Case Law Details

Case Name : In re Afrodille Super Foods LLP (CAAR Mumbai)
Appeal Number : Advance Ruling No. CAAR/Mum/ARC/64/2021
Date of Judgement/Order : 08/11/2021
Related Assessment Year :

In re Afrodille Super Foods LLP (CAAR Mumbai)

Pumpkin seed kernels, dried but not subjected to any other preparatory or preservation processes are classifiable under Custom Tariff heading (CTH) 12129990.

Chapter 12 of the tariff covers ‘Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder’. According to the general explanatory notes to the HSN ‘Headings 12.01 to 12.07 cover seeds and fruits of a kind used lbr the extraction (by pressure or by solvents) of edible or industrial oils and fats, whether they are presented for that purpose, for sowing or for other purposes. These headings do not, however, include products of heading 08.01 or 08.02, olives (Chapter 7 or 20) or certain seeds and fruits from which oil may be extracted but which are primarily used for other purposes, e.g., apricot, peach or plum kernels (heading 12.12) and cocoa beans (heading 18.01). The seeds and fruits covered by the heading may be whole, broken, crushed, husked or shelled. They may also have undergone heat treatment designed mainly to ensure better preservation (e.g., by inactivating the lipolytic enzymes and eliminating part of the moisture), for the purpose of de-bittering, for inactivating antinutritional factors or to facilitate their use. However, such treatment is permitted only f it does not alter the character of the seeds and fruits as natural products and does not make them suitable for a specific use rather than for general use’. In the chapter 12, there are three possible headings under which pumpkin seed kernels can be considered for classification, i.e., 1207(suggested by the applicant’s representative at the time of hearing), 1209, and 1212. The heading 1207 includes ‘Other Oil Seeds and Oleaginous Fruits, whether or not broken’. Within this heading, there is a six-digit entry of 120770 for melon seeds. In the preceding paragraph 4, I have already noted that pumpkins fall under the family cucurbita under which melons also fall. However, according to HSN notes, this heading covers seeds and fruits of a kind used for the extraction of edible or industrial oils and fats, other than those specified in headings 12.01 to 12.06. In view of the above, despite the fact that pumpkins and melons belong in the same family, classification of pumpkin seed kernels under heading 1207 doesn’t appear to be appropriate in so far as, the product under consideration is intended for direct human consumption and not for extraction of edible or industrial oils and fats. Heading 1209 of the tariff include seeds, fruits and spores, of a kind used for sowing. Within this heading, there is a six-digit entry 120991 for vegetable seeds, e.g., cabbage, cauliflower, onion, pea, radish, tomato, and chilly of genus capsicum. Note 3 to chapter 12 states that Tor the purposes of heading 1209, beet seeds, grass and other herbage seeds, seeds of ornamental flowers, vegetable seeds, seeds offirest trees, seeds offruit trees, seeds of vetches (other than those of the species Vicia faba) or of lupines are to be regarded as “seeds of a kind used for sowing”. As per HSN explanatory notes, the heading 1209 includes products even if they are no longer capable of germination. However, it does not include products such as those mentioned at the end of the explanatory note, which, although intended for sowing, are classified elsewhere in the nomenclature because they are normally used other than for sowing. The principal use of pumpkin seeds is for sowing. However, seeds under consideration have been modified from their natural form by removing the shell so as to become edible. A hulled/de-husked seed no longer has its protective shell, which is one of the characteristics of a seed used for sowing. Once a seed has been hulled, it is fit only for oil extraction or human consumption rather than for sowing with the expectation of growing a crop. Therefore, process of de-husking changes principal use of seeds from for sowing to for human consumption. Further, from the application, it is clear that the seeds under consideration are primarily used for human consumption. I, therefore, find that the subject seeds are of a class or kind of goods principally used for human consumption rather than for sowing. Heading 1212 of the tariff includes locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium Intybus Sativum) of a kind used primarily for human consumption, not elsewhere specified or included. HSN explanatory notes to heading 1212 states that this group includes fruit stones and kernels and other vegetable products of a kind mainly used, directly or indirectly, fir human consumption, but not elsewhere specified or included in the nomenclature. It therefore includes kernels of peaches (including nectarines), apricots and plums (used mainly as substitutes for almonds). These products remain in the heading even though they may also be used for the extraction of oil. Pumpkin seeds are not mentioned specifically elsewhere. Further, as per the above-mentioned explanatory note, even though pumpkin seeds can be used for oil extraction, they are intended for human consumption in this instance, and therefore, heading 1212 is more appropriate compared to 1207 or 1209 as a classification entry for pumpkin seed kernels. More specifically, the impugned goods would be classifiable under sub-heading 12129990. It is to be noted that this classification is only for de-husked pumpkin seeds. Application of preparatory or preservation processes as discussed in paragraph 5 will change the classification accordingly.

