In re JESSP Chemicals (CAAR Mumbai)
Summary: The Customs Authority for Advance Rulings (CAAR), Mumbai examined the classification of Pine Bark Extract and Grape Seed Extract imported by M/s JESSP Chemicals for use as raw materials by nutraceutical manufacturers. The applicant proposed classification under CTH 1302 as vegetable saps and extracts, whereas the jurisdictional Commissionerate questioned whether the multiple extraction, concentration and purification processes could take the products outside Heading 1302 and potentially bring them under the residual Heading 2106.
CAAR examined the manufacturing processes, botanical origin, composition, intended use, HSN Explanatory Notes and the Food Safety and Standards Act, 2006 and related regulations. It observed that both products originate from plant materials and undergo solvent-based extraction followed by operations such as filtration, concentration, drying and, in the case of Grape Seed Extract, resin adsorption. However, the material on record did not establish specialised purification or selective concentration/depletion of particular compounds beyond what could be achieved through initial solvent extraction.
The Authority held that the processes did not alter the essential identity of the goods as vegetable extracts. It further held that Heading 2106 could not be invoked merely because the extracts were intended for use in nutraceutical products, since they were imported in bulk as single-ingredient botanical extracts/raw materials and not as finished food preparations or dietary supplements put up for direct consumption. Accordingly, Pine Bark Extract and Grape Seed Extract were held classifiable under Heading 1302 of the First Schedule to the Customs Tariff Act, 1975, specifically under CTH 1302 19 39, “Other”, in their imported condition.
