9911796707
TMI Blog2022 (4) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... section notes of Chapter 15 entries to take it out of the purview of Chapter 15 and classify it under a miscellaneous entry. HFO - applicant has proposed classification under Tariff Entry 3824 for this product - HELD THAT:- Heading 1516 deals with Animal or vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not refined, but not further prepared. In the matter before me, HFO or fatty substance mixture, is a by-product of the process of refining of fish oil which has undergone processes of trans-esterification and distillation but not processed further. Therefore, HFO or fatty substance mixture merits classification under Heading 1516 and specifically under sub-heading 1516 10 00 as has been provided from in the notes to HSN - the proposed classification of this product under Heading 3824 by the applicant does not appear to be correct. As already stated, Chapter 38 deals with Miscellaneous Chemical products . The residuary chapter is meant for those goods which cannot be classified elsewhere. Heading 3824 deals with Prepared binders for foundry moulds or cores; chemical products and preparat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O :- Chemical Product Typical range CAS# Monocarboxylic fatty acids 20-90% 68002-88-0 Mono-ethyl esters of long chain fatty acids 0-60% 111-62-6 Cholesterol 5-15% 57-88-5 (e) LFO s main components are monocarboxylic fatty acids obtained from the hydrolysis and distillation of oils. LFO is obtained as distilled fatty acids. As monocarboxylic fatty acids comprises the major fraction of LFO, the appropriate customs tariff heading should be 3823, (f) HFO is produced as a by-product residue from the industrial oil refining process by chemical trans-esterification of the oil with ethanol and distillation. HFO is mainly composed of a mixture of mono-ethyl esters of long chain fatty acids. HFO s composition is as under :- (a) Mono-ethyl esters of long chain fatty acids (b) Mixture of mono-, di- and tri-, fatty acid esters of glycerol (c) Cholesterol Percentage range of constituents of HFO :- Chemical Product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic acid), in the form of ethyl esters (mono-alkyl esters) and others. The main fish species used is anchovy. Other sources of fish oil are sardine, mackerel, pollock and menhaden. In the process of producing fish oil and fish meal, some of the fatty acids from the triglycerides are released by hydrolytic splitting. The average composition of fish oil is as below :- Triglycerides (main product) 96% Free Fatty Acids (from hydrolytic splitting, impurity) 3% Cholesterol (impurity) 1% (d) For the Omega 3 industry, cholesterol and free fatty acids are considered impurities and are typically removed from the triglyceride oil to obtain a Refined Fish Oil (RFO) and the corresponding by-products or waste products, (e) Both the main by-products streams, i.e., LFO and HFO are starting raw materials for the Harticohl project. The pictorial representation of the process diagram of the Omega 3 manufacturing process is reproduced below :- (f) Fish oil (anchovy) is fed in the first step of the process with the purpose of obtaining a refined triglyceride oil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rulings have been sought. 5.2 I first take up the classification of the LFO. The classification of goods for customs is governed by the principles set forth in the General Rules of Interpretation (GIR). Rule 1 of GIR provides that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions, i.e., GIRs 2 to 6. In other words, if the goods to be classified are covered by the description of a heading and the section and chapter notes do not exclude classification in that heading, the heading would apply to the said goods. 5.3 Chapter 15 of the Customs Tariff Act, 1975 deals with Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes . The Customs Tariff Heading 1504 includes within its ambit fats and oils and their fractions, of fish or marine mammals, whether or not refined, but not chemically modified. The general chapter note to Chapter 15 of explanatory notes to the Harmonized System mentions that this chapter covers the following :- (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y alcohols. The product LFO which is derived from fish oil does not appear merit classification under this heading because of the available specific classification Entry 1504 20 and there is nothing in the relevant mandate of the said chapter or section notes of Chapter 15 entries to take it out of the purview of Chapter 15 and classify it under a miscellaneous entry. 5.4 I now take up the classification of the second product, the HFO. This is again a by-product residue and is obtained in the process when refined fish oil/tallow oil undergo trans-esterification and distillation to derive the resultant product Omega 3 concentrate. The applicant has proposed classification under Tariff Entry 3824 for this product. 5.4.1 As already mentioned in the preceding paragraphs, Chapter 15 of the First Schedule of the Customs Tariff Act, 1975 deals with Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes . Further as mentioned at Paragraph 5.3 above, the products derived from fats or oils and residues resulting from the treatment of fatty substance or of animal or vegetable waxes also merits classification under Chapter 15. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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