TaxTMI 
TaxTMI 
2026 (9) TMI 1676
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....eed Extract". 2. Question(s) on which Advance Ruling is required: Whether the imported products, namely Pine Bark Extract and Grape Seed Extract, merit classification under Customs Tariff Item (CTI) 1302 19-19 of the Customs Tariff Act, 1975? 3. Applicant's eligibility for Advance Ruling: The applicant holds a valid IEC No. AAVFJ3643B and therefore qualifies as an "applicant" under Section 28E(c) of the Customs Act' 1962. The question on which the advance ruling is sought is in respect of classification of goods under the Customs Tariff Act' 1975 which is admissible under Section 28H (2) (a). The relevant Section of the Customs Act 1962 has been reproduced below: Section 28E. Definitions. - (c) "applicant" means any person, - (i) holding a valid Importer-exporter Code Number granted under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; or Section 28H. Application for advance ruling. - (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and in such manner and accompanied by such fee as may be prescribed, stating the question on whic....
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.... imported by the Applicant bears the scientific name as 'Pinus Gerardiana Bark Extract' which is a botanical extract derived from pine bark. 4.6 The product is obtained through a 'multi-stage extraction and concentration process', as explained below, which does not involve any chemical synthesis and is limited to physical and solvent-based separation of soluble botanical constituents. I. Details of the manufacturing process: 4.7 The manufacturing process commences with the receipt and inspection of raw pine bark, which is examined to ensure that it is free from fungal growth, foreign matter, and excess moisture. Only raw material conforming to prescribed quality parameters, including moisture content below acceptable limits of usually 10%, is approved for further processing. 4.8 Upon approval, the pine bark is subjected to grinding, whereby it is reduced to a fine powder with a particle size ranging approximately between 0.1 mm and 0.3 mm, in order to facilitate efficient extraction of soluble botanical constituents. 4.9 The powdered pine bark is thereafter transferred into an extraction vessel, where a mixture of ethanol and water is added as the ext....
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....1, in its imported form. The said subject good is imported in powder form as a concentrated botanical extract and is not presented or packaged for retail sale or direct consumer use. Upon importation, it undergoes further downstream industrial processing, including purification, standardisation, and blending, as required, and is thereafter supplied as a raw material/input to nutraceutical bulk manufacturers. 4.17 It is further pertinent to clarify that Subject Good No. 1, in the condition in which it is imported, is not fit for direct human consumption. The product is exclusively intended for use in an industrial manufacturing chain, wherein nutraceutical manufacturers utilise the same as an ingredient for further formulation into finished dietary supplements, nutraceutical products, of. allied preparations. Such subsequent formulations are marketed for their antioxidant and supplemental benefits. 4.18 Thus, the imported product retains the character of an industrial raw material meant for further processing and manufacture, and not that of a ready-to-consume dietary preparation at the stage of importation. B. Product Description [Subject Good No. 2]: 4.19 Grape Seed Ex....
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....alysis and recovery of the purified extract, ensuring consistency and standardisation of the product. 4.27 Following resin purification, the extract is adjusted to a specified concentration level, so as to ensure uniformity prior to drying. The adjusted liquid concentrate is then subjected to spray drying using a high-speed spray dryer, with an inlet temperature of approximately 220℃ and an outlet temperature of approximately 95℃, resulting in the formation of a dry powder. 4.28 The spray-dried powder is subsequently sieved to remove agglomerates and to ensure uniform particle size. On an average, approximately 10 kilograms of raw grape seeds yields about 1. kilogram of finished Grape Seed Extract, the balance quantity comprising insoluble residue and process waste removed during extraction and filtration stages. 4.29 The finished Grape Seed Extract powder is then packed in inner packaging followed by outer packaging and stored under suitable conditions until dispatch. In the form and condition in which it is imported, the product is a concentrated botanical extract intended exclusively for use as a raw material by nutraceutical manufacturers and is not suitabl....
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.... which they are imported. Accordingly, the Applicant seeks a definitive ruling from the Hon'ble Authority regarding the correct classification of the subject goods. Statement containing HSN classification analysis: C. Classification of subject goods under CTH 1302: 4.36 At the outset, the Applicant respectfully submits that the issue involved in the present application pertains primarily to the correct classification of the imported goods under the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as "CTA, 1975"). It is submitted that classification of goods under the CTA, 1975 is required to be determined strictly in accordance with the statutory framework prescribed therein, read with the principles embodied in the General Rules for the Interpretation of Import Tariff (hereinafter referred to as "GRI"). 4.37 The Applicant submits that the scheme of classification under the CTA, 1975 is based on the internationally accepted Harmonized System of Nomenclature (hereinafter referred to as "HSN"), along with the relevant Section Notes, Chapter Notes and Explanatory Notes of the CTA 1975, which collectively form the legal and interpretative basis fo....
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.... with the settled principle that goods not specifically covered under a particular sub- heading are to be classified under the appropriate residuary sub-entry within the same heading. 4.42 Furthermore, reliance is placed on the Harmonized System of Nomenclature (hereinafter referred to as the "HSN") Explanatory Notes issued by the World Customs Organization (hereinafter referred to as the "WCO"), which constitute a persuasive and internationally recognised aid to the interpretation of tariff entries. The Explanatory Notes to Customs Tariff Heading 1302 specifically clarify the scope and coverage of the said heading. It is expressly elucidated therein that Heading 1302 covers vegetable saps and extracts. 4.43 The term 'vegetable saps' as stated in the HSN Explanatory notes refers to products obtained from plants through natural exudation or by making incisions in the plant material, whereas the term 'vegetable extracts' refers to products derived from original vegetable materials by processes such as extraction using solvents. The Explanatory Notes further clarify that such extracts remain classifiable under Heading 1302 as long as they are not more specificall....
