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Case Law Details

Case Name : In re Narang Machinery Store (CAAR Delhi)
Appeal Number : Advance Ruling No. CAAR/Del/Narang/04/2024/700 to 704
Date of Judgement/Order : 27/02/2024
Related Assessment Year :

In re Narang Machinery Store (CAAR Delhi)

Introduction: The Customs Authority for Advance Rulings (CAAR) in Delhi has delivered an important verdict on the classification of whey protein, addressing the complexities surrounding its importation under the Customs Tariff Act, 1975. This ruling, sought by M/s Narang Machinery Store, provides clarity on how whey protein products, based on their composition and added ingredients, should be classified for customs purposes.

Detailed Analysis

Background and Inquiry: M/s Narang Machinery Store filed an application for an advance ruling on the classification of various whey protein compositions. The queries centered around whether whey protein concentrate (WPC) or whey protein isolate (WPI), with or without additives like sweeteners, flavors, or digestive enzymes, could be classified under specific headings of the Customs Tariff Act.

CAAR Delhi Ruling on Whey Protein Classification

Whey Protein Composition: Whey protein is derived from milk and is a byproduct of cheese production. It is rich in protein fractions, minerals, and lactose. The process of making whey protein involves several steps including ultrafiltration, diafiltration, and microfiltration, resulting in WPC with protein levels ranging from 30% to 80% and WPI with at least 90% protein content.

Legal Framework for Classification: The classification under the Customs Tariff Act is guided by the General Rules of Interpretation of the Import Tariff and the Harmonized System of Nomenclature (HSN). The ruling sought to classify whey protein products under headings 0404 or 3502, based on their protein content and added ingredients.

CAAR’s Ruling

The CAAR’s ruling addressed three main scenarios:

1. Whey protein (WPC/WPI) without additives: Classified under heading 0404, as it falls within the natural milk constituents category.

2. Whey proteins with up to 80% protein, with additives: Still classified under heading 0404, as the additives do not change the fundamental classification.

3. Whey proteins with more than 80% protein, with additives: Classified under heading 2106, not 3502, as these are considered food preparations rather than pure dairy or albumin products.

This distinction is crucial as it affects how these products are treated for customs and importation purposes, with significant implications for importers and the dairy industry.

Conclusion: The CAAR Delhi’s ruling on the classification of whey protein under the Customs Tariff Act provides much-needed clarity for businesses involved in the importation of whey protein. By delineating the criteria based on protein content and the presence of additives, the ruling helps in streamlining customs processes and ensuring compliance with the law. This decision is a significant reference point for stakeholders in the dairy and nutrition sectors, setting a precedent for future classifications and imports of similar products.

FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, DELHI

M/s Narang Machinery Store, 65, Shardhanand Marg, G B Road, Delhi North, Delhi ­110006, having IEC No. AADPN9360M(`applicant’, in short) has filed an application (CAAR-1) for advance ruling before the Customs Authority for Advance Rulings, New Delhi (CAAR, in short). The said application was received in the Secretariat of the CAAR, New Delhi on 30.11.2023 along with enclosures in terms of Section 28H (1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’). The applicant has stated that import of ‘whey protein’ is the proposed activity and advance ruling has been sought on classification thereof under the Customs Tarriff Act, 1975 (CTA, in short) by posing questions as below:

(i) Whether whey protein i.e., whey protein concentrate (`WPC’, in short) or whey protein isolate (`WPI’, in short) (irrespective of protein content), whether or not containing sweetener/flavor/digestive enzymes/cocoa, but not a mixture of two or more WPC/WPI, are classifiable under CTH 0404 of the First Schedule to the CTA?;

(ii) Whether whey proteins comprising of two or more WPC and/or WPI, containing protein upto 80% (w/w), whether or not containing sweetener/flavor/digestive enzymes/cocoa, are classifiable under CTH 0404 of First Schedule to the CTA?; and

(iii) Whether whey proteins comprising of two or more WPC and/or WPI and containing protein more than 80% (w/w), whether or not containing sweetener/flavor/digestive enzymes/cocoa, are classifiable under CTH 3502 of First Schedule to CTA?

