2024 (11) TMI 749 - AT - Customs

Classification - appellant imported goods known as Tetramethyldodehdronaphto Furan (TF) - sole reason given in the show cause notice for seeking change in classification is that the same are used as raw material for manufacturing synthetic perfumery compound and in fragrances and in flavour formulas - counsel pointed out that the goods imported by them are Aroma Chemicals which on their own cannot be called perfume base - HELD THAT - The classification has to be determined in terms of description in various tariff headings read with chapter and section notes read with rules of interpretation. It is seen that no reliance has been placed either on the description in the tariff heading or on chapter and section notes or on the rules of interpretation. Rules of interpretation are very clear that in so far as the goods are specifically covered under specific heading read with the chapter notes and section notes then the classification is to be made in the said heading. The Order-in-original comes to a conclusion that goods are a mixture with a basis of ode-ferrous substances and is used as raw material in industry and therefore it would be classifiable under heading 33.02 of the Custom Tariff. It is seen that note 1(b) prescribes that products containing two or more isomers of same compound remain classifiable in Chapter 29 itself. The product is admittedly a mixture of two isomers and thus classifiable in Chapter 29 in term of Chapter Note 1(b). The impugned order relies on Chapter Note 1(e) to Chapter 29 to assert that when a product mentioned in clause 1(a), 1(b) or 1(c) is dissolved in other solvents making it suitable for only a specific use then it can be taken out of chapter 29. We find that in the instant case there is no evidence produced that any solvent was part of imported product. Moreover even if it contains any solvent, no evidence has been produced that it makes suitable only for a single use. Thus Chapter Note 1(e) is not applicable to the facts of the case. Thus no merit in impugned order. The same is set aside and appeal is allowed.

Summary

Issues:
Classification of imported goods as perfume base, reliance on chemical nomenclature, misclassification by the appellant, interpretation of chapter notes for classification.

Analysis:
The appeal was filed against the rejection of classification claimed by the appellant for goods imported by them. The appellant argued that the imported goods were aroma chemicals that, when mixed with essential oils, became a perfume base for manufacturing synthetic perfumery compounds used in industrial fragrances. The appellant emphasized that the imported item did not contain alcohol and was governed by chemical nomenclature rules, specifically the IUPAC nomenclature. The appellant contended that the product should be classified under Chapter Tariff Heading 2932 as a Heterocyclic Compound, citing examples and explanations to support their classification claim.

The appellant raised concerns regarding the description of the product as a synthetic compound for manufacturing synthetic perfumery compounds in the order-in-original, highlighting a lack of clarity and self-contradiction in the adjudicating authority's reasoning. The appellant argued that the product, despite being a mixture of isomers, did not change its classification. They also presented evidence of the same product being classified under a specific heading in various custom formations, indicating consistency in classification across different jurisdictions.

The authorized representative relied on the impugned order, which rejected the appellant's classification claim based on the intended use of the goods in manufacturing synthetic perfumery compounds. The order-in-original cited reasons for rejecting the classification claimed by the appellant, emphasizing the end use of the goods for manufacturing industrial fragrances. However, the appellate tribunal found the grounds for seeking a change in classification untenable, emphasizing that classification should be based on tariff headings, chapter notes, and rules of interpretation.

The tribunal analyzed the relevant chapter notes and rules of interpretation to determine the correct classification of the goods. It concluded that the product, being a mixture of isomers, should be classified under Chapter 29 based on Chapter Note 1(b) regarding mixtures of isomers of the same compound. The tribunal rejected the application of Chapter Note 1(e) to Chapter 29, as there was no evidence that the product contained solvents making it suitable for a specific use. Ultimately, the tribunal set aside the impugned order and allowed the appeal based on the correct interpretation of classification rules and notes.