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.... "Saps are usually thickened or solidified. Extracts may be in liquid, paste or solid form. "Tinctures" are extracts still dissolved in the alcohol by means of which they are extracted; the so-called "fluid extracts" are solutions of extracts in, for example, alcohol, glycerol or mineral oil. Tinctures and fluid extracts are generally standardized (for instance, pyrethrum extract may be standardised by adding mineral oil to produce commercial grades with a standard pyrethrins content of, e.g., 2 %, 20 % or 25 %). Solid extracts are obtained by evaporating the solvent. Inert substances are sometimes added to certain extracts so that they can be more easily reduced to powder (e.g., belladonna extract, to which powdered gum is added), or to obtain a standard strength (for instance, certain quantities of starch are added to opium in order to obtain a product containing a known portion of morphine). The addition of such substances does not affect the classification of these solid extracts. However, extracts may not be subjected to additional extraction cycles or to purification processes, such as chromatographic purification, that increase or decrease certain compounds or compound....
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....ial extraction." 4.49 Accordingly, it is submitted that plant-based extracts derived through conventional extraction methodologies, without undergoing any, chemical modification, alteration, or molecular transformation, squarely continue to fall within the scope and ambit of CTH 1302. 4.50. In the present case, the subject goods are obtained exclusively through a solvent-based extraction process, followed by routine operations such as filtration, distillation, and spray- drying, which are merely physical processes undertaken to concentrate and stabilise the extract, At no stage do these processes result in any chemical change or transformation of the inherent botanical constituents. The extracts thus unequivocally retain their essential character. as vegetable extracts. 4.51 Furthermore, the mere fact that the imported goods are in a highly concentrated form, does not in any manner alter their fundamental nature or classification. The subject goods are predominantly imported and utilised as raw materials by nutraceutical manufacturers for further formulation and processing and are not intended for direct consumption. Consequently, such concentration or potency cannot be mi....
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....s products which are being formulated in specific dosage forms, including powders, granules, tablets, capsules, liquids, jellies, and other similar forms, intended solely for oral administration. 4.56 It is of critical significance that the statutory definition expressly mandates that such products must not qualify as a "drug" within the meaning of the Drugs and Cosmetics Act, 1,940 and the rules framed thereunder, and must not make any claim to cure, treat, mitigate, or prevent any specific disease, disorder, or medical condition. Further, the legislative framework categorically excludes from its ambit any substance which constitutes a narcotic drug or a psychotropic substance as defined under the Narcotic Drugs and Psychotropic Substances Act. 1985 and the rules made thereunder. Thus, the definition under Section 22(b) is narrowly tailored and operates subject to strict statutory exclusions, which cannot be expanded by implication or inference. For the ease of reference, the relevant extract of the provision has been reproduced below: "22. Genetically modified foods, organic foods, functional foods, proprietary foods, etc. Save as otherwise provided under this Act and....
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....nguish them from conventional foods. 4.58 Furthermore, the statute expressly permits such products to be formulated in the form of powders, granules, tablets, capsules, liquids, jellies or other dosage forms meant exclusively for oral administration, while excluding parenteral forms. Pine Bark Extract and Grape Seed Extract being the finished product are commonly manufactured, supplied and utilised in powdered or encapsulated forms, strictly for oral consumption. 4.59 Pine Bark Extract and Grape Seed Extract clearly do not fall within any of these statutory exclusions. The subject extracts do not meet the definition of a "drug", as they are neither intended nor represented for diagnosis, treatment, mitigation or prevention of any disease, nor are they licensed, regulated or marketed as pharmaceutical or traditional medicinal products. Further, they do not make any curative or disease-specific claims and are associated only with general wellness, antioxidant support and maintenance of health, with any such references being generic, non-therapeutic and strictly within the permissible nutraceutical claim framework. 4.60. Additionally, being purely plant-derived botanical extr....
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....ork of the FSSA, 2006. 4.64 In light of the above facts and statutory provisions, it is evident that Pine Bark Extract and Grape Seed Extract are imported solely as raw materials for use in the nutraceutical industry and are not intended for direct human consumption in the form imported. The bulk import, coupled with the explicit label declarations stating that the products are "ingredients for use in the nutraceutical industry as raw material" and "not fit for direct human consumption/retail sale", clearly establishes their intended end-use and commercial identity at the time of import, which is limited to further processing and formulation by nutraceutical manufacturers. 4.65 Accordingly, the use of the subject goods as functional ingredients undergoing further manufacturing processes for conversion into nutraceutical and health supplement products is fully contemplated and permitted under the FSSA, 2006. When read holistically, the statutory scheme unequivocally supports the treatment of Pine Bark Extract and Grape Seed Extract as plant-based nutraceutical ingredients governed by the FSSA, 2006, and not as finished food products or medicinal preparations at the stage of im....
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....elow: "7. Nutraceuticals .- (1)(i) The nutraceuticals shall provide a physiological benefit and help maintain good health. (ii) A food business operator may extract, isolate and purify nutraceuticals from food or non-food sources, that is preparing amino acids and their derivatives by bacterial fermentation under controlled conditions." (iii) A food business operator may prepare and sell the nutraceuticals in the food-format of granules, powder, tablet, capsule, liquid, jelly or gel, semi-solids and other formats and may be packed in sachet, ampoule, bottle, and in any other format as measured unit quantities except those formats that are meant for parenteral administration. (2) (i) The nutraceuticals shall contain any of the ingredients specified in Schedule I or Schedule II or Schedule IV or Schedule VI or Schedule VII or Schedule VIII. (ii) A food business operator may use ingredients specified in the Schedules referred to in clause (i) of sub-regulation (2) in manufacturing an article of food containing nutraceuticals without prejudice to modifications for one or more of these nutrients rendered necessary by the intended use of the p....
