2021 (3) TMI 1325 - AAR - Customs

Classification of goods - Exemption from Customs Duty - Spinetoram - eligible for exemption under the Entry No. 249 of the Notification No. 50/2017-Cus., dated 30-6-2017 - classifiable under sub-heading 3808 99 10 of the Customs Tariff or not - HELD THAT - Customs database indicates that it is currently being classified under sub-heading 3808 91 99. It is seen that under the tariff classification scheme of UK, Spinetoram is classified under Tariff Item 3808919060 Insecticides - others - Spinetoram (ISO) (CAS RN 935545-74-7), preparation of two spinosyn components (3 -ethoxy-5,6-dihydro spinosyn J) and (3 -ethoxy-spinosyn L) . Since, the purpose of the present proceedings is not to provide a ruling on the classification of Spinetoram , it is sufficient to conclude that Spinetoram is classifiable under Chapter 38 of Indian Customs Tariff, so long as it is continued to be imported in a form which is in conformity with the conditions laid down in the tariff. The insecticide is a sub-set of pesticide. Spinetoram is derived from the fermentation of Saccharopolyspora spinosa and it is then chemically modified to create unique active ingredients. Its manufacturing involves some degree of synthetic modification. This is the reason why the Commissioner of Customs (Import), ACC, Mumbai is of the view that it is not a biogenic product - Import of insecticides/pesticides is subject to the provisions of the Insecticides Act, 1968. As per provisions of Section 9 of the said Act, no insecticides are allowed to be imported without a valid certificate of registration or an import permit issued by the Secretary, Central Insecticide Board Registration Committee under his signature and office seal. Any person desiring to import or manufacture any insecticide may apply to the Registration Committee for the registration of such insecticide and there shall be a separate application for each such insecticide to obtain the certificate of registration. The manufacturing process of Spinetoram involves chemical/synthetic modification of fermented Saccharopolyspora Spinosa is not sufficient to reject the applicant s assertion that it is a bio-pesticide - the product in question is classifiable under Chapter 38; is a bio-pesticide and is based on Saccharopolyspora spinosa - thus, Spinetoram is eligible for the benefit provided under Entry No. 249 of the Notification No. 50/2017-Cus., dated 30-6-2017, as amended.

Summary

Issues:
1. Eligibility of the product 'Spinetoram' for exemption under Entry No. 249 of Notification No. 50/2017-Cus.

Analysis:

Issue 1: Eligibility of 'Spinetoram' for Exemption

The applicant sought an advance ruling on whether 'Spinetoram' is eligible for exemption under Entry No. 249 of Notification No. 50/2017-Cus. 'Spinetoram' is described as a new chemical in the spinosyn class of insecticides, derived from Saccharopolyspora spinosa fermentation and chemically modified for improved insecticidal activity. The applicant argued that 'Spinetoram' meets the conditions for exemption under the notification, including classification under Chapter 38, being a bio-pesticide, and based on Saccharopolyspora spinosa.

The Commissioner of Customs (Import), ACC, Mumbai, opined that 'Spinetoram' is a semi-synthetic insecticide, not a bio-pesticide, relying on a study by John D. Stark et al. The applicant provided technical literature supporting 'Spinetoram's origin and characteristics, including test reports and a registration certificate. The applicant contended that 'Spinetoram' falls under sub-heading 3808 99 10 of the Customs Tariff and is meant for retail supply.

The ruling authority analyzed the materials, noting that 'Spinetoram' is a semi-synthetic insecticide based on Saccharopolyspora spinosa. It cited literature confirming 'Spinetoram's classification under Chapter 38 and its retail packaging. The authority highlighted that 'Spinetoram' targets harmful insects, aligning with the definition of insecticides. The authority also emphasized that 'Spinetoram' registration under the Insecticides Act, 1968, supports its classification as a bio-pesticide.

Conclusively, the ruling declared that 'Spinetoram' qualifies for the exemption under Entry No. 249 of Notification No. 50/2017-Cus., dated 30-6-2017, as it fulfills the criteria of being a bio-pesticide based on Saccharopolyspora spinosa under Chapter 38 of the Indian Customs Tariff.

This comprehensive analysis of the legal judgment provides a detailed overview of the issues involved and the ruling provided by the Customs Authority for Advance Ruling, Mumbai, regarding the eligibility of 'Spinetoram' for exemption under the specified customs notification.