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2023 (9) TMI 419 - CESTAT AHMEDABAD
Classification of imported goods - BSN Syntha 6 Chocolate - BSN Truemass 1200 Chocolate - Isopure Low Carb – Chocolate - Isopure Zero Carb – Chocolate Mint - Optimum Nutrition 100% Casein-Chocolate Supreme - Optimum Nutrition 100% Whey Gold Standard- Chocolate - Optimum Nutrition 100% Whey Gold Standard- Chocolate Hazelnut - Optimum Nutrition 100% Whey Gold Standard- Chocolate Malt - Optimum Nutrition 100% Whey Gold Standard- Chocolate Mint - Optimum Nutrition 100% Whey Gold Standard- Chocolate Peanut Butter - Optimum Nutrition 100% Whey Gold Standard- Cookies and Cream - Optimum Nutrition 100% Whey Gold Standard- Double Rich Chocolate - Optimum Nutrition 100% Whey Gold Standard Isolate – Chocolate - Optimum Nutrition 100% Whey Gold Standard Isolate – Chocolate Bliss - Optimum Nutrition 100% Whey Gold Standard- Mocha Cappuccino - Optimum Nutrition 100% Whey Gold Standard- Rocky Road - Optimum Nutrition Serious Mass – Chocolate - to be classified under CTH 21061000 as claimed by Revenue or under CTH 18069040 as claimed by appellant?
AS PER RAJU, MEMBER (TECHNICAL)
HELD THAT:- There is no argument made in the appeal memorandum or in the written submissions of the appellant as to why the Supplementary Note 5(a) should not be followed in the instant case. It is apparent from the above reading of supplementary note 5(a) to Chapter 21 and that the “Protein Concentrate and Textured Protein Substances” would fall under the “heading 2106”. It is seen that the sub heading 21061000 of Customs Tariff (just like HSN) specifically covers “Protein Concentrates and Textured Protein Substances”, still a chapter supplementary note was introduced to place the ‘Protein Concentrate and Textured Protein Substances’ under heading 2106 - It is seen that it clearly states that ‘for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes’. In the instant case Supplementary Note 5(a) clearly provides that Protein Concentrate and Textured Substances would be classified under “Heading 2106”. In view of above in terms of interpretative Rule–1, the goods imported by the appellant would be classified under Heading 2106 in terms of Supplementary Note 5(a). Any other interpretation would make Supplementary Note 5(a) otiose. Since the goods are specifically classified under heading 2106 by virtue of Supplementary Note 5(a), there is no need to further go into interpretative Rule 2 to 6.
It is apparent that the various international rulings are based on harmonized system of nomenclature and have ruled that the “Protein Concentrates” of the kind imported by the appellant are to be classified under heading 21061000 if the same do not contain cocoa. However same product, “Protein Concentrates”, if containing coco would be classifiable under 1806.90.90 of HTSUS - In most cases the HSN has been totally adopted in the Schedule to the Customs Tariff Act, 1975. However, in some cases, like in case of heading 2106, the government has chosen to deviate from the language and prescription of the HSN by introducing Supplementary Notes to Chapter 21. Since all international rulings are based on the HSN, which is different from the Customs Tariff in respect of Chapter Heading 2106, no reliance can be placed on these decisions.
In case of heading 2106, the government has chosen to deviate from the prescription of the HSN by introducing Supplementary Notes to Chapter 21 which specifically classify the impugned products under ‘Heading 2106’. In these circumstances the HSN notes to the Chapter heading, and amendments made therein, which are in conflict with the supplementary notes to the Chapter, are to be ignored.
The impugned goods are rightly classifiable under Heading 2106, sub heading 2106 1000 of the Customs Tariff. The impugned order is upheld and the appeals are dismissed.
AS PER SOMESH ARORA, MEMBER (JUDICIAL),
It is thus clear that the HSN itself acknowledges and rather accepts the need for various member companies to make structural changes into their National Customs Tariff subject to guidance that Rule 1 to 5 of General Interpretative Rules (G.I.’s )of the HSN shall applied mutatis mutandis to national sub-heading by virtue of General Interpretative Rule 6, thus clearly providing the leverage for the Member Nations to make suitable changes in their custom tariffs. This respects the sovereignty of member nations as well as their fiscal and statistical needs. The concept of providing need based suitable changes in HSN is therefore, in tandem with Indian Constitution as well as he structural provisions of HSN. - This has been aptly pointed out by learned brother in course of the decision on chapter 21 of India Custom Tarff Act, 1975 (specially the heading 2106) with related supplementary notes. These supplementary notes have been in existence since inception of HSN based Custom Tariff of India. Similar changes have also been made by not only India but various other Countries beyond Chapter 97 which were originally not part of the HSN. Chapter 98 is again outcome of India’s need, as is manifested in its own Custom Tariff.
Chapter note, which is by way of supplementary note 5 seeks to define the scope and limits of heading 2106. It is thus clear that the expression “Food preparation not elsewhere specified or included” figuring in tariff heading 2106 when expanded by virtue of chapter note 5 (supplementary note) makes heading 2106 to specifically include “Protein Concentrates and Textured Protein Substances” therefore the legislature has clearly expanded the scope of tariff heading 2106 by virtue of supplementary notes 5 as brought out above. All this exercise makes even Heading 2106 also as specific in relation to Protein Concentrates and textured proteins, and other items mentioned in Chapter note 5 - net effect of supplementary note 5 in TH 2106 in Indian Custom Tariff Act is that the heading description 2106 i.e. “Food preparation not elsewhere specified or included” ceases to be a residuary head, in relation to those products which are included in heading 2106, specifically (even if by virtue of any supplementary note). Given above, it is clear that till the product has dominance of Protein Concentrates and Textured Protein Substances (sold as whey protein in the present instance) ,which is undisputed in this case as other similar Whey Protein with different flavours, have been included by the party itself in this head.
In instant case classification in favor of 2106 can be decided without resort to Explanatory Notes which in any case do not part of the legal provisions of the harmonized system. Matter can be decided with the help of statutory provisions of Indian Customs Tariff Act, 1975. There is then no need to go further. The advocate for the appellant was at length that the resort should be taken to GI-3 specially Rule 3(a) and while so asserting it has been argued that specific description shall be preferred to general description. The fallacy of the notion has already been brought out in relation to TH to indicate that how the matter can be decided by section or chapter notes.
The views of learned brother agreed upon - appeal dismissed.