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....by the food business operator relating to the structure or function or the general well-being of the body may be allowed by the Food Authority, if the statement is supported by the generally accepted scientific data; (iii) Every package of food containing nutraceutical shall carry the following information on the label, namely :- (a) the word "NUTRACEUTICAL"; (b) the common name of the nutraceutical; (c) a declaration as to the amount of each nutraceutical ingredient in the product that either has a nutritional or physiological effect; (d) where it is appropriate, the quantity of nutrient shall be expressed in terms of percentage of the relevant recommended daily allowances as specified by the Indian Council of Medical Research even when the nutrient is present along with a nutraceutical as an adjunct and shall bear an advisory warning 'not to exceed the stated recommended daily usage'; (e) an advisory warning for 'recommended usage'; (f) an advisory warning 'NOT FOR MEDICINAL USE' prominently written; (g) an advisory warning in cases where a danger may exist with excess consumption ;. ....
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....ishing that the subject goods merit classification under CTH 1302, reference is made to the competing heading CTH 2106, which covers "Food preparations not elsewhere specified or included". For the case of reference, the relevant extract of CTH 2106 has been reproduced below: Tariff Item Description of goods 2106 Food preparations not elsewhere specified or included 2106 90 - Other 2106 90 99 --- Other 4.73 A plain and harmonious reading of CTH 2106 makes it abundantly clear that the said heading is a residuary entry, intended to cover only such goods which are in the nature of food preparations and which cannot be classified under any other specific heading of the Customs Tariff Act, 1975. It is submitted that the subject goods do not satisfy the essential character of "food preparations" contemplated under the said heading. 4.74 The imported goods are industrial-grade, unformulated botanical extracts, imported in bulk, expressly declared as raw materials for use in the nutraceutical industry and not fit for direct human consumption or retail sale. They are neither mixed, blended, standardised nor prepared for immediate....
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....out any admixture, formulation, flavouring, sweetening, stabilisation or standardisation for retail consumption. The goods are expressly labelled as raw materials for use in the nutraceutical industry and as not fit for direct human consumption or retail sale, which decisively negates the essential requirement under the Explanatory Notes that the goods be "put up as a supplement to the normal diet". 4.77. Further, the Explanatory Notes emphasise the manner of presentation and marketing, noting that such products are "often put up in packaging with indications" relating to health maintenance or nutritional benefits. The subject goods are neither packaged nor presented as consumer supplements, nor do they bear any claims, indications or directions for consumption. Their import is solely for further manufacture and formulation by nutraceutical manufacturers, after undergoing additional processing and compliance with regulatory requirements under the FSSAI framework. 4.78 Furthermore, it is a settled principle of tariff classification that a residual entry can be invoked only when the goods are not classifiable under a more specific heading. In the present case, the subject goods....
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....h the owner of the applicant firm appeared before the Authority. During the course of the hearing, they produced the subject goods before the Authority and demonstrated that the said products are not directly fit for human consumption. They reiterated their earlier submissions and submitted that the subject products have been excluded by the Food Safety and Standards Authority of India (FSSAI) from products intended for human consumption. Therefore, the subject products cannot be covered under 2106 & being vegetable sops & extract it can be classifiable under 1302. 6.3 A further personal hearing in the matter was held on 03.09.2026. Assistant Commissioner, ACC, Bangalore, representative from the Jurisdictional Commissionerate of Customs (Import) argued that the manufacturing process undertaken in respect of the subject products namely, Pine Bark Powder & grape seed powder involves high refining & purification. Therefore, it is excluded from the scope of CTH 1302 and are rightly classifiable under CTH 2106. He further requested that two days' time may be granted to enable to submit its written reply in the matter. 6.4 A further personal hearing in the matter was held on 21....
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.... Heading 1302, First Schedule to the Customs Tariff Act, 1975 (corresponding to heading 13.02 of the Harmonized System). Since Pine Bark Extract is not specifically covered under the named entries under Heading 1302, the applicant claims that it falls under the residual "Other" entry. The applicant further relies upon the HSN Explanatory Notes stating that extracts may be in liquid, paste or solid form and that solid extracts may be obtained by evaporation of the solvent. It contends that filtration, distillation and spray drying are merely routine physical processes and do not change the character of the product as a vegetable extract. The applicant also submits that the product is imported in bulk as an industrial raw material, is not fit for direct human consumption and is intended for further manufacture of nutraceutical products. ii) Department's examination - Pine Bark Extract The applicant's submission and the process disclosed by the applicant has carefully examined and found that; The product is not merely obtained by a single extraction followed by evaporation of the solvent. The disclosed process includes:....
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....pecified or included in more specific headings of the Nomenclature HSN Explanatory Notes, 2022 Edition, Note to heading 13.02, Part (A), first paragraph. (b) Form of extracts, standardisation, and the limitation on further processing: Saps are usually thickened or solidified. Extracts may be in liquid, paste or solid form. "Tinctures" are extracts still dissolved in the alcohol by means of which they are extracted; the so-called "fluid extracts" are solutions of extracts in, for example, alcohol, glycerol or mineral oil. Tinctures and fluid extracts are generally standardised (for instance, pyrethrum extract may be standardised by adding mineral oil to produce commercial grades with a standard pyrethrins content of, e.g., 2 %, 20 % or 25 %). Solid extracts are obtained by evaporating the solvent. Inert substances are sometimes added to certain extracts so that they can be more easily reduced to powder (e.g., belladonna extract, to which powdered gum Arabic is added), or to obtain a standard strength (for instance, certain quantities of starch are added to opium in order to obtain a product containing a known portion of morphine). The addition of such subs....
