Chapter 15 of the Customs Tariff becomes relevant on application of GRI 1. The same has been reproduced hereinunder. (A) This Chapter covers (1) Animal, vegetable or microbial fats and oils, whether crude, purified or refined or treated in certain way (e.g., boiled, sulphurised or hydrogenated) (2) **** (3) **** 5.4.1 Further, General Explanatory Notes to heading 1516 covers "animal, vegetable or microbial fats and oils, which have undergone a specific transformation of a kind below, but not been further prepared". In regards to "specific transformation", General Explanatory Notes to heading 1516 provides following processes. (A) Hydrogenated fats and oils Hydrogenation, which is effected by bringing the products into contact with pure hydrogen at a suitable temperature and pressure in the presenc....
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....sp; --- Cotton seed oil Kg 10% --- Groundnut oil Kg 10% --- Hydrogenated castor oil (opal wax) --- Other Kg 10% 5.4.4 Further, it is submitted that under the CTSH 1516 20, the subject product is most appropriately covered under the 'triple-dash' entry bearing the term "Other:" as the subject product is not in the nature of "Cotton Seed oil", "Groundnut oil", "Hydrogenated castor oil (opal-wax)". 5.4.5 As the subject product is made of palm oil, the subject product will fall under the residuary entry reading "Other". Now moving to the next " ---- " dash i.e. CTH Description Unit Rate of Duty (1) (2) (3) (4) 1516 20 91 ---- Edible Grade Kg 100% 1516 20 99 ---- Other Kg 100% 5.4.6 The said entry is further categorised in two " ---- " (quadruple dash) entries which cover the products, namely, "Edible Grade" and "Other". It is submitted that the subject product is correctly covered under the "Edible Grade" entry. Reliance for the same is placed on Circular bearing F. No. 528/27/97-Cus. (TU) (Circular No. 29/....
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....the letter dated 10.12.2024, the Port Commissionerate has opined that the subject product is correctly classifiable under CTH 2106 by placing reliance upon Explanatory Note No. 16 of the HSN EN to CTH 2106. HSN EN No. 16 to CTH 2106 is extracted below for ready reference: HSN EN to CTH 2106: "(16) Preparations, often referred to as food supplements or dietary supplements, consisting of, or based on, one or more vitamins, minerals, amino acids, concentrates, extracts, isolates or the like of substances found within foods, or synthetic versions of such substances, put up as a supplement to the normal diet. It includes such products whether or not also containing sweeteners, colours, flavours, odoriferous substances, 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." 5.7.1 As per Explanatory note (16) of heading 2106, food supplements or dietary supplements consisting of or based on extracts put up as a supplement to the normal diet fal....
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....ion shall be effected as follows: (a) the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, 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. 5.8 Coming to analyse the HSN Explanatory Notes to Chapter 15 as given below: GENERAL: (B) This Chapter covers: 2. Animal, vegetable or microbial fats and oils, whether crude, purified or refined or treated in certain ways (eg. boiled, sulphurised or hydrogenated) ......... HSN EN to CTH 1516: This heading covers animal, vegetable or microbial fats and oils, which have undergone a specific chemical transformation of a kind mentioned below, but have not been further prepared. The heading also covers similarly treated fractions of animal, vegetable or microbial fats and oils. B. Hydrogenated fats and oils: Hydr....
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....;animal, vegetable or microbial fat or oil'; and (b) can either be crude, purified or refined or treated in certain ways (eg. boiled, sulphurised, inter-esterified, re-esterified, elaidinised or hydrogenated); and (c) the subject product should involve only one fat/oil; and (d) should not be worked further than the processes outlined in the HSN EN. 5.8.2 In light of the above, it is submitted that the subject product fulfils all the conditions set forth by the combined reading of the terminology of Chapter 15, CTH 1516, and the HSN EN to CTH 1516 to be adequately covered under CTH 1516 in the following manner: Condition Manner in which the subject-product satisfies the condition the product should be an 'animal. vegetable or microbial fat or oil' The product is based on palm fat/oil. Reliance for the same is placed on the product description sheet which describes the subject product as "GRINDSTED PS 101-M which consists of edible, fully hydrogenated, vegetable triglycerides in beaded form". It is apparent that the subject product is a "vegetable triglyceride". the subject product can either be crude, purified or refined or tr....