In re Mediraw Pharma & Nutra Private Limited (CAAR Delhi)
Summary: M/s Mediraw Pharma & Nutra Private Limited sought an advance ruling under Section 28H of the Customs Act, 1962 on the customs tariff classification of five grades of natural Astaxanthin proposed to be imported, namely AstaReal L10, AstaReal P4AF, AstaReal 50FC, AstaReal CLEAR100 and AstaReal CW25S. The applicant proposed classification under Tariff Item 3203 00 20 of the First Schedule to the Customs Tariff Act, 1975 as colouring matter of vegetable or animal origin. The products are derived from Haematococcus pluvialis microalgae and contain Astaxanthin in different concentrations and physical forms.
The applicant submitted that Astaxanthin is a naturally occurring carotenoid pigment, that the imported goods retain their character as natural colouring preparations, and that Heading 3203 specifically covers colouring matter of vegetable or animal origin. It relied, inter alia, on the HSN Explanatory Notes and foreign customs classification rulings concerning Astaxanthin preparations.
The jurisdictional Commissionerate disputed the proposed classification and contended that the goods, considering their composition, commercial presentation and intended use, were essentially dietary/nutraceutical ingredients rather than colouring preparations. The Authority examined the manufacturing process, product specifications, Safety Data Sheets, commercial literature and the intended use of each grade. It noted that the five grades are formulated differently for particular end uses: AstaReal L10 is an oil extract intended for further processing into food extracts and cosmetic operations; AstaReal P4AF is a powder intended for dietary supplements; AstaReal 50FC is an oil preparation for dietary supplements; AstaReal CLEAR100 is a water-soluble liquid intended for food or dietary applications; and AstaReal CW25S is a powder intended for dietary supplements.
The Authority considered Heading 3203, which covers colouring matter of vegetable or animal origin, including dyeing extracts and preparations based on such colouring matter. It observed that the HSN Explanatory Notes and Chapter Note 3 contemplate goods used as colouring preparations or as ingredients in the manufacture of colouring preparations. The Authority found that although Astaxanthin inherently possesses colouring properties, the subject imported products were not commercially presented or principally intended for use as colouring agents. Their manufacturer-issued product specifications and Safety Data Sheets instead identified their commercial applications in dietary supplements, food, beverages and nutraceutical products.
The Authority held that the mere presence of a pigment or colouring property did not determine classification when the preparations had been standardised, formulated and presented for nutritional or functional-food applications. The Authority also examined competing headings including Heading 1212, Heading 2309, Heading 2936, Chapter 30 and Chapter 35 and found them inapplicable. It then considered Heading 2106, covering “food preparations not elsewhere specified or included”. The Authority observed that Heading 2106 is a residuary heading applicable to food preparations not specifically covered elsewhere and that the HSN Explanatory Notes cover preparations for use, either directly or after processing, for human consumption as well as preparations consisting wholly or partly of foodstuffs used in making beverages or food preparations.
The Authority found that the imported products were formulated preparations incorporating Astaxanthin into oils, powders or water-dispersible systems with carriers, stabilisers, emulsifiers and other ingredients so as to make them suitable for dietary supplement, food, beverage and nutraceutical applications.
Their essential commercial identity and intended use were therefore as food/nutraceutical preparations rather than colouring preparations. The Authority further held that the foreign classification rulings cited by the applicant had only persuasive value and concerned products whose composition, formulation or commercial use was materially distinguishable from the goods before it. Accordingly, the Authority rejected classification under Heading 3203 and ruled that all five products—AstaReal L10, AstaReal P4AF, AstaReal 50FC, AstaReal CLEAR100 and AstaReal CW25S—are appropriately classifiable under Heading 2106, specifically Tariff Item 2106 90 99, as “Other” food preparations not elsewhere specified or included. The applicable customs duty is to be determined with reference to the notifications and levies in force on the relevant date.
