In re Solae Company India Private Limited (CAAR Delhi)
CAAR ruled that The Supro Nuggets Isolated Soy Protein does not appear to find a place under the heading 2106, which provides for “21.06 – Food preparations not elsewhere specified or included”. The six digit level entry in the tariff “2106.10 – Protein concentrates and textured protein substances”. Further, this heading covers: “(A) Preparations for use, either directly or after processing (such as cooking, dissolving or boiling in water, milk etc.), for human consumption; (B) Preparations consisting wholly or partly of foodstuffs, used in the making of beverages or food preparations for human consumption.” The heading “includes preparations consisting of mixtures of chemicals (organic acids, calcium salts, etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food preparations either as ingredients or to improve some of their characteristics (appearance, keeping qualities, etc.). These entries also don’t provide any space for the mentioned item under examination” Further, the following entries are not included as provided under “Entry 6. Protein hydrolysates consisting mainly of a mixture of amino-acids and sodium chloride, used in food preparations (e.g., for flavouring); protein concentrates obtained by the elimination of certain constituents of defatted soya-bean flour, used for protein-enrichment of food preparations; soya-bean flour and other protein substances, textured. However, the heading excludes non-textured defatted soya-bean flour, whether or not fit for human consumption (heading 23.04) and protein isolates (heading 35.04).”
However, this particular classification entry appears to provide the appropriate heading, which encapsulates the item under consideration. Let us look closely at the entries of the heading CTH 3504. The Chapter 35 deals with “Albuminoidal Substances; Modified Starches; Glues; Enzymes”. The “CTH 35.04 —Peptones and their derivatives; other protein substances and their derivatives, not elsewhere specified or included; hide powder, whether or not chromed. This heading covers: (A) Peptones and their derivatives; (B) Other protein substances and their derivatives, not covered by a more specific heading in the Nomenclature, including in particular ………….. (6) Protein isolates obtained by extraction from a vegetable substance (e.g., defatted soya bean flour) and consisting of a mixture of proteins contained therein. The protein content of these isolates is generally not less than 90%. This heading does not include: (a) Protein hydrolysates consisting mainly of a mixture of amino-acids and sodium chloride, and concentrates obtained by the elimination of certain constituents of defatted soya-bean flour, used as additives in food preparation (heading 21.06)”. The Supro Nuggets Isolated Soy Protein is appropriately thus finds a place under CTH 3504 and Entry (6) under the Explanatory Notes. The item under consideration, is obtained by extraction from a vegetable substance (e.g., defatted soya bean flour) and consisting of a mixture of proteins contained therein. The protein content of these isolates is generally not less than 90%. As could be seen in the details of the literature submitted in the application, it is clear that the substance is extracted from soya-bean flour, which is a pure plant-based product, and also it is also evident that the protein content is more than 90% as enclosed in the application along with moisture and gluten.
There are multiple US-CROSS Rulings, which delineates the basic criterion of classification of any product under CTH 3504. As provided under ‘HQ 963306, dated September 6, 2000’, “Substances that have classified in heading 3504 have at least four things in common. First, these protein substances are iy for use in making pharmaceuticals, textiles or plastics. Second, the protein substances of heading consist of a very high percentage of protein. Third, the protein in substances of heading 3504 are derived a single source, such as whey, wheat gluten, or eggshell membrane, respectively. Lastly, the substances therefore classified in heading 3504, HTSUS, may be mixtures of protein and other substances, such as ash /ad moisture, but the other substances are a product of the derivation of the protein substance from its source, cot a deliberate preparation of different protein substances mixed with flavoring and anti-caking agents.” Further, under ‘HQ 956644 dated December 8, 1994’, “Subheading 3504.00.1000, HTSUS, specifically provides for protein isolates. It is concluded that this eo nomine provision is without qualification, and is not limited to the vegetable sourced protein isolate; the example in the ENs of the vegetable sourced product being illustrative and not restrictive.”