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....fication is decisive. In this regard, the applicant's contention on this proposition in its absolute form cannot be taken on record because; The HSN Note itself permits ordinary solid extracts obtained by evaporation of solvent and permits certain standardisation involving inert substances. However, it expressly draws a line at additional extraction and purification which increases or decreases particular compounds beyond what is achievable through the initial solvent extraction. The two sentences of the Explanatory Note extracted at paragraph 2(iii)(b) and 2(iii)(c) above must be read together: the first permits standardisation by addition of inert substances, and the second withdraws that permission where the product has been subjected to additional extraction cycles or to purification processes of the kind described. Therefore: ordinary solvent removal # necessarily exclusion from 1302 but additional extraction / selective purification / concentration of particular constituents = potential exclusion from 1302. The applicant has not furnished sufficient technical evidence establishing where its 15:1 Pine Bark Extr....
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....as the applicant has not disclosed the same in their application. 7.3 PART-II : GRAPE SEED EXTRACT: i) Applicant's stand The applicant describes Grape Seed Extract as Vitis vinifera Seed Extract and expressly states that it is "concentrated and standardised" and obtained through a "sequential extraction, purification, concentration, and drying process." The applicant's own description is extracted below: Grape Seed Extract proposed to be imported by the Applicant is a botanical extract derived from grape seeds, which is thereafter concentrated and standardised and is commonly referred to as Grape Seed Extract (10:1). The product is obtained through a sequential extraction, purification, concentration, and drying process, involving physical processing and solvent-based purification, without any chemical synthesis or structural alteration of the naturally occurring constituents. Para 21 of the application filed by M/s. JESSP Chemicals. The applicant claims classification under Heading 1302 on the ground that the product is derived from vegetable material, contains no chemically synthesised substance and is imported in bulk as a ....
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....t be subjected to additional extraction cycles or to purification processes, such as chromatographic purification, that increase or decrease certain compounds or compound classes to a degree that cannot be achieved solely by means of initial solvent extraction. HSN Explanatory Notes, 2022 Edition, Note to heading 13.02, Part (A). In the present case, the applicant has admitted three extraction cycles and resin adsorption purification. Therefore, it submits that the applicant's own manufacturing description provides prima facie evidence that the product has crossed the boundary between an ordinary vegetable extract and a refined/purified botanical preparation. iv) Resin adsorption used by the Applicant: The use of resin adsorption cannot be dismissed as an ordinary filtration operation. The applicant's own description of this is extracted below: The concentrated extract is then passed through a resin adsorption purification process, wherein a specialised resin selectively absorbs and purifies the extract. A 60% ethanol solution is used during this stage for analysis and recovery of the purified extract, ensuring consisten....
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....heading 13.02 is a heading of limited, not unlimited, reach: Heading 13.02 applies, inter alia, to liquorice extract and extract of pyrethrum, extract of hops, extract of aloes and opium. The heading does not apply to: (a) Liquorice extract containing more than 10 % by weight of sucrose or put up as confectionery (heading 17.04); (b) Malt extract (heading 19.01); (c) Extracts of coffee, tea or maté (heading 21.01); (d) Vegetable saps or extracts constituting alcoholic beverages (Chapter 22); (e) Camphor, glycyrrhizin or other products of heading 29.14 or 29.38; (f) Concentrates of poppy straw containing not less than 50 % by weight of alkaloids (heading 29.39); (g) Medicaments of heading 30.03 or 30.04 or blood-grouping reagents (heading 38.22); (h) Tanning or dyeing extracts (heading 32.01 or 32.03); (i) Essential oils, concretes, absolutes, resinoids, extracted oleoresins, aqueous distillates or aqueous solutions of essential oils or preparations based on odoriferous substances of a kind used for the manufacture of beverages (Chapter 33); or (j) Natural rubber, balata, gutta-....
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....f active ingredients to provide therapeutic or prophylactic effect against diseases or ailments other than the relevant nutritional deficiencies. Other preparations with a sufficient quantity of active ingredient to provide a therapeutic or prophylactic effect against a specific disease or ailment are excluded (heading 30.03 or 30.04). HSN Explanatory Notes, 2022 Edition, Note to heading 21.06, item (16). It is respectfully submitted that item (16) expressly uses the words "concentrates, extracts, isolates or the like", and expressly contemplates the presence of "carriers, fillers, stabilisers or other technical aids". The heading is therefore not confined to products in finished retail or dosage form. Accordingly, once the product is found to have ceased to be a simple vegetable extract of Heading 1302, the fact that it is specifically concentrated, standardised and intended for use in nutraceutical preparations becomes relevant in determining whether it is a preparation falling under Heading 2106. vii) Final Submission for "Grape Seed Extract" The applicant's own manufacturing description demonstrates that the product undergoes: ....
