AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 1754
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....ifiers. 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. The only difference the two being that DIMODAN HP-M is in bead form and DIMODAN HP 75/B FF MB is in powder form in as imported condition. Details of Manufacturing Process 1.3. Palm oil is the raw material used for the manufacturing of mono and diglycerides of fatty acids. Palm oil, being a vegetable oil acts as a source of triglycerides for the preparation of subject products. 1.4. During the manufacturing process, triglycerides react with glycerol, in an equilibrium transesterification reaction that yields monoglycerides and diglycerides. Further, Diglycerides again reacts with Glycerol molecules to produce monoglycerides. The subject product also contain di- and triglycerides, free glycerol, free fatty acids etc. that are manufactured during the chemical reaction. 1.5. The physical processes of Distillation, Storage, Filtration, Tube chilling, magnet separation take place after the chemical reactions are concluded, to get the subject products in their as imported form.....
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....s Property Description Form Fine powder, Beads Physical state Solid Colour White Odor No Odor Water solubility <Insoluble in water> Form of packaging 1.9. DIMODAN HP-M and DIMODAN HP 75/B FF MB will be imported in ready to sell packages of 25kgs and 15 Kgs respectively in foil lined paper bags. Subject product is not a separately defined chemical compound 1.10. The 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). 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 than 30% of alpha-monoglycerides and may also contain other isomeric monoglycerides, as well as di- and triglycerides, free glycerol, free fatty acids, soap and moisture; usually manufactured by the glycerolysis of edible fats and oils, but may also be prepared by esterification of fatty acids with glycerol, with or without molecular distillation of the product. Structural Formula....
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.... 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 1.19. The present application is being made by the Applicant to confirm classification of the subject products. 1.20. 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 have 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 1.21. Section 28I of the Customs Act, 1962 is set out below: "SECTION 28-I. Procedure on receipt of application. - (1) On receipt of an application, the Authority shall cause a copy thereof to be forwarded to the [Principal Commissioner of Customs or Commi....
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.... 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. 1.26. 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. 1.27. Given that it has a wax appearance, it may be classified under Chapter 34, which covers, inter-alia, Artificial Waxes and Prepared Waxes. Under Chapter 34, the relevant customs tariff heading ("CTH") that is most relevant to the classification of the subject product is CTH 34.04, which concerns Artificial waxes....
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....oint. 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 1.33. 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 Chemicals). For ease of reference the relevant definition is reproduced below: (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. 1.34. As already mentioned, JECFA Report provides that the subject product is not a chemically defined compound due to the presence of residual mono- and diglycerides and glycerol. II. Subject product is waxy in nature 1.35. Additionally, the J....
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....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. 5. The product must have a dropping point temperature of above 40 ℃. 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 subject product viscosity does not exceed 10 Pa.s at 10 ℃ above the drop melting point 1.42. Further, General Explanatory Note to 34.04 provides a list of waxes which is excluded from the chapter. Relevant portion have been extracted below Apart from the exclusions mentioned above the heading does not cover: (a) *** (f) Mixtures of mono, di- and tri-, fatty acid ester of glycerol, not having the character of waxes are (38.24) 1.43. In view of the above, as the subject product fulfils all the conditions mentioned in Note 1(b), Note 5 to the Chapter 34 and the General Explanatory Notes to heading 3404, hence the subject product merits classification under CTH 3404. Classification of the subject product under CTH 3404 ....
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.... --- Artificial waxes (including water soluble waxes ) prepared waxes, not emulsified or containing solvents 34049090 --- Other Kg 10% 1.51. Basis the understanding of the facts and the analysis discussed so far, it is clear that 34049010 and 34049020 are excluded. 1.52. 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". 1.53. 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% 1.54. The subject product has not undergone brominati....
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....cluded (heading 34.04). It appears that the imported product may be either classifiable under CTH 38.24 or 34.04 depending on whether it meets the character of artificial waxes or otherwise. The compliance of the imported product to the various explanatory notes to CTH 34.04 need to be examined. 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 13.12.2024 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") proposing to import the products "DIMODAN HP-M and DIMODAN HP 75/B FF MB"; (hereinafter referred to as the "subject products"). The applicant intends to ....
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.... PARTICULARS DESCRIPTION QUANTITY Ingredient Mono and diglycerides of fatty acids (E471) Approx 90 to 100% Form Fine Powder, Beads - Physical State Solid - Colour White - Odour No odour - Water Solubility Insoluble in Water - Details of Manufacturing Process 4.7. To describe the entire process briefly, Palm oil is the raw material used for the manufacturing of mono and diglycerides of fatty acids (E471) ['E' numbers are unique numbers assigned to various kinds of food additives approved for use in the European Union by the European Commission after due tests and screenings conducted by the European Food Safety Authority. Additives are provided unique numbers as a standard, enabling the manufacturers and traders to satisfy the applicable labelling requirements and the consumers to make an informed choice.]. Palm Oil being vegetable oil, acts as a source of triglycerides for the preparation of subject products. 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 furth....
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.... 34, which covers, inter alia, "Artificial Waxes and Prepared Waxes" under Customs Tariff Heading (hereinafter referred to as "CTH") 3404. 4.13. Further, relevant Chapter Notes and 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: "Chapter Note 1 This Chapter does not cover: (a) .... (b) separate chemically 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 o....
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.... The mono and di-glycerides so obtained from the reaction of equilibrium 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 [Noller, Carl R., Norman, Richard O.C. and Usselman, Melvyn C .. "organic compound". Encyclopedia Britannica, 25 Oct. 2024, https://www.britannica.com/science/organic-compound. Accessed 22 November 2024.] 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 271....