For the reasons above, it is found that heading 2106 does not describe such a substance at GRI I. Before progressing through the GRIs, we must look to other headings that may describe the goods at GRI 1. The instant merchandise contains ‘Isolated Soy Protein’ containing a rich concentration of protein to the tune of 90% and more, which is extracted from a single plant source of soya-bean flour, and which also contains moisture of 10% and gluten as provided under the lab report enclosed with the application, thus is ejusdem generis to the products classified in heading CTH 3504, as a protein isolate. There is no need to continue to an essential character analysis of GRIs 2 and 3, discussing the relative merits, weight, volume, or other characteristics of each ingredient of the preparation, when there is a heading which describes just such protein isolates. Heading 3504 is that heading.
The illustrations contained in the preceding paras of 7.4 and 7.5 also strongly indicates that the product “Supro Nuggets” has an established ingredient which is protein rich and the protein is extracted from a plant based source e.g. Soya-bean flour.
Keeping in view of the foregoing, it is evident that the proposed items of import namely, “Supro Nuggets 570 G IP- Soy Protein Nuggets” derived from plant source and containing relatively high protein levels, justifies classification under Sub-heading 35040091 of the First Schedule to the Customs Tariff Act, 1975.
FULL TEXT OF ORDER OF CUSTOMS AUTHORITY FOR ADVANCE RULINGS
M/s Solae Company India Private Limited, Electronics Pvt. Ltd., 6th Floor, Tower C, DLF Cyber Greens, Sector 25 A, DLF City Phase III, Gurugram, Haryana, 122002 (IEC-0506066541) hereinafter referred to as “the applicant” filed an application (CAAR- 1) dated 02.08.2023 for Advance Ruling before the Customs Authority for Advance Ruling, (CAAR in short), New Delhi. The said application was received in the secretariat of CAAR New Delhi on 18.09.2023 along with its enclosures in terms of Section 28H(1) of Customs act, 1962 (hereinafter referred to as the “Act”). The company a registered Private Limited company, is now proposing to import the product `Supro Nuggets 570 G IP’ for the purpose of selling the same to buyers who will use it for manufacturing purposes under the port jurisdiction of the Commissioner of Customs, NS-I, JNCH, Tal- Uran, Dist: Raigad, Nhava Sheva, Maharashtra — 400707. The present Application seeks a ruling on question, whether Supro Nuggets 570 GIP proposed to be imported by the applicant is classifiable under Tariff Item 35040091 of the First Schedule to the Customs Tariff Act, 1975 (hereinafter referred to as “the Tariff”)?.
Grounds of application- Issue requiring Advance Ruling
2.1 In light of the aforementioned, the applicant seeks Advance Ruling as under:
a) Question1: Whether Supro Nuggets 570 IP proposed to he imported by the applicant is
classifiable under Tariff Item 35040091 oldie first Schedule to the Customs Tariff Act, 1975 (hereinafier referred to as “the l’arill”)?
b) Question 2: If the answer to the above question is in the negative, then what is the
appropriate classification of Supro Nuggets 570 (1 IP soy protein nuggets under the “tariff?
3. CLASSIFICATION OF SUPRO NUGGETS 570 G IP
3.1 The goods imported into India are to be classified under the Headings set out in the “tariff.
3.2 The classification of the goods under the Tariff is governed by the principles as enumerated in the General Rules of Interpretation (‘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.
3.3 The Tariff is aligned, upto the 6 digit level, with the Harmonized System of Nomenclature (‘HSN’) issued by the World Customs Organization (`WCO’). The FISN Explanatory Notes released by the WCO aid in the interpretation of the Headings of the Tariff and may be used as a safe guide for the same. It has been held so by the Supreme Court in the case of Collector of Customs, Bombay v. Business Forms Ltd. Thr. 0.L., 2002 (142) E.L.T. 18 (S.C.).
Classification under Ileadinz 35.04
3.4 As per the Applicant, the product in question merits classification under Heading 3504. The relevant extract from Heading 3504 is reproduced below:
