2023 (4) TMI 697 - AAR - GST

Classification of goods - lamp oil (trade name - Deepa Jyothi Lamp Oil) - to be classified under tariff heading 15.18 or not - HELD THAT - It is evident that RBD Palmolein Oil is covered under tariff heading 1511 90 20. Further, Chapter Heading 1518 provides for classification of Inedible Mixtures or preparations of vegetable oils or of fractions . Refined Bleached Deodorised (RBD) Palmolein Oil is a fraction of Palm Oil obtained by a process called fractionation. The Applicant has stated that they have proposed to market one of their RBD Palmolein which is of edible grade without changing its basic and essential character as Mahara Jyothi, which is intended to be introduced as lamp oil - from the submissions of the applicant it is evident that Mahara Jyothi is nothing but edible RBD Palmolein. Though the Mahara Jyothi is marketed as lamp oil, classification can be done only as per the contents of the item and not as per the end use, unless it is specifically mentioned so. Therefore, as per the provisions of Chapter 15 of the CTA, RBD Palmolein Oil is covered under tariff heading 1511 90 20. It is found that in a AAR ruling in the case of M/s Sri Kanyakaparameshwari Oil Mills 2019 (7) TMI 619 - AUTHORITY FOR ADVANCE RULING, KARNATAKA it was held that Deepam Oil which was an inedible mixture of Gingelly oil, Palmolein oil and rice bran oil intended to use as lighting lamp for God, was classifiable under Chapter Heading 1518. As indicated in Para 5.4, Chapter Heading 1518 provides for classification of Inedible Mixtures or preparations of vegetable oils or of fractions - But in the instant case, the Mahara Jyothi oil is neither a mixture of one or more oils nor is it inedible. It is an edible RBD Palmolein and hence, the ruling of AAR in the above cited case is distinguishable. In as much as the said Mahara Jyothi oil, as per the submissions of the applicant, is edible and is RBD Palmolein without any additives or mixture of other oils, it is rightly classifiable under 1511 90 20.

Summary

Issues Involved:
1. Determination of correct classification of lamp oil.

Issue 1: Determination of correct classification of lamp oil

The Applicant, a registered Private Limited Company engaged in refining and marketing edible oils, sought an advance ruling on the classification of their product, RBD Palmolein, marketed as 'lamp oil' for use in Hindu prayer halls. They argued that this product, being of edible grade and not mixed with any other oils or perfumery material, should be classified under the same tariff heading as edible RBD Palmolein oil, which carries a 5% tax rate.

During the personal hearing, the Applicant reiterated that the lamp oil is of edible nature and should be taxed as edible oil. They provided documents, including manufacturing process details, FSSAI certifications, and packaging information, to support their claim that both their edible oil and lamp oil are the same product, only marketed differently.

Upon review, the Authority examined the relevant provisions of the Customs Tariff Act, 1975, specifically Chapter 15, which covers animal or vegetable fats and oils. It was noted that RBD Palmolein Oil falls under tariff heading 1511 90 20, which includes refined bleached deodorised palmolein. The Authority concluded that Mahara Jyothi, marketed as lamp oil, is essentially the same as the edible RBD Palmolein oil, without any additives or mixtures, and thus should be classified under tariff heading 1511 90 20.

The Authority also referenced a previous AAR ruling where a mixture of oils intended for lighting lamps was classified under Chapter Heading 1518. However, since Mahara Jyothi is not a mixture and is edible, this ruling was deemed distinguishable.

Ruling:
The Mahara Jyothi oil, an edible RBD Palmolein without any additives or mixture of other oils, is classifiable under tariff heading 1511 90 20.