In re G. C. Chemie Pharmic Limited (CAAR Mumbai)
The Customs Authority for Advance Rulings (CAAR), Mumbai, considered an application filed by M/s G. C. Chemie Pharmic Limited seeking modification and rectification of Advance Ruling No. CAAR/Mum/ARC/06 & 07/2026-27 dated 23.04.2026 under Regulations 21 and 22 of the Customs Authority for Advance Rulings Regulations, 2021. The applicant was heard during a personal hearing held on 20.07.2026.
The original advance ruling had decided the classification of Pelaforce EMA1170 (Pelargonium Sidoides Root Extract) and the applicability of a customs exemption notification. It held that the product was classifiable under Customs Tariff Heading (CTH) 3003, specifically HS Code 3003 90 90, as “Other” medicaments under the First Schedule to the Customs Tariff Act, 1975, applying General Rules for Interpretation (GIR) Rules 1 and 3(b). It also held that the product was not eligible for the concessional rate of duty under Notification No. 45/2025-Customs dated 24.10.2025.
The applicant sought rectification of the ruling on several grounds. It reiterated through additional submissions dated 22.06.2026 that Pelaforce EMA1170 is a simple vegetable extract obtained by hydro-ethanolic extraction of the roots of Pelargonium Sidoides and merits classification under CTH 1302 19 19. According to the applicant, the addition of 30% Maltodextrin serves only as an inert carrier for standardisation and spray drying and, as clarified in the HSN Explanatory Notes, does not alter the classification of vegetable extracts. The applicant relied upon Cachet Pharmaceuticals (P) Ltd. v. Commissioner of Customs, New Delhi [2017 (356) E.L.T. 300 (Tri.-Del.)], US Customs Ruling HQ H225004, and US Customs Ruling NY N241904 in support of the proposition that plant extracts containing inert carriers continue to remain classifiable under Heading 1302. It further submitted that the product is imported in bulk as a raw material for manufacture of pharmaceutical formulations, is neither a medicament nor put up in measured doses or retail packings, and that it had not been given an opportunity to make submissions regarding classification under CTSH 3003 90 920 instead of CTSH 1302 19 19.
The applicant also challenged factual observations in paragraph 17.6 of the earlier ruling. It contended that the manufacturing process did not involve any separate concentration stage after hydro-ethanolic extraction and that the process flow chart did not show any such concentration step. It similarly disputed the finding that the extract underwent further extraction cycles or purification processes after the first solvent extraction, stating that no such additional extraction cycle appeared in the process flow chart and that these observations constituted factual errors.
In its discussion, the Authority first considered the scope of its powers under Section 28M(1) of the Customs Act, 1962, read with Regulations 21 and 22 of the Customs Authority for Advance Rulings Regulations, 2021. It observed that the Authority derives its powers from Chapter V-B of the Customs Act, 1962 and the applicable Rules and Regulations. On examination of the records and legal provisions, it found that the earlier advance ruling had been pronounced under a mistake of law or fact within the meaning of Rule 21, warranting initiation of modification proceedings after giving the applicant and the jurisdictional Commissioner/Principal Commissioner of Customs an opportunity of being heard.
The Authority identified the issue for determination as whether Pelaforce EMA1170, consisting of 70% hydro-ethanolic extract of Pelargonium Sidoides root and 30% Maltodextrin as carrier, imported in bulk for supply to pharmaceutical manufacturers, should be classified under Heading 1302 as a vegetable extract or under Heading 3003 as a medicament.
Referring to Rule 1 of the General Rules for Interpretation, the Authority observed that tariff classification is governed by the terms of the headings and the relevant Section or Chapter Notes, and only if these do not resolve the issue should subsequent Rules be applied. It also referred to the Supreme Court decisions in Collector of Customs, Bombay v. Business Forms Ltd., 2002 (142) ELT 18 (SC) and CCE v. Wood Craft Products Ltd., 1995 (77) ELT 23 (SC), which recognised the persuasive value of the HSN Explanatory Notes in interpreting tariff entries.