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...., determine tariff classification. Classification depends upon the goods as imported, including their composition, processing, degree of refinement and commercial character. Further, the Hon'ble Supreme Court has held that end use by itself cannot be determinative of classification. In CCE v. Carrier Aircon, the Hon'ble Supreme Court observed that classification depends upon the statutory tariff entry, basic character, function and use, and that end-use alone cannot determine classification. Therefore, the Department does not rely solely upon the fact that the goods are intended for nutraceutical manufacture. The Department relies primarily upon the nature and degree of processing, with the intended nutraceutical application being a supporting factor. The matter may kindly be taken on record and further necessary action may be taken accordingly. 8. Applicant's Reply to the Comments of the Jurisdictional Commissionerate: The comments received from the jurisdictional Commissionerate vide letter dated 04.09.2026 were communicated to the applicant for their response. In reply. the applicant vide letter dated 16.09.2026 rebutted the comments of the jurisdiction....
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....losed by the Applicant, inasmuch as the said Note states that "solid extracts are obtained by evaporating the solvent" and that such evaporation "does not affect the classification of these solid extracts." 8.3 It is submitted that what stands excluded under the said Note is an extract which, after being formed, is subjected to a further extraction cycle or a purification process, such as chromatographic purification, that alters the natural balance of its constituent compounds. It is submitted that no such process is undertaken in the present case, inasmuch as both extraction cycles occur prior to, and not after, the formation of the extract. 8.4 It is accordingly submitted that the averment contained in paragraph No. 2(ii) and (iii) of the Customs letter dated 04.09.2026 is incorrect and is liable to be rejected, and that Pine Bark Extract merits classification under CTI 1302 19 19. II. The descriptor "15:1" in the certificate of analysis denotes a raw-material yield ratio, and not a standardisation ratio 8.5 In paragraph No. 2(ii) and 2(iv) of the Customs letter dated 04.09.2026, it has been averred that the Applicant has not sufficiently established whether the rati....
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.... Customs Tariff Act, 1975, and are accordingly of high persuasive value. 8.8 It is submitted that, in NY Ruling N338685 dated 4 April 2024, CBP classified Pine Bark Extract together with Grapeseed Extract under Heading 1302, upon recording that "the solvent- obtained extracts have not been advanced by chromatographic purification or reverse osmosis or any other additional purification methods." Part II: Grape seed extract V. Ground V: The three-cycle water extraction constitutes exhaustive extraction of the raw material, and not an additional extraction cycle within the meaning of the HSN exclusion 8.9 In paragraph No. 3(ii) and (iii) of the Customs letter dated 04.09.2026, it has been averred that the process of manufacture of Grape Seed Extract involves three extraction cycles, and not a single extraction, and that this demonstrates that the product has crossed the boundary between an ordinary vegetable extract and a refined or purified preparation, which averment is incorrect and is liable to be dropped and discarded, on account of the following reasons: i. It is submitted that all three water-extraction cycles disclosed at Paragraph 23 of the Application ar....
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....ngle step, through a single ethanol wash, and that no graded or sequential elution is undertaken to fractionate the organic matter into separate compound classes. v. It is submitted that no single compound or class of compounds is selected for isolation, and none is discarded; the complete natural profile originally dissolved in the aqueous extract is recovered as a whole. vi. It is submitted that only water, for extraction, and ethanol, for recovery of the extract from the resin, are employed, both being ordinary solvents expressly recognised under the HSN Explanatory Note, which describes 'fluid extracts' as "solutions of extracts in, for example, alcohol." 8.12 It is further submitted that the descriptor "10:1" appearing in respect of Grape Seed Extract is, similarly, a raw-material yield ratio, and not a standardisation ratio, as expressly clarified at Paragraph 28 of the Application, which states that "approximately 10 kilograms of raw grape seeds yields about 1 kilogram of finished Grape Seed Extract." VII. Ground VII: The rulings of the United States Customs and Border Protection fortify the classification of Grape seed extract under heading 1....
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....o be satisfied by an unformulated, bulk industrial raw material. iv. It is submitted that the Subject Goods are imported in bulk industrial packaging, expressly labelled "for Industrial Purpose Only" and "not fit for direct human consumption/retail sale," and require further blending, standardisation, encapsulation or tabletting by nutraceutical manufacturers before the same can be supplied to, or consumed by, an end consumer. v. It is submitted that the opening paragraph of the HSN Explanatory Note to Heading 21.06 itself confines the heading to preparations "for use, either directly or after processing ... for human consumption," and that the Subject Goods, being incapable of consumption by a human being in the condition imported, do not answer to this description. 8.15 It is submitted that the Subject Goods are not "food" at all, and cannot be consumed by a human being in the form in which they are imported. 8.16 Thus, it is accordingly submitted that Heading 2106 cannot apply to either of the Subject Goods, and that the averment contained in paragraph No. 3(v) and (vi) of the Customs letter dated 04.09.2026 is liable to be rejected. Part IV: The FSSAI....
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....onstitutes relevant, expert and scientific evidence of their essential character as raw material ingredients for nutraceutical manufacture, and not as finished food. 8.21 The applicant has relied upon the following rulings of the United States Customs and Border Protection (CBP) in support of its claim for classification of the subject goods under Heading 1302: Sr. No. Ruling No. & Date Product Considered Key Process Facts Classification/ Relevance 1. NY N338685 (04.04.2024) Grapeseed Extract and Pine Bark Extract (maritime pine), France Solvent-obtained extracts; no chromatographic purification, no reverse osmosis, no other additional purification. Classified under Heading 1302 (1302.19.4140). Directly supports both. Subject Goods. 2. NY R04282 (03.07.2006) RoxPlus Grape Seed Extract (and other herbal extracts), India Pure extract, powder form, obtained by alcohol/water solvent extraction, for use as an ingredient. Classified under Heading 1302 (1302.19.9040). Same country of manufacture; supports Grape Seed Extract 9. Discussion and Findings 9.1 I have carefully considered the application dated 16.02.2026 filed by the Applican....