2.1 The applicant has stated that, they are proposing to import WPC and/or WPI of various compositions. The applicant has explained the goods in question, inter-alia stating that, ‘whey protein’ is a protein derived from milk and is a dairy product; it is a mixture of protein fractions found in whey; curdling of milk results in separation of milk solids and liquid; the liquid material obtained from curdling of milk is called `whey’; generally, ‘whey protein’ is obtained from cow milk; fat is separated from the milk; milk is thereafter pasteurized at a temperature of 70 to 80 degree centigrade and then cooled to 4 degrees centigrade; enzymes (rennet/acids) are added to such milk to separate liquid whey and casein (curds or solid portion) from milk; thus, whey is the soluble liquid part of milk, rich in protein fractions, minerals and lactose; typically, milk comprises of 20% whey and 80% casein; in its raw liquid form, whey is composed of naturally occurring macronutrients i.e., water (93%) protein (0.8%), fat (0.3%), lactose (4.8%) and minerals-referred to as ash (0.5 %); the liquid whey undergoes ultrafiltration process to obtain concentrated whey proteins which contains 30-50% protein on a dry weight basis (w/w); ultra-filtration membranes with varying pore sizes separate whey’s larger molecular weight proteins and residual fats (retentate) from their smaller molecular weight lactose, minerals, soluble salts and non-protein nitrogen are removed with the permeate; this results in reduction of lactose and increase in protein concentrate; in order to further concentrate the whey, the concentrated whey undergoes diafiltration process in which additional lactose and soluble minerals are reduced; the whey protein obtained in this process contains 50-80% protein (w/w); such whey protein undergoes microfiltration to obtain whey protein with 90% (w/w) or more protein content; the liquid whey protein fractions are further concentrated by evaporation in order to improve the physical properties of the powdered whey protein; the liquid whey further undergoes spray-drying to obtain the powdered whey protein; the most important commercial whey protein is WPC with protein levels ranging from 30% to 80% (w/w); WPI contains at least 90% protein (w/w) and contains little fat, lactose and mineral content; the process for manufacturing of whey protein having different levels of protein content is depicted below:

Diffferent level of proteins

whey protein comprises of approximately 20-22 protein fractions out of which about 7 fractions are pre-dominant, while rest are in miniscule quantity; the individual protein fractions have their own characteristic and properties; whey protein is a combination of all the protein fractions that are naturally found in liquid whey obtained from cow milk; the characteristics and properties of whey protein are different from the characteristic and properties of individual protein fractions; the manufacturers of whey protein produce raw WPI and/or WPC of different protein content or they mix two or more WPI and/or WPC to enhance the taste and make it economical, in which various flavours/cocoa/sweeteners/digestive enzymes are added by mixing or blending in order to enhance the taste and digestibility of the product; details about the products which they propose to import are as below:

Details about the products

2.2 As regards their interpretation of law and/or facts in respect of the questions on which advance ruling is required, the applicant has inter-alia stated that, the questions raised in the present application are neither pending in the applicant’s case before any officer of customs, the Appellate Tribunal or any Court nor in view of the applicant, identical issue has been decided by the Appellate Tribunal or any Court. It is further stated that as per their understanding,

(i) Category A – Whey Protein i.e., WPC or WPI (irrespective of protein content) whether or not containing sweetener/flavor/cocoa/digestive enzymes is classifiable under Heading 0404 of Schedule-I of the CTA as “Whey, whether or not concentrated or containing added sugar or other sweetening matter; products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included”;

(ii) Category B – Whey Proteins comprising of two or more WPC and/or WPI, containing protein upto 80% (w/w) and whether or not containing sweetener/flavor/cocoa/digestive enzymes is classifiable under Heading 0404 of Schedule-I of the CTA as “Whey, whether or not concentrated or containing added sugar or other sweetening matter; products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included”;

(iii) Category C – Whey Proteins comprising of two or more WPC and/or WPI and containing protein more than 80% (w/w) whether or not containing sweetener/flavor/cocoa/digestive enzymes is classifiable under Heading 3502 of Schedule-I of CTA as “Albumin (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter), albuminates and other albumin derivatives”

2.3 The applicant has further stated that, the classification of goods covered under First Schedule of the CTA is to be determined in terms of the General Rules of Interpretation of Import Tariff (‘GRI , in short); rule I of the GRI provides that the classification shall he determined according to the terms of the Heading and any related Section or Chapter Notes; rule 3(a) of GRI further provides that Heading which provides most specific description should be preferred over general Heading; classification schedule adopted under the CTA is based on the Harmonized System of Nomenclature (`HSN’, in short) which is an internationally accepted product coding system formulated under the auspices of General Agreements on Tariffs and Trade (‘GATT’); the international practice of adopting a uniform classification was done to facilitate common understanding of goods across countries and India is a signatory to the same and has undertaken to adopt HSN classification; the World Customs Organization (`WCO’, in short) issues Explanatory Notes to HSN from time to time; HSN Explanatory Notes delineate the ambit of various Chapter Headings and Sub-headings; since CTA is based on HSN, HSN Explanatory Notes have great persuasive value to understand the CTA.

2.4 The applicant has then stated that, HSN Explanatory Notes to Heading 0404 provides that:

“This heading covers whey (i.e., the natural constituents of milk which remain after the fat and casein have been removed) and modified whey (see Subheading Note 1 to this Chapter). These products may be in liquid, paste or solid (including frozen) form, and may be concentrated (e.g., in powder) or preserved.

Apart from natural milk constituents and the additives mentioned in the General Explanatory Note to this Chapter, the products of this heading may also contain added sugar or other sweetening matter.

The heading does not cover:

(a) ..

(d) Food preparations based on natural milk constituents but containing other substances not allowed in the products of this Chapter (in particular, heading 19.01). “;

thus, bare perusal of Heading 0404 and HSN Explanatory Notes reveals that whey protein either WPC or WPI (irrespective of the content of protein) in which sweetener is added, is covered under Heading 0404; in Category A products, apart from sweeteners, digestive enzymes, flavors, cocoa are added; as per Note 5(c) of Chapter 4 of the CTA, if products are obtained by replacing one or more of its natural constituents by another substance, it is excluded from Chapter 4; in this regard, HSN General Explanatory Notes to Chapter 4 states that: “This Chapter covers:

(I) Dairy products:

(D) Whey.

The products mentioned at Items (A) to (E) above may contain, in addition to natural milk constituents (e.g., milk enriched in vitamins or mineral salts), small quantities of stabilising agents which serve to maintain the natural consistency of the product during transport in liquid state (disodium phosphate, trisodium citrate and calcium chloride, for instance) as well as very small quantities of anti-oxidants or of vitamins not normally found in the product. Certain of these products may also contain small quantities of chemicals (e.g., sodium bicarbonate) necessary for their processing; products in the form of powder or granules may contain anticaking agents (for example, phospholipids, amorphous silicon dioxide).

For the purposes of Note 4 (b) to this Chapter the expression “butyric fats” means milk fats and the expression “oleic fats” means fats other than milk fats, in particular vegetable fats (e.g., olive oil)

This Chapter also excludes, inter alia, the following:

(a) Food preparations based on dairy products (in particular, heading 19.01).

(b) Products obtained from milk by replacing one or more of the natural constituents (e.g., butyric fats) by another substance (e.g., oleic fats) (heading 19.01 or 21.06).”