In view of the foregoing discussions, I rule that pumpkin seed kernels, dried but not subjected to any other preparatory or preservation processes are classifiable under sub-heading 12129990 of the first schedule of the Customs Tariff Act, 1975. Since, the applicant is importing pumpkin seeds from China, there is no exemption from the tariff rate of duty.

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

M/s. Afrodille Super Foods LLP have filed an application on 25.08.2021 seeking an advance ruling for the classification of pumpkin seeds. The applicant is engaged in the business of import and trading of sunflower seeds and pumpkin seeds. Their imports are from China. They have, reportedly, classified pumpkin seeds under subheading 20081920 while clearing such consignments through Nhava Sheva port.

2. In their CAAR – I form, the applicant indicated that they propose to import the subject goods through the sea port of Nhava Sheva, Mumbai Customs Zone – II. Accordingly, comments from the Principal Commissioner of Customs, Nhava Sheva – I were invited. However, no comments have been received from the jurisdictional Principal Commissioner.

3. The personal hearing in the matter was conducted on 12.10.2021. Shri. Subhash Acharya, the a.uthorised representative, appeared on behalf of the applicant. No one appeared on behalf of the jurisdictional Principal Commissioner. Shri Acharya stated that the pumpkin seeds are roasted and salted and ready to consume. He also suggested that heading 1207 of the tariff might be a suitable classification entry for pumpkin seeds. However, just after the hearing was over, he e-mailed a clarification stating that “the pumpkin seeds they have been importing and for which the advance ruling has been sought ‘are not roasted and salted, hut are plain & ready to consume’ as has been confirmed by the applicant importer and requested to treat the said clarification as part of the personal hearing process held earlier. Subsequently, they also submitted a sample of said pumpkin seeds, which are being imported and for whose continued import, the present advance ruling application has been filed. Examination of the contents of the sample packet revealed that the pumpkin seeds are in the form of kernels, i.e., they are shelled or de-husked and are dried, but not roasted or salted or subjected to any other similar process.

4. I have considered all the materials placed before me. I have gone through the submissions made by the applicant in their application as well as during the personal hearing. I have also examined the sample submitted by the applicant. No reply has been received from the jurisdictional Principal Commissioner. In the absence of any comments from the jurisdictional Principal Commissioner of Customs on the impugned subject matter, I proceed render an advance ruling based on the information available before me. The issue at hand is to decide the classification of pumpkin seeds. Pumpkin seeds are seeds of pumpkins that. belong to the Cucurbita family along with watermelons, cucumbers, cantaloupes, squash, etc. These seeds are flat, green coloured and are usually enclosed within a yellow or white husk (shell). A light to dark green coloured seeds is obtained by removing the shell. The pumpkin seeds under consideration are de-husked/ hulled seeds. As per the applicant, these seeds are depository of zinc, manganese, phosphorus, copper, magnesium, protein, fatty acids, dietary fibres and iron. Pumpkin seeds are used for varied purposes. While seeds with protective shells are primarily used for sowing, de-husked seeds are used for human consumption, in food preparations or for oil extraction, etc.

5. Rule 1 of the GI Rules lays down that the titles of sections, chapters and sub-chapters 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. Since, the applicant has reported that in respect of the past and ongoing imports of pumpkin seed kernels, the classification adopted is chapter 20, I proceed to first examine that chapter. Chapter 20 of the first schedule to the Customs Tariff Act, 1975 includes within its ambit ‘Preparations of vegetables, fruit, nuts or other parts of plants’. It includes vegetables, fruits, nuts prepared or preserved using techniques like application of the preservative solutions, roasting, baking, frying etc. However, the goods under consideration in the present proceedings are only de-husked pumpkin seeds or pumpkin seed kernels. They do not appear to be roasted, salted or treated in any other manner, apart from dehydration. Since, they do not appear have not undergone any preservation or preparation processes, pumpkin seed kernels under consideration do not appear to be classifiable under chapter 20.

