2005 (2) TMI 848 - SC - Central Excise

Issues Involved:
1. Classification of the product 'Recovit' under the correct tariff heading.
2. Validity of the Assistant Commissioner's decision based on the Dy. Chief Chemist's report.
3. Reliance on the judgment of Tetragon Chemie (P) Ltd. by the CEGAT.
4. Applicability of Trade Notice No. 34/1990 and Circular No. 188/22/96-CX.
5. Examination of the product composition and its use.

Detailed Analysis:

1. Classification of the product 'Recovit' under the correct tariff heading:
The primary issue in this appeal is the classification of 'Recovit,' an animal feed supplement. The question is whether it should be classified under Tariff Heading 29.36 as an intermixture of vitamins or under Tariff Heading 23.02 as animal feed. The Assistant Commissioner initially classified 'Recovit' under Chapter Sub-heading 2936.00 based on the Dy. Chief Chemist's report, which identified it as an organic chemical (intermixture of vitamins). However, the Commissioner (Appeals) and the CEGAT reclassified 'Recovit' under Chapter Sub-heading 2302.00 as animal feed, noting that it contains stabilizers, anti-oxidants, and solvents, and is used exclusively for animal feeding.

2. Validity of the Assistant Commissioner's decision based on the Dy. Chief Chemist's report:
The Assistant Commissioner's decision was based on the Dy. Chief Chemist's report dated 6-12-1990, which identified 'Recovit' as an organic chemical. However, the Commissioner (Appeals) and the CEGAT found that 'Recovit' is used exclusively as animal feed, containing vitamins, stabilizers, anti-oxidants, and solvents. This broader composition supports its classification under Chapter Sub-heading 2302.00 as animal feed, rather than as a mere intermixture of vitamins under Chapter 29.

3. Reliance on the judgment of Tetragon Chemie (P) Ltd. by the CEGAT:
The CEGAT relied on the judgment of Tetragon Chemie (P) Ltd. v. CCE, Bangalore, where it was held that products containing vitamins and other ingredients used as animal feed should be classified under Tariff Heading 23.02. This precedent was upheld by the Supreme Court in Collector of Central Excise, Bangalore v. Tetragon Chemie P. Ltd., affirming that animal feed supplements fall under Heading 23.02.

4. Applicability of Trade Notice No. 34/1990 and Circular No. 188/22/96-CX:
Trade Notice No. 34/1990 and Circular No. 188/22/96-CX were significant in this case. Trade Notice No. 34/1990 initially suggested classifying intermixtures of vitamins under Heading 29.36. However, Circular No. 188/22/96-CX clarified that preparations containing active substances like vitamins, along with stabilizers and anti-oxidants, used in animal feeding should be classified under Heading 23.02. This circular modified the earlier Trade Notice and supported the classification of 'Recovit' under Heading 23.02.

5. Examination of the product composition and its use:
The composition of 'Recovit' includes vitamins, stabilizers, anti-oxidants, and solvents. It is used exclusively as animal feed and is not fit for human consumption. This composition and usage align with the classification under Chapter Sub-heading 2302.00 as animal feed. The test memo and chemical analysis confirmed that 'Recovit' contains ingredients beyond mere vitamins, supporting its classification as an animal feed supplement.

Conclusion:
The Supreme Court upheld the classification of 'Recovit' under Tariff Heading 23.02 as animal feed, agreeing with the CEGAT and Commissioner (Appeals). The court found that the product's composition and exclusive use for animal feeding justified this classification. The appeal was dismissed, affirming the lower authorities' decisions and the principles established in the Tetragon Chemie case.

← Previous Next →