As per the applicant, from perusal of the above, it is evident that:

  • Food preparation based on dairy products are excluded from the purview of Chapter 4.
  • If any substance (such as stabilizers) is added to whey protein which helps to retain the character of the whey protein, the resultant continues to remain classified in Heading 0404.
  • If substances replacing one of the natural milk constituents are added (such as oleic fats) to the whey protein, the resultant is excluded from Heading 0404.

2.5.1 The applicant has also stated that in the case of Nestle India Limited v. CCE, 2018 (8) GSTL 211 (Tri,-Del), the Tribunal held that classification of products falling under Heading 0404 will not change even if flavors are added to it and it will not become a food preparation under Heading 1901; the Tribunal relied on HSN Explanatory’ Notes to Heading 1901 which states that preparation of Heading 1901 may be distinguished from the products of Heading 0404, if milk preparation is obtained by replacing one or more constituents of milk by another substance. It was further observed that the use of miniscule quantity of flavors do not replace the natural milk constituent of the product and therefore, held that it merits classification under Heading 0404 and not under Heading 1901.

2.5.2 As per the applicant, the aforesaid principle was followed in the case of Cavinkare Private Limited v. CCST & CE, (2023) 5 Cent= 20″ (Tri-Mad), thus, adding flavors to the Category A products will not change its classification and it v. ill continue to remain classified under Heading 0404; similarly, digestive enzymes (0.01% to 0.10°o by w w) arc added to the Category A products for easing digestion of the product, and it does not replace any natural milk constituent from the product; thus, addition of digestive enzymes to the Category A products does not change the classification of the product and the product continues to remain classified under Heading 0404.

2.6 Further, the applicant has stated that, addition of digestive enzymes and flavors to Category A products do not shift the classification of Category A products from Heading 0404 to Heading 2106;Heading 2106 is a residuary Heading which covers food preparations not covered by any other Heading of the Nomenclature; the relevant HSN Explanatory Note to Heading 2106 is as below:

“16) Preparations, often referred to as food supplements or dietary supplements, consisting of or based on, one or more vitamins, minerals, amino acids, concentrates, extracts, isolates or the like of substances found within foods, or synthetic versions of such substances, put up as a supplement to the normal diet. It includes such products whether or not also containing sweeteners, colours, flavours, odoriferous substances, carriers, fillers, stabilisers or other technical aids. Such products are often put up in packaging with indications that they maintain general health or well-being improve athletic performance, prevent possible nutritional deficiencies or correct sub-optimal levels of matrients.

These preparations do not contain a sufficient quantity of 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).” ;

Thus, Heading 2106 is a residuary Heading which covers products which are food preparations and are not co‘ ered by any other Heading of the Nomenclature; further, the said Explanatory Note does not specially cover whey protein but covers protein supplements which are food preparations and are obtained from other materials; hence, Category A products if covered under any other Headings ill not get covered under Heading 2106; since Category A products are most specifically covered under Heading 0404, they cannot fall under residuary Heading 2106; also, in Category A products, miniscule quantity of cocoa below 5% (w/w) is also added; in this regard, reliance is placed on the case of Sun Pharmaceutical Industries Limited, 2019 (27) GSTL 76 (MR. – GST); the Authority for Advance Ruling held that Prohance-D Chocolate product (a diabetic food product) containing 3% cocoa will not get classified under Chapter 18 as it was only used for flavoring purpose for attracting consumers; Chapter 18 covers articles of “Chocolate and other food preparations containing cocoa”; this view was affirmed by the Appellate Authority of Advance Ruling in Sun Pharmaceutical Industries Limited, 2020 (34) GSTL 377; further, in the case of Shaik lqbal Mohammed v. CCE, 2019 (25) GSTL 545 (Tri-Hyd), the Tribunal held that cereal bars containing miniscule quantity of cocoa, popularly known as ‘chikki’ cannot be considered as preparation of cocoa; thus, applying the said principle to Category A products, it is clear that adding miniscule quantity of cocoa flavor would not shift the classification of Category A products from Heading 0404 to 1806;

therefore, whey protein either WPC or WPI (irrespective of protein content) whether or not containing sweetener/flavor/digestive enzymes/cocoa i.e., Category A products is classifiable under Heading 0404 of First Schedule of CTA.