The Authority examined Heading 1302, noting that it covers vegetable saps and extracts and that the HSN Explanatory Notes state that vegetable extracts may be obtained by solvent extraction and may exist in liquid, paste or solid form. The Notes further provide that inert substances may be added merely to facilitate handling or standardisation without affecting classification. Based on the manufacturing literature produced by the applicant, the Authority found that the product is obtained by hydro-ethanolic extraction of the roots of Pelargonium Sidoides, followed by filtration, vacuum drying and addition of Maltodextrin as carrier before packing. It held that the addition of Maltodextrin does not alter the essential character of the product where it functions only as an inert carrier or drying aid and therefore does not exclude the goods from Heading 1302.
The Authority further examined whether the manufacturing process excluded classification under Heading 1302. It observed that the HSN Explanatory Notes exclude extracts subjected to high refinement or purification, such as chromatographic purification, ultrafiltration or additional extraction cycles leading to selective concentration or removal of constituents beyond normal solvent extraction. From the process flow chart, it found that the manufacturing process comprised milling, hydro-ethanolic extraction, filtration, vacuum drying, solvent recovery and addition of Maltodextrin. There was no evidence of chromatographic purification, ultrafiltration, liquid-liquid extraction after the initial extraction stage or any additional extraction cycle. It further observed that evaporation of solvent by vacuum drying to obtain a solid extract is recognised by the HSN Explanatory Notes as a normal method of producing solid extracts and cannot be equated with an additional extraction cycle.
With respect to Heading 3003, the Authority observed that it covers medicaments consisting of two or more constituents mixed together for therapeutic or prophylactic use, not put up in measured doses or retail packing. It referred to Chapter Note 3 to Chapter 30, which distinguishes simple vegetable extracts of Heading 1302 from medicinal mixtures or compound vegetable extracts prepared by mixing two or more vegetable materials for therapeutic use. In the present case, the imported goods consisted of a single botanical extract standardised with Maltodextrin, which was not an active therapeutic constituent but only a carrier. There was no evidence that the product consisted of two or more active medicinal ingredients so as to satisfy the description of Heading 3003.
The Authority also noted that the HSN Explanatory Notes clarify that Heading 3003 applies to medicinal preparations consisting of mixtures of vegetable extracts with other therapeutic substances or vegetable extracts put up in measured doses or retail packings for therapeutic use. The imported goods were brought in bulk as raw material for pharmaceutical manufacturers and were neither in measured doses nor in retail packs intended for direct therapeutic administration. It further observed that the intended end use of the imported goods as raw material for manufacture of tablets, capsules or syrups cannot by itself determine classification, since classification depends primarily on the description of the goods at the time of importation unless the tariff heading itself is use-based. The HSN Explanatory Notes recognise that vegetable extracts of Heading 1302 are commonly used as raw materials in manufacturing various products, including pharmaceutical preparations.
The Authority referred to Cachet Pharmaceuticals (P) Ltd. v. Commissioner of Customs, New Delhi [2017 (356) ELT 300 (Tri.-Del.)], where Ginseng extract was held classifiable under Heading 1302, and to US Customs Ruling NY N241904, in which plant extracts containing substantial quantities of Maltodextrin as inert carrier continued to be classified under Heading 1302. While observing that the foreign ruling was not binding on Customs authorities in India, the Authority considered it to possess persuasive value because it was based on the Harmonized System of Nomenclature (HSN).
Upon reconsideration, the Authority found that the observation in paragraph 17.6 of the earlier advance ruling that the extract underwent a process of “concentration” after hydro-ethanolic extraction was not supported by the evidence on record. It held that the manufacturing process consisted of hydro-ethanolic extraction, filtration, removal of solvent by vacuum drying and addition of Maltodextrin as an inert carrier, without any separate concentration stage, additional extraction cycle or purification process. Accordingly, it modified the earlier finding to reflect the correct manufacturing process.
The Authority consequently modified the findings recorded in the advance ruling dated 23.04.2026. It held that Pelaforce EMA1170 (Extract from the root of Pelargonium Sidoides) is correctly classifiable under Customs Tariff Item 1302 19 19 as “Other Vegetable Extracts” and not under Customs Tariff Item 3003 90 90. It further held that the applicant is entitled to the benefit of the exemption available under Serial No. 37 of Notification No. 45/2025-Customs dated 24.10.2025, subject to fulfilment of all prescribed conditions and verification by the proper officer at the time of assessment. The Authority accordingly modified Advance Ruling No. CAAR/MUM/ARC/06 & 07/2026-27 and answered the questions raised under Section 28H of the Customs Act, 1962 in these terms.