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....Bark Extract commences with the receipt and inspection of raw pine bark. The raw material is examined to ensure that it is free from fungal growth, foreign matter and excessive moisture. Only the raw pine bark conforming to the prescribed quality parameters, including a moisture content generally below 10%, is approved for further processing. After approval, the raw pine bark is subjected to grinding, whereby it is reduced to a fine powder having a particle size of approximately 0.1 mm to 0.3 mm. The reduction in particle size facilitates efficient contact between the plant material and the extraction solvent and thereby enables effective extraction of the soluble botanical constituents present in the pine bark. The powdered pine bark is thereafter transferred to an extraction vessel, where a mixture of ethanol and water is added as the extraction solvent. The mixture is heated and maintained at a temperature ranging from approximately 60℃ to 80℃ for about four hours, during which the soluble constituents present in the pine bark are extracted into the solvent medium. Upon completion of the first extraction cycle, the liquid extract is separated from the spent ....
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....ately 70-80℃, repeated extraction and filtration, concentration of the combined extract through vacuum distillation, followed by spray drying, grinding and sieving to obtain Pine Bark Extract powder. C. Character of the Goods as Imported In the form and condition in which the goods are imported, Pine Bark Extract is a concentrated botanical extract derived from pine bark, presented in powdered form. The imported product is intended exclusively for use as an industrial raw material/input by nutraceutical manufacturers for further formulation and processing. Upon importation, it undergoes further downstream industrial processing, including purification, standardisation, and blending, as required, and is thereafter supplied as a raw material/input to nutraceutical bulk manufacturers. It is not imported in the form of tablets, capsules or any other finished dosage form and is not presented as a finished product for direct human consumption. Accordingly, the essential character and identity of the imported goods remain that of a plant-derived botanical extract obtained from pine bark, rather than that of a finished nutraceutical preparation. 9.2.2 Grape Seed E....
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....he desired constituents. A 60% ethanol solution is used during this stage for recovery and further processing of the purified extract, thereby facilitating consistency and standardisation of the product. Following resin purification, the extract is adjusted to the specified concentration level to ensure uniformity and standardisation prior to drying. The adjusted liquid concentrate is then subjected to spray drying using a high-speed spray dryer, with an inlet temperature of approximately 220℃ and an outlet temperature of approximately 95℃, resulting in the formation of a dry powdered extract. The spray-dried powder is subsequently sieved to remove agglomerates and ensure uniformity of particle size. On an average, approximately 10 kilograms of raw grape seeds yield about 1 kilogram of finished Grape Seed Extract, while the remaining material primarily comprises insoluble residue and process waste removed during the extraction and filtration stages. The finished Grape Seed Extract powder is thereafter packed in inner packaging followed by outer packaging and stored under suitable conditions until dispatch. The manufacturing process of Grape Seed Extrac....
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....goods fail within the scope of Heading 1302 or are excluded therefrom by virtue of any specific provision or the exclusionary portion of the HSN Explanatory Notes. 9.5 Scope of Heading 1302 and Applicability to the Subject Goods 9.5.1 Rule 1 of the GIR provides that classification shall be determined according to the terms of the headings and any relevant Section or Chapter Notes and provided such headings or Notes do not otherwise require. The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only and have no legal bearing on classification. Accordingly, the classification of the subject goods is required to be determined, in the first instance, with reference to the terms of the relevant tariff heading and the applicable Section and Chapter Notes. The relevant portion of Rule 1 is reproduced below: 1. The titles of Sections. Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions: 9.5.2 I....
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....rial by solvents), provided that they are not specific or included in more specific headings of the Nomenclature. These saps and extracts differ from the essential oils, resinoids and extracted oleoresins of heading 33.01, in that, apart from volatile odoriferous constituents, they contain a far higher portion of other plant substances (e.g., chlorophyll, tannins, bitter principles, carbohydrates and other extractive matter. *** "Saps are usually thickened or solidified. Extracts may be in liquid, paste or solid form. 'Tinctures' are extracts still dissolved in the alcohol by means of which they are extracted; the so-called 'fluid extracts' are solutions of extracts in, for example, alcohol, glycerol or mineral oil. Tinctures and fluid extracts are generally standardised (for instance, pyrethrum extract may be standardised by adding mineral oil to produce commercial grades with a standard pyrethrins content of, e.g., 2%, 20% or 25%). Solid extracts are obtained by evaporating the solvent. Inert substances are sometimes added to certain extracts so that they can be more easily reduced to powder (e.g., belladonna extract; to which powdered g....
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....ey are imported, they continue to retain their essential character as vegetable extracts and whether any specific provision of the Nomenclature requires their classification elsewhere. Consequently, concentration, drying, standardisation or conversion of an extract into powder form would not. by themselves, take a product outside Heading 1302. However, the nature and effect of any additional extraction or purification process must be examined where such process is alleged to have selectively increased or decreased particular compounds or compound classes beyond what could be achieved by the initial solvent extraction. 9.5.7 In the present case, I find that the manufacturing processes of both products are elaborate and involve more than a single extraction operation. Pine Bark Extract involves grinding, ethanol-water extraction, filtration, a second extraction of the same plant material, combination of the extraction liquors, removal of ethanol, concentration, spray drying, grinding and sieving. Grape Seed Extract involves three successive water-extraction cycles, filtration, vacuum concentration, resin adsorption, recovery using ethanol, adjustment of concentration, spray drying....