2.7 As regards, whey protein comprising of two or more WPC and/or WPI, and containing protein upto 80% or more than 80%, the applicant has stated that, as per Note 5(d) of Chapter 4 of the CTA, products which are concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on dry matter, are classifiable under Heading 3502 and are excluded from Chapter 4; as a corollary, HSN Explanatory Notes to Heading 0404 also exclude such products which are concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on dry matter, as the same are classifiable under Heading 3502; the relevant part of HSN Explanatory Notes to Heading 3502 is as below:

”(I)…..

The heading also includes whey protein concentrates which contain two or more whey proteins and have a whey protein content of more than 80% by weight, calculated on the dry matter. The whey protein content is calculated by multiplying the nitrogen content by a conversion factor of 6.38. Whey protein concentrates containing 80% or less by weight of whey proteins, calculated on the dry matter, are classified in heading 04.04.”;

from the bare perusal of Heading 3502 and HSN Explanatory Notes to Heading 3502, it is clear that it covers such products which are concentrates of whey proteins containing protein content of more than 80% and which are obtained by mixing two or more whey proteins; typically, whey protein contains about 22 different protein fractions out of which there are seven major protein fractions that altogether make up 85% of the whey protein; these major whey protein fractions are β-lactoglobulin, α-lactalbumin, bovine serum albumin, immunoglobulin, glycomacropeptide, lactoferrin, lactoperoxidase; pertinent to note that each of the individual protein fractions of whey protein have their own distinct and peculiar characteristics and functionalities and are therefore known distinctly even commercially; whey protein on the other hand is a unique combination of all 22 protein fractions naturally existing in cohesion which impart the whey protein its unique characteristics and functionality distinct from that of individual protein fractions; it is pertinent to note that whey proteins are not albumins or albuminates or their derivatives; commercially, all products of Category A, B and C are known as ‘whey protein’ and ‘whey protein concentrate’ powder in the market which are either WPC and/or WPI; consequently, ‘whey protein’ refers to the whole product which is WPIs and/or WPCs; when they are mixed together and the resultant attains a protein content of more than 80%, it falls under Heading 3502 and thereby, excluded from Heading 0404; thus, terms of Heading 3502 which include such mixtures of whey proteins having protein content more than 80% and Note 5(c) to Chapter 4 which exclude such mixtures of whey proteins having protein content more than 80%, are in tandem and cohesion with each other; this further implies that if the protein content in such mixtures of whey proteins is upto 80%, such products would be excluded from the ambit of Heading 3502 but would fall under Heading 0404; further, as discussed above, mere addition of sweetener or flavor or digestive enzymes or cocoa (upto 5%) to whey proteins, does not change the classification of products from Heading 0404 to Heading 1901, 2106 or 1806; hence, whey proteins comprising of two or more WPC and/or WPI, containing protein upto 80%, whether or not containing sweetener and/or flavor and/or digestive enzymes i.e., Category B products is classifiable under Heading 0404 of Schedule-I of CTA; as per the HSN Explanatory Notes to Chapter 35, there is no embargo on adding flavors, sweeteners and digestive enzymes to products falling under Chapter 35; in addition, there is no such embargo mentioned in HSN Explanatory Notes to Heading 3502; in this regard, reliance is placed on rule 2(b) and rule 3(a) and (b) of GRI. Rule 2(b) of GRI which states that specific headings of a substance shall include mixtures of such substances along with other substances as well; the same analogy is applicable to the Category C products; whey proteins comprising of two or more WPC / WPI or WPC with WPI, containing protein more than 80% is specifically covered under Heading 3502 and mixture of such product along with flavours, sweeteners or digestive enzymes would also be covered under Heading 3502; further, rule 3(b) states that classification of the component which gives the essential character in the mixtures shall be adopted while deciding classification of such mixtures; in the present case, whey proteins comprising of two or more WPC / WPI or WPC with WPI, containing protein more than 80% is the essential character of the product; the flavor, sweeteners and enzymes are merely ancillary to the same and does not change the essential character of the product; as stated above, the product is commercially known as ‘whey protein’ and `whey protein concentrate’ and not by its flavor or sweetener or digestive enzyme; in addition, the function of the product is to provide protein nutrition which is performed by the whey protein and not by the flavor or sweetener or digestive enzymes; flavors and sweeteners are added to add taste to the product; digestive enzymes as the name suggests are added to increase digestibility of the product; hence, adopting the classification of whey proteins comprising of two or more WPC/WPI or WPC with WPI, containing protein more than 80%, Category C products are classifiable under Heading 3502; hence, whey proteins comprising of two or more WPC and/or WPI, containing protein more than 80%, whether or not containing sweetener and/or flavor and/or digestive enzymes i.e., Category C products is classifiable under Heading 3502 of Schedule-I of CTA.

