2026-VIL-1731-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs - Classification of imported DHA algae oil - Chapter 15 versus Chapter 29 and Heading 2106 of Customs Tariff - Appellant imported DHA algae oil and classified it as an unsaturated acyclic monocarboxylic acid under Chapter 29, claiming the benefit of exemption notification - Department alleged misdeclaration, reclassified the goods under Heading 1515 as other fixed vegetable oil, confirmed differential duty with interest, ordered confiscation with redemption fine and imposed penalties -- Whether the imported goods are classifiable under Chapter 29 as claimed by the Appellant or under Heading 1515 as held by the Department - HELD - Classification is determined by the terms of the headings and Section or Chapter Notes under GRI 1, with assistance from the Harmonized System of Nomenclature and its Explanatory Notes. Chapter 15 covers animal or vegetable fats and oils, and the imported DHA algae oil is an edible oil derived from plant source, in which fatty acids make up almost the entire structure. Chapter Note 1(e) of Chapter 15 does not exclude fatty acids of edible oil. Heading 2916 applies only to separate chemically defined organic compounds, and excludes oleic acid of purity less than 85% and other fatty acids of purity less than 90% - The test reports show that the goods contain DHA at about half and several other fatty acids, with none of the required purity. The goods are therefore a mixture of fatty acids as constituent of edible oil and not a pure DHA fatty acid. The end use of the product in the food industry is not relevant for classification unless the Tariff entry mentions it, and it is the product at the time of importation, its appearance and composition which matter. Heading 2916 and Heading 2106 are not about oils, and merely because a constituent such as linolenic acid is mentioned, an oil containing it cannot fall under Heading 2916. As per GRI 1 and GRI 2, a reference to a substance includes mixtures, and Heading 1515 is the most specific among the three headings - The goods are classifiable under Chapter 15 and were wrongly classified under Chapter 29, the benefit of the exemption notification was wrongly claimed, and the demand of differential duty with interest, penalty and appropriation of the bank guarantee is upheld - The appeal is dismissed
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