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.... of soluble botanical constituents remaining in the plant material and not for selective isolation of any particular constituent. The "15:1" ratio appearing in the product description has also been explained as a raw-material-to-finished-product yield ratio, i.e. approximately 15 kilograms of raw pine bark yielding about 1 kilogram of finished extract, and not as a standardisation ratio relating to any particular marker compound. 9.5.12 I find that the aforesaid process, considered as a whole, results in recovery of soluble constituents from the original vegetable material followed by concentration and conversion of the extract into powdered form. There is no material available on record establishing that any particular compound or class of compounds in Pine Bark Extract is selectively isolated, enriched or depleted by a specialised purification technique. The absence of chemical synthesis or structural modification, though not by itself determinative of classification, is also consistent with the product retaining its identity as a botanical extract. 9.5.13 In the case of Grape Seed Extract, the Applicant has disclosed three successive water- extraction cycles carried out up....
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....sh that the subject goods have undergone a process which selectively isolates or substantially alters particular compounds or compound classes in the manner contemplated by the exclusionary portion of the HSN Explanatory Notes to Heading 1302. 9.5.17 I further find that the concentration of the extracts, the conversion of the extracts into powder form and the stated extraction ratios of 15:1 and 10:1 cannot take the products outside Heading 1302. The HSN Explanatory Notes themselves recognise that solid extracts may be obtained by evaporation of the solvent and that extracts may undergo standardisation or addition of inert substances without losing their character as vegetable extracts, subject to the stated limitation regarding specialised purification or additional extraction resulting in selective concentration or depletion of constituents. 9.5.18 I have also examined the specific exclusions contained in Note 1 of Chapter 13. The subject goods are not liquorice extracts containing more than 10% by weight of sucrose, malt extract, extracts of coffee, tea or maté, alcoholic beverages, products of Heading 29.14 or 29.38, medicaments, tanning or dyeing extracts, essenti....
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....oods, in the condition in which they are imported, possess the character of food preparations. 9.6.2 I find that the subject goods are imported as single-ingredient botanical extracts in powdered form and are imported in bulk for use as industrial raw materials by nutraceutical manufacturers. They are not imported as tablets, capsules, measured-dose preparations or other finished nutraceutical products. The labels and documents placed on record describe the goods as ingredients/raw materials for use in the nutraceutical industry and indicate that they are not intended for direct human consumption or retail sale. These aspects are relevant in determining the character and presentation of the goods at the time of importation. 9.6.3 The HSN Explanatory Notes of Heading 2106 contemplate, inter alia, certain food and dietary preparations, including preparations based on concentrates or extracts and containing carriers, fillers, stabilisers or other technical aids, which are presented as supplements to the normal diet. The relevant portion of the HSN reproduced below: The heading includes, inter alia: *** (16) Preparations, often referred to as food suppl....
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....der Heading 2106. 9.6.6 I further find that the intended use of the subject goods in the nutraceutical industry, although relevant for appreciating their commercial character and manner of use, cannot by itself determine their tariff classification. Classification is required to be determined with reference to the goods as presented for assessment at the time of importation. In the present case, the subject goods are botanical extracts in their imported condition and are not themselves presented as food or dietary supplements. Therefore, heading 2106, being a residuary heading for food preparations not elsewhere specified or included, does not more specifically describe or include the subject goods in the condition in which they are imported. Consequently, the exclusionary condition contained in the HSN Explanatory Notes to Heading 1302 is not attracted on account of Heading 2106. 9.7 Effect of the Food Safety and Standards Act, 2006 and Regulations, 2016 9.7.1 I have also considered the Applicant's reliance upon the Food Safety and Standards Act, 2006 (FSSA, 2006) and the Food Safety and Standards (Health Supplements, Nutraceuticals, Food for Special Dietary Use, Food....
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....edic, sidha and unani drugs as defined in clauses (a) and (h) of section 3 of the Drugs and Cosmetics Act, 1940 (23 of 1940) and rules made thereunder; (iii) does not claim to cure or mitigate any specific disease, disorder or condition (except for certain health benefit or such promotion claims) as may be permitted by the regulations made under this Act: (iv) does not include a narcotic drug or a psychotropic substance as defined in the Schedule of the Narcotic Drugs and Psychotropic Substances Act, 1985 and rules made thereunder and substances listed in Schedules E and EI of the Drugs and Cosmetics Rules, 1945." 9.7.3 Based on the above statutory provisions, I find that a nutraceutical or health supplement is a specific food product which is labelled and presented as such and is formulated in prescribed forms for oral administration. The statutory provisions therefore distinguish between a nutraceutical or health supplement and the ingredients used in its manufacture. Accordingly, merely because a substance can be used as an ingredient in a nutraceutical product, it cannot, by that fact alone, be treated as a nutraceutical or health supplement in the form in ....
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....ons, 2016"). Regulation 7 thereof deals with "Nutraceuticals" and provides, inter alia, that nutraceuticals may be prepared and sold in specified food formats and may contain ingredients specified in the relevant Schedules. The relevant provisions are reproduced below: "7. Nutraceuticals. - (1)(i) The nutraceuticals shall provide a physiological benefit and help maintain good health. (ii) A food business operator may extract, isolate and purify nutraceuticals from food or non-food sources, that is preparing amino acids and their derivatives by bacterial fermentation under controlled conditions. (iii) A food business operator may prepare and sell the nutraceuticals in the food-format of granules, powder, tablet, capsule, liquid, jelly or gel, semi-solids and other formats and may be packed in sachet, ampoule, bottle, and in any other format as measured unit quantities except those formats that are meant for parenteral administration." Regulation 7 (2)(i) further provides "(2)(i) The nutraceuticals shall contain any of the ingredients specified in Schedule I or Schedule II or Schedule IV or Schedule VI or Schedule VII or Schedule VIII." Regul....