2.8 In light of the above submissions, the applicant has concluded that the following products proposed to be imported by them should be classified as under:

Products proposed to be imported

3. A personal hearing in the matter was conducted on 21.02.2024. During the personal hearing, advocate representing the applicant started by drawing attention towards the comments of the concerned Commissioner on their application and mentioned that the comments express the opinion regarding classification similar to their submissions in the application for advance ruling. He further reiterated the submissions made in their application for advance ruling. He also referred to a few rulings/judgements in favour of their submissions for classification of the goods in question. Replying to the question raised by the Authority, advocate informed that they would be importing the goods in bulk packing which after importation would be repacked in smaller packages. He also added that they have to still finalize the import modalities.

4. Comments on the application for advance rulings have been received from the concerned Commissionerate wherein it is inter-alia stated that, on perusal of Tariff Heading 0404, it can be seen that whey, whether or not concentrated , or containing added sugar or other sweetening matter can be classified under Heading 0404; as per explanatory notes to Heading 0404, this heading does not cover albumins (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter); further, as per explanatory notes of Heading 3502, this heading includes whey protein concentrates which contain two or more whey proteins and have a whey protein content of more than 80% by weight, calculated on the dry matter; further, it is also provided under the explanatory notes to heading 3502 that whey protein concentrates containing 80% or less by weight of whey proteins, calculated on the dry matter, are classified in Heading 0404; this would imply that concentrates of two or more whey proteins containing by weight more than 80% whey proteins, calculated on the dry matter would not be covered by Heading 0404; the same would by covered by Heading 3502; however, there is no bar/specification in respect of protein content when it is not a mixture of two or more whey proteins for their classification under Heading 0404. In respect of Question No (i), above, it is inter-alia stated that it appears that single protein, irrespective of content by percentage, can be classified under Heading 0404; thus, it appears that the product as per description given in (a) above is classifiable under Heading 0404. In respect of Question No (ii), above, it is inter-alia stated that it appears that such products are classifiable under Heading 0404. In respect of Question No (iii), above, it is inter-alia stated that it appears that the product is classifiable under Heading 3502. Further, it is commented that category A&B products are classifiable under Heading 0404 and category C products under Heading 3502.

5. The applicant was provided the comments received from the concerned Commissionerate.

6. I have taken into consideration all the materials placed on record in respect of the subject goods including the submissions made by the applicant during the course of personal hearing. I have gone through the comments of the concerned Commissionerate and response of the applicants to the comments. 1, therefore proceed to decide the present application regarding classification of the said goods in question, on merits, on the basis of information available on record as well as the existing legal framework having bearing on the classification of the subject goods under the First Schedule of the Customs Tariff Act, 1975. In this regard, it is also felt that reference to Harmonized Commodity Description and Coding System of the World Customs Organization, to which India is a signatory, would also be useful.