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....ly chlorinated terphenyls 10% 3404 90 39 ---- Other 10% 4.20. It is submitted that the subject products have not been subjected to bromination or chlorination during its manufacturing process and neither does the subject product contain bromine or chlorine in its 'as-imported' condition. The subject products are thus, not classifiable under CTI 3404 90 31, 3404 90 32, 3404 90 33 and is therefore, correctly classifiable under CTI 3404 90 39. Examination of Classification of the subject products under CTH 3824 4.21. Vide the letter dated 02.12.2024, 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, ....
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.... above, it can be understood that mono and diglycerides are not a chemically defined compound due to the presence of different isomers of mono as well as di- and triglycerides, free glycerol etc. Additionally, there is not a fixed chemical formula of the mono and diglycerides, as "-OCR" being the fatty acid moiety is not fixed. CLASSIFICATION OF DIMODAN HP-M and DIMODAN HP 75/B FF MB 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 Not....
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.... 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°C; f. The viscosity of the product must not exceed 10 Pa.s at 10℃ above the drop melting point. 5.5.2 The physical and chemical characteristics of the subject product has been anlysed against each of the aforesaid conditions, as below. a. The subject product is not a separate chemically defined compound: 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 for Chapter 29 (Organic Chemicals). For ease of reference the relevant definition is reproduced below: "(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 sp....
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....e structural diagram for representation of the subject product. The product must not be covered within the scope of heading 2712. The subject products are not covered under CTH 2712 as it is not in the nature of Petroleum Jelly, Paraffin Wax, Microcrystalline Petroleum Wax or other mineral waxes mentioned under CTH 2712. The product must have waxy character. The subject products have a waxy appearance. The product must have a dropping point temperature of above 40 ℃. The subject products have a dropping point above 40°C. The viscosity of the product must not exceed 10 Pa.s at 10 °C above the drop melting point. The subject product viscosity does not exceed 10 Pa.s at 10 ℃ above the drop melting point 5.7 Further, General Explanatory Note to 34.04 provides a list of waxes which is excluded from the chapter. Relevant portion have been extracted below: Apart from the exclusions mentioned above the heading does not cover: (a) *** (f) Mixtures of mono, di- and tri-, fatty acid ester of glycerol, not having the character of waxes are (38.24) 5.8 In view of the above, as the subject product fulfils all the condit....
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....ottle sealing wax) in sticks, cakes or similar forms Kg 10% 34049020 --- Polyethylene wax Kg 10% --- Artificial waxes (including water soluble waxes ) prepared waxes, not emulsified or containing solvents 34049090 --- Other Kg 10% Basis the understanding of the facts and the analysis discussed so far, it is clear that 34049010 and 34049020 are excluded. 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". 5.12 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 terp....
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....no-, di- and triglycerides, free glycerol, fatty acids, moisture etc. The subject products also cannot be defined by a definitive structural diagram due to the bond of the components with "-OCR" which is the chemical formula of fatty acid moiety which is not fixed or constant. Reference is made to the chemical structure of the subject products. Reliance is also placed on the JECFA Report. The product must be chemically produced organic product The mono and di-glycerides so obtained from the reaction of equilibrium 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 ....
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.... 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 HSN is extracted below: "Subject to the above conditions, the preparations and chemical products falling here include: (11) Mixtures of mono-, di- and tri-, fatty acid esters of glycerol, used as emulsifiers for fats. Those which have the character of artificial waxes are, however, excluded (heading 34.04)." 5.18 It is therefore, iterated that as outlined in the foregoing discussion, the subject products are palm oil-based triglycerides which are subjected to equilibrium transesterification reaction to obtain mono- and diglycerides to obtain the final subject products in their 'as-imported' condition. 5.19 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 have not been subjected to bromination or chlorination during its manufacturing process and neither does the subject products contain br....
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....9776 1 554994 6733495 15- 12-2021 LIMITED DANISCO (INDIA) PRIVATE DANISCO AMA MALAYSIA 34019090 452470 DIMODAN HP-M DISTILLED MONOGLYCERIDE 12500 KGS 1.45 USD 1396881 75 433374.2 139588 4 7106657 17-01-2023 LIMITED DANISCO (INDIA) PRIVATE DANISCO ALA MALAYSIA 34019090 452470 DIMODAN HP-M DISTILLED MONOGLYCERIDE 12500 KGS 1.45 USD 1367151 4235414 116715.1 273156 8 7199512 23-01 2023 LIMITED DAN ISCO (INDIA) PRIVATE DANISCO MIA MALAYSIA 34019090 452470 DIMODAN HP-M DISTILLED MONOGLYCERIDE 25000 KGS LA5 USD 2730676 8459615 273067.6 7440970 10-02-3022 LIMETED DANSCO (INDIA) PRIVATE DANISCO MIA MALAYSIA 34019090 457470 DISTILLED MONOSLYCERIDE DIMODAN HA-M 25000 KGS 1.45 USD 2746588.5 851017.1 214698.9 SAKSAA 1 7441025 10-02-2022 UMITED DANSCO (INDIA) PRIVATI DANISCO MA MALAYSIA 34019090 452470 DISTILLED MONOGLYCERIDE DIMODAN HP-M 75000 KGS 1.45 USD 2747001.5 851021.7 274700 4 22-02-2022 LIMITED DANISCO (ENTRA) PRIVATE DANISCO MIA MALAYSIA 34019090 452470 DISTILLED MONOGLYCERIDE DIMODAN HP-M 25000 KGS 1.45 USD 2757878.5 854390 8 275787.9 551024 1 7634546 24-02-2022 LIANITID DANISCO (INDIA) PRIVATE DANISCO MA MALAYSIA 34049090 452470 DISTILLED MONOGLYCERIDE DIMODAN H....