Central Excise - Classification of Cloudifiers under the Central Excise Tariff - Regarding - Central Excise - 2/87

Central Excise - Classification of Cloudifiers under the Central Excise Tariff - Regarding Circular No. 2/87 Dated 23-2-1987 [From F. No. 10/47/86-CX.1] Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Central Excise - Classification of Cloudifiers under the Central Excise Tariff - Regarding. A doubt has been raised regarding the correct classification of Cloudifiers under the Central Excise Tariff, before the commencement of the Central Excise Tariff (Amendment) Act, 1986. 2. The member has been examined in the Ministry in consultation with the Chief Chemist. The process of manufacture of Cloudifiers is reported to be as follows :- Gum Arabic is powdered and dissolved in hot water. The hot solution is filtered to remove dirt and then cooled. Thereafter brominated vegetable oil (an oil phase) is dispersed over the Gum Arabic solution (which is an aqueous phase), under high speed mixing. By the homogenisation process, the oil is subsequently made to remain in suspension in the aqueous Gum Arabic solution. The Cloudifiers, thus obtained are used for keeping flavours encapsulated while preparing non-alcoholic beverages bases. 3. Gum Arabic falls under sub-heading 1301.90 and is used as an emulsifier in many flavour emulsions. Brominated vegetable oil, falling under Chapter 15, is used as a weighting oil to increase the density of the essential oil which would otherwise float to the top and form an unsightly ring at the top of the beverage. Chief Chemist has opined that the product Cloudifier is a specially homogenised emulsion and not a simple mixture of the two ingredients. Both ingredients are functional materials and the product has neither the identity of Gum Arabic nor the essential characteristics of brominated vegetable oil. The classification of cloudifiers under Chapter 13 or Chapter 15 is, therefore, ruled out. In the circumstances it is considered that Cloudifiers are correctly classifiable under Chapter 38 of CET- as miscellaneous products of the chemical or allied industries. The Explanatory notes to the HSN explain that the chemical or other preparations falling under heading 38.23 are either mixtures (of which emulsions and dispersions are special forms) or occasionally solutions; it further states that the preparations classified under this heading may be either wholly or partly of chemical products or wholly of natural constituents. The product cloudifiers being an emulsion and known neither as Gum Arabic nor as brominated vegetable oil, is therefore, correctly classifiable under heading 38.23 of HSN. There is no entry in Central Excise Tariff corresponding to heading 38.23 of HSN and hence the cloudifiers are classifiable as 'others under sub-heading 3801.90 of Central Excise Tariff, before the commencement of the Central Excise Tariff (Amendment) Act, 1986.