7.1 I note that the dairy products are covered under Chapter 4 of the Customs Tariff and whey is one of the dairy products. As per Explanatory Notes of Chapter 4 of the Harmonized Commodity Description and Coding System of World Customs Organization, whey is the natural constituents of milk which remain after the fat and casein have been removed; also whey may contain in addition to natural milk constituents (e.g. milk enriched in vitamins), small quantities of stabilizing agents, as well as very small quantities of anti-oxidants or of vitamins not normally found in the product. Further the Explanatory Notes of Heading 0404 (where whey is classified) provides that whey may be concentrated (e.g. in powder), and apart from natural milk constituents and additives as mentioned in the General Explanatory Notes to Chapter 4, the products of Heading 0404 may also contain added sugar or other sweetening matter. However, it is also laid down that food preparations based on natural milk constituents but containing other substances not allowed in the products of this chapter (in particular, heading 1901), are not covered under the heading. Also, the Explanatory Notes lays down that Heading 0404 does not cover Albumins (including concentrates of two or more whey proteins consisting by weight more than 80% whey protein, calculated on the dry matter (heading 3502). In light of the above, on further examination of the issue, it is also noted that Heading 2106 contains food preparations not elsewhere specified or included and the heading includes preparations often referred to as food supplements as dietary supplements consisting or based on, one or more vitamins, minerals, amino acids, concentrates, extracts, isolates or the like of substances found within foods, put up as a supplement to the natural diet; it includes such products whether or not also containing sweetners, colours, flavours, odiferous substances, carrier, fillers, stabilizers, or other technical aids. Further as per the Explanatory Notes of Heading 3502, the heading includes whey protein concentrates which contains two or more whey proteins and have whey protein content of more than 80% by weight, calculated on the dry matter; the whey protein concentrates containing 80% or less by weight of whey proteins, calculated on dry matter are classified in Heading 0404.

7.2 Further, it is noted that as per HSN explanatory notes, Chapter 4 covers dairy products which includes whey and whey may contain, in addition to natural milk constituents, small quantities of stabilizing agents which serve to maintain natural consistency of the product during transport in liquid state as well as very small quantities of anti-oxidants or of vitamins not normally found in the product. Certain of these products may also contain small quantities of chemical necessary for their processing, products in the form of powder may contain anticaking agents. The EN also provides that the Chapter excludes products obtained from whey, containing by weight more than 95% lactose, expressed as anhydrous lactose, calculated on the dry matter. Chapter 4 excludes products obtained from milk by replacing one or more of the natural constituents (e.g. butyric fats) by another substance (e.g. oleic fats). It also excludes casein (3501), milk albumin (3502) and hardened casein (3913). Heading 0404 covers Whey, whether or not concentrated or containing added sugar or other sweetening matter; products consisting of natural milk constituents, whether or not containing added sugar or other sweetening matter, not elsewhere specified or included. Sub-heading 040410 covers Whey and modified whey, whether or not concentrated or containing added sugar or other sweetening matter. As per EN, heading 0404 does not cover products obtained from whey, containing by weight more than 95% lactose, expressed as anhydrous lactose, calculated on the dry matter (1702), Albumins (including concentrates of two or more whey proteins, containing by weight more than 80% whey proteins, calculated on the dry matter)(3502). As per EN of 3502, it is inter-alia provided that the heading also includes whey protein concentrates which contain two or more whey proteins and have a whey protein content of more than 80% by weight, calculated on the dry matter. The whey protein content is calculated by multiplying the nitrogen content by a conversion factor of 6.38. Whey protein concentrates containing 80% or less by weight of whey proteins, calculated on the dry matter, are classified in heading 0404.

