2017 (8) TMI 1206 - AT - Customs

Classification of goods - Korean Ginseng tablets - assessee classified the goods under CTH 13021914, whereas Revenue entertained a view that the said product cannot be called as vegetable extracts and the same is correctly classifiable under CTH 21069099 as food preparations not elsewhere specified or included other than protein and concentrates textured protein substances other - whether the goods classified under CTH 13021914 or under CTH 21069099? - Held that - Tariff item 13021914 specifically mentions extracts of Ginseng (including powder). It is clear that if Ginseng extract is imported in powder form, there could be no question about its classification. However, in the present case, the objection came only because it is in tablet form. Admittedly, vegetable extracts like the present one, can be in various forms, liquid, powder or compacted tablet. As long as the item is only extract of Ginseng plant, there can be no reason for exclusion of such item from the said tariff entry. Even otherwise, the classification proposed by the Revenue is completely unconnected to the product in question. A perusal of main tariff entry 2106 will show that the said heading deals with food preparations not elsewhere specified or included. A perusal of open source information available in public domain indicates that the said Ginseng extract is considered as traditional medicine, for centuries. Extract is widely used as a generic health supplement and for various other specific requirement like muscle strength, improved concentration etc. Korean Ginseng tablets are correctly classifiable under tariff item 13021914 as vegetable extracts of Ginseng (including powder) - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of imported goods under the Customs Tariff Heading

Detailed Analysis:

1. Issue of Classification: The appeal contested the classification of imported "Ginseng tablets" under CTH 13021914 by the Revenue, which argued for classification under CTH 21069099 as "food preparations not elsewhere specified." The original authority held that the tablets were a finished product intended for use as food supplements, containing Ginseng extract and a binder.

2. Contention of Appellant: The appellant's counsel argued that Ginseng extract is meant for human consumption, and the tablets contained 98% Ginseng extract with a neutral binder, making them correctly classified under CTH 13021914. They emphasized that the physical form of the product, whether in powder or tablet form, should not alter its classification.

3. Marketability and Use: The appellant contended that Ginseng tablets were not prescription drugs but food supplement products, and the identified use and purpose of the tablets as a convenient way for consumption should not alter their classification.

4. Revenue's Argument: The Revenue supported the classification under CTH 2106 for food preparations not elsewhere specified, citing explanatory notes that considered Ginseng tablets as residual food preparations falling under this category.

5. Judgment Analysis: The Tribunal examined the competing tariff entries and the nature of products covered under them. It noted that while the Revenue classified the tablets under a residual food preparation entry, the appellant's claim for classification under vegetable extracts of Ginseng (including powder) was more specific and appropriate.

6. Reasoning and Conclusion: The Tribunal found that the tablets, containing Ginseng extract and binders, fell under CTH 13021914 as vegetable extracts of Ginseng. It critiqued the Revenue's classification under CTH 2106 as irrelevant and out of context, emphasizing that the tablets were not medicinal formulations but edible preparations widely recognized as health supplements.

7. Final Decision: After careful consideration, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal. The "Korean Ginseng tablets" were deemed correctly classifiable under CTH 13021914, emphasizing the importance of specific classification based on the nature and composition of the imported goods.