6. Chapter 12 of the tariff covers ‘Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder’. According to the general explanatory notes to the HSN ‘Headings 12.01 to 12.07 cover seeds and fruits of a kind used lbr the extraction (by pressure or by solvents) of edible or industrial oils and fats, whether they are presented for that purpose, for sowing or for other purposes. These headings do not, however, include products of heading 08.01 or 08.02, olives (Chapter 7 or 20) or certain seeds and fruits from which oil may be extracted but which are primarily used for other purposes, e.g., apricot, peach or plum kernels (heading 12.12) and cocoa beans (heading 18.01). The seeds and fruits covered by the heading may be whole, broken, crushed, husked or shelled. They may also have undergone heat treatment designed mainly to ensure better preservation (e.g., by inactivating the lipolytic enzymes and eliminating part of the moisture), for the purpose of de-bittering, for inactivating antinutritional factors or to facilitate their use. However, such treatment is permitted only f it does not alter the character of the seeds and fruits as natural products and does not make them suitable for a specific use rather than for general use’. In the chapter 12, there are three possible headings under which pumpkin seed kernels can be considered for classification, i.e., 1207(suggested by the applicant’s representative at the time of hearing), 1209, and 1212. The heading 1207 includes ‘Other Oil Seeds and Oleaginous Fruits, whether or not broken’. Within this heading, there is a six-digit entry of 120770 for melon seeds. In the preceding paragraph 4, I have already noted that pumpkins fall under the family cucurbita under which melons also fall. However, according to HSN notes, this heading covers seeds and fruits of a kind used for the extraction of edible or industrial oils and fats, other than those specified in headings 12.01 to 12.06. In view of the above, despite the fact that pumpkins and melons belong in the same family, classification of pumpkin seed kernels under heading 1207 doesn’t appear to be appropriate in so far as, the product under consideration is intended for direct human consumption and not for extraction of edible or industrial oils and fats. Heading 1209 of the tariff include seeds, fruits and spores, of a kind used for sowing. Within this heading, there is a six-digit entry 120991 for vegetable seeds, e.g., cabbage, cauliflower, onion, pea, radish, tomato, and chilly of genus capsicum. Note 3 to chapter 12 states that Tor the purposes of heading 1209, beet seeds, grass and other herbage seeds, seeds of ornamental flowers, vegetable seeds, seeds offirest trees, seeds offruit trees, seeds of vetches (other than those of the species Vicia faba) or of lupines are to be regarded as “seeds of a kind used for sowing”. As per HSN explanatory notes, the heading 1209 includes products even if they are no longer capable of germination. However, it does not include products such as those mentioned at the end of the explanatory note, which, although intended for sowing, are classified elsewhere in the nomenclature because they are normally used other than for sowing. The principal use of pumpkin seeds is for sowing. However, seeds under consideration have been modified from their natural form by removing the shell so as to become edible. A hulled/de-husked seed no longer has its protective shell, which is one of the characteristics of a seed used for sowing. Once a seed has been hulled, it is fit only for oil extraction or human consumption rather than for sowing with the expectation of growing a crop. Therefore, process of de-husking changes principal use of seeds from for sowing to for human consumption. Further, from the application, it is clear that the seeds under consideration are primarily used for human consumption. I, therefore, find that the subject seeds are of a class or kind of goods principally used for human consumption rather than for sowing. Heading 1212 of the tariff includes locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh, chilled, frozen or dried, whether or not ground; fruit stones and kernels and other vegetable products (including unroasted chicory roots of the variety Cichorium Intybus Sativum) of a kind used primarily for human consumption, not elsewhere specified or included. HSN explanatory notes to heading 1212 states that this group includes fruit stones and kernels and other vegetable products of a kind mainly used, directly or indirectly, fir human consumption, but not elsewhere specified or included in the nomenclature. It therefore includes kernels of peaches (including nectarines), apricots and plums (used mainly as substitutes for almonds). These products remain in the heading even though they may also be used for the extraction of oil. Pumpkin seeds are not mentioned specifically elsewhere. Further, as per the above-mentioned explanatory note, even though pumpkin seeds can be used for oil extraction, they are intended for human consumption in this instance, and therefore, heading 1212 is more appropriate compared to 1207 or 1209 as a classification entry for pumpkin seed kernels. More specifically, the impugned goods would be classifiable under sub-heading 12129990. It is to be noted that this classification is only for de-husked pumpkin seeds. Application of preparatory or preservation processes as discussed in paragraph 5 will change the classification accordingly.

7. In view of the foregoing discussions, I rule that pumpkin seed kernels, dried but not subjected to any other preparatory or preservation processes are classifiable under sub-heading 12129990 of the first schedule of the Customs Tariff Act, 1975. Since, the applicant is importing pumpkin seeds from China, there is no exemption from the tariff rate of duty.

The unused portion of the sample is hereby returned to the applicant.

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