7.3 I also note that rule I of GRI inter-alia provides that the titles of Sections, Chapters and sub­chapters 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.

7.4 I note that goods in question for which ruling has been sought are food preparations and there is specific classification for ‘Food preparations not elsewhere specified or included’ under the heading 2106.

7.5 From the above, it may inter-alia be gathered that whey protein concentrates which contain two or more whey proteins consisting by weight more than 80% protein, calculated on the dry matter is classifiable under Heading 3502. Whey protein concentrates containing 80% or less by weight of whey proteins, calculated on the dry matter, are classified in heading 0404. Also, for classification under Heading 0404, added sugar or other sweetening matter along with small quantities of stabilizing agents and very small quantities of anti-oxidants or of vitamins riot normally found in the product, are permitted. As per Explanatory Notes of Chapter 4 of the Harmonized Commodity Description and Coding System of World Customs Organization, whey is the natural constituents of milk which remain after the fat and casein have been removed. It may be noticed that flavours or cocoa or digestive enzymes are not permissible additives in terms of the Explanatory Notes. Thus, by this criterion alone, the composition of goods in question containing cocoa or flavours or digestive enzymes would get excluded from Chapter Heading 0404. The only additives which are permissible under the heading 0404 are: stabilizing agents, anti-oxidants, vitamins, anti-caking agents, added sugar and other sweetening matter. It is noticed that a few composition of the product which the applicant intend to import contain cocoa or flavours or digestive enzymes, however, such compositions are not explicitly permitted for classification under Heading 0404. Further, whey, a dairy product is the natural constituents of milk which remain after the fat and casein have been removed and other dairy products covered under Chapter 4 are: milk, cream, butter milk, curdled milk and cream, yogurt, kephir, other fermented or acidified milk and cream, products consisting of natural milk constituents , not elsewhere specified or included, butter and other fats and oils derived from milk, dairy spreads, cheese and curd which were all directly made from milk whereas ‘whey proteins’ as explained by the applicant are not directly derived like the others. Thus, the compositions/preparations where WPI or WPC or WPI and WPC are mixed with cocoa or flavours or digestive enzymes, could not therefore, be classified under Chapter 4 or Chapter 35, as the case may be. The compositions of WPC or WPI or WPC & WPI, apart from sweetening matter or added sugar, may contain cocoa or flavours or digestive enzymes and such composition of the goods in question, being food preparation are specifically covered under Heading 2106. On perusal of Section IV of the Import Tariff, it is noticed that Chapter 21 classifying ‘Miscellaneous Edible Preparations’ is the most suitable for classification of such food preparations/edible preparations for human consumption.

8. On the basis of foregoing, I intend to answer the questions posed for advance rulings, as below:

(i) Whey protein, WPC or WPI (irrespective of protein content), but not a mixture of two or more WPC/WPI, if not containing flavor/digestive enzymes/cocoa, are classifiable under Heading 0404 of the First Schedule to the CTA and whey protein, WPC or WPI (irrespective of protein content), but not a mixture of two or more WPC/WPI, if containing flavor/digestive enzymes/cocoa, are classifiable under Heading 2106 of the First Schedule to the CTA.

(ii) Whey proteins comprising of two or more WPC and/or WPI, containing protein upto 80% (w/w), if not containing flavor/digestive enzymes/cocoa, are classifiable under Heading 0404 of First Schedule to the CTA and whey proteins comprising of two or more WPC and/or WPI, containing protein upto 80% (w/w), if containing flavor/digestive enzymes/cocoa, are classifiable under Heading 2106 of the First Schedule to the CTA.

(iii) Whey proteins comprising of two or more WPC and/or WPI and containing protein more than 80% (w/w), whether or not containing sweetener/flavor/digestive enzymes/cocoa. are classifiable under Heading 2106 of the First Schedule to the CTA, being food preparations.

9. I rule accordingly.

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