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....ant's submission that the subject goods are capable of being used as botanical ingredients in nutraceutical products. It further supports the factual distinction between the imported botanical extracts and the finished nutraceutical products manufactured subsequently from such ingredients. 9.7.10 I find that the aforesaid inclusion in Schedule VI cannot determine the classification of the subject goods under the Customs Tariff. The FSSA and the Regulations made thereunder constitute a regulatory framework concerning food safety, permitted ingredients, composition, manufacture, presentation and labelling of food and nutraceutical products, whereas tariff classification is governed by the Customs Tariff read with the GIR and the relevant Section and Chapter Notes. Therefore, the recognition of Pine Bark Extract and Grape Seed Extract as permissible nutraceutical ingredients does not make the imported goods classifiable under Heading 2106 merely because of their intended use in the manufacture of nutraceutical products. 9.7.11 On the contrary, the statutory and regulatory provisions examined above reinforce the distinction already arrived at on the basis of the nature and pr....
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....rations. It is common knowledge that edible preparations for specific purpose cannot be equated to medicinal preparation. As such, we find that the impugned order fell in error, in reasoning and by applying wrong facts. 7. Tariff Item 1302 19 14 specifically mentions extracts of Ginseng (including powder). It is clear that if Ginseng extract is imported in powder form, there could be no question about its classification. However, in the present case, the objection came only because it is in tablet form. Admittedly, vegetable extracts like the present one, can be in various forms, liquid, powder or compacted tablet. As long as the item is only extract of Ginseng plant, there can be no reason for exclusion of such item from the said tariff entry. Even otherwise, we note that the classification proposed by the Revenue is completely unconnected to the product in question. A perusal of main Tariff Entry 2106 will show that the said heading deals with food preparations not elsewhere specified or included. A perusal of open source information available in public domain indicates that the said Ginseng extract is considered as traditional medicine, for centuries. Extract is widely ....
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....fy the goods under Heading 2106 is not sustainable in law and on facts. Accordingly, the demand of differential duty, interest and consequential imposition of penalties on the importer and its director based on such proposed classification are therefore liable to be set aside." 9.8.5 I find that the applicant has relied upon certain rulings issued by the United States Customs and Border Protection (CBP), namely NY N338685 dated 04.04.2024 in respect of Grape Seed Extract & Pine Bark Extract and NY R04282 dated 03.07.2006 in respect of Grape Seed Extract, in support of its claim for classification under Heading 1302. I find that such rulings being issued under the United States tariff nomenclature are not binding for determining classification under the Indian Customs Tariff. However, considering that the Harmonized System forms the basis of the tariff nomenclatures of both jurisdictions, such rulings may have persuasive value where the goods, their source materials, manufacturing processes and degree of processing are materially comparable. In NY N338685, CBP classified Grape Seed Extract and Pine Bark Extract under Heading 1302, noting that the extracts were obtained by solv....
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....ation of Correct Tariff Item 9.13.1 In view of the foregoing discussion and findings, it has been established that the subject products, namely Pine Bark Extract and Grape Seed Extract, are appropriately classifiable under Heading 1302 of the Customs Tariff as vegetable extracts. The issue that remains to be determined is the appropriate eight-digit Customs Tariff Item (CTI) under Heading 1302 for each of the subject products. CTH 1302 under Chapter 13 covers the following sub-headings and tariff items: 1302 VEGETABLE SAPS AND EXTRACTS; PECTIC SUBSTANCES, PECTINATES AND PECTATES; AGAR-AGAR AND OTHER MUCILAGES AND THICKENERS, WHETHER OR NOT MODIFIED, DERIVED FROM VEGETABLE PRODUCTS - Vegetable saps and extracts : 1302 11 00 -- Opium 1302 12 00 -- Of liquorice 1302 13 00 -- Of hops 1302 14 00 -- Of Ephedra 1302 19 -- Other : --- Extracts : 1302 19 11 ---- Of belladona 1302 19 12 ---- Of cascara sagrada 1302 19 13 ---- Of nuxvomica 1302 19 14 ---- Of ginseng (including powder) 1302 19 15 ---- Of agarose 1302 19 16 ---- Of neem ....
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....either Pine Bark Extract nor Grape Seed Extract is specifically enumerated by name under any of the specific tariff items falling under sub-heading 1302 19. Further, no other specific tariff item under Heading 1302 has been identified which more specifically covers the subject goods. 9.13.4 Accordingly, applying the tariff structure under Heading 1302, I find that the subject Pine Bark Extract and Grape Seed Extract, being vegetable extracts not specifically covered under any of the preceding tariff items, merit classification under the residual tariff item CTI 1302 19 39 - "Other". 9.13.5 In view of the foregoing discussion and findings, I hold that the subject Pine Bark Extract and Grape Seed Extract are classifiable under Customs Tariff Item 1302 19 39 as "Other" in terms of the tariff restructuring effective from 01.05.2026. 10. I rule accordingly. ============= Document 1 Imported Products Pine Bark Extract also referred as Subject Good No. 1| Grape Seed Extract also referred as Subject Good No. 2] Document 2 Flow Chart: A Simple Flow Chart - Manufacture of Pine Bark Extract Raw Pine Bark 1 Quality Check of Raw Material (appearance, moisture....