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2023 (2) TMI 674 - AAR - CustomsClassification of import goods - omega-6 fatty acid product, namely Lutalin - to be classified under heading 2302 of CETA, 1985 or heading 2309 of the Customs Tariff Act, 1975? - HELD THAT - The product is sold as animal feed for the nutritional needs of the pigs and cows. A certificate issued by the German Government s certifying agency certifies that these products are feed supplements and are of animal grade. Further, the Indian Council of Agricultural Research (ICAR), as per the letter issued by the Department of Animal Husbandry, Dairying and Fisheries, dated 18-6-2012, CLA 10% coated with bypass fat can be used as a feed additive for animal feeding. Therefore, on the basis of trade parlance and the opinion of experts, it appears that the said products are used for animal feed. These products are not covered under the exclusion list provided in the HSN Explanatory Notes. The Lutalin is classifiable under Heading 2309 and more specifically, under sub-heading 2309 90 90 of the First Schedule to the Customs Tariff Act, 1975.
Issues Involved:
1. Classification of the product Lutalin under the Customs Tariff Act, 1975. Issue-wise Detailed Analysis: 1. Classification of the Product Lutalin: M/s. BASF India Limited filed an application seeking an advance ruling on the classification of Lutalin, a product containing 28% Omega-6 fatty acid (C18:2) methyl ester, used as a feed additive for animal feeding. The product is imported and used in animal feed without further processing. The applicant argued that Lutalin should be classified under Heading 2309 of the Customs Tariff Act, 1975, which pertains to preparations used in animal feeding. They supported their claim with Circular No. 80/54/2018-GST and Circular No. 188/22/95-CX, which clarify that products used as food supplements for animals and not capable of general use fall under Heading 2309. The application was forwarded to jurisdictional Commissioners of Customs, but no comments were received. During the hearing, the applicant presented technical data, manufacturing processes, and product labels. They also provided a certificate from a German certifying agency, affirming the product's use as a feed