Classification of Oil can be done only as per Contents of the Item and not as per the End Use: AAR [Read Order]

Although the oil is marketed as lamp oil, the Tamil Nadu Authority for Advance Ruling (AAR) declared that the classification may only be done based on the components of the item and not the end use of the oil.

The applicant, KTV Health Food Private Limited, engaged in the process of refining, bleaching and deodorising the Crude Palm oil and Sunflower oil. Apart from manufacturing and marketing above edible oils, the applicant makes a preparation which is a mixture of edible oils like Rice bran oil, Coconut oil, Illupai oil, castor oil and Gingelly oil with perfumery material.

Further, they market the same  as their new commercial premium product with trade name as ‘Deepa Jyothi Lamp Oil’ which carries a levy of tax at 12% in full under tariff heading 15.18.

Additionally stated that as part of their business, they have proposed to introduce one of their manufactured product viz RBD Palmolein (Refined bleached deodorised palmolein) named Mahara Jyothi as ‘lamp oil’ which is of edible grade as such without being mixed with any other oils and perfumery material.

Thus the applicant accordingly seeks a ruling as to the correct classification of RBD Palmolein used as ‘Lamp Oil’ in the pooja room.

The bench of N. Usha and R. Gopalasamy observed that the RBD Palmolein Oil is a fraction of Palm Oil obtained by a process called fractionation.

Furthermore, it was noted that the production procedure for their “Roobini”-branded edible RBD palmolein is the same as the production process for Mahara Jyothi. Mahara Jyothi has no additives added, and its packaging bears the same FSSAI licence number as that for Roobini Refined Palmolein because both products go through the same manufacturing procedure.

Furthermore, the only distinction is that Mahara Jyothi edible RBD Palmolein is marketed as lamp oil and Roobini edible RBD Palmolein is promoted as cooking oil. However, Mahara Jyothi is still edible RBD Palmolein because no perfumes or other additives are added to it.

The authority ruled that the Mahara Jyothi oil, which is an edible RBD Palmole in without any additives or mixture of other oils, is classifiable under the Tariff Head 1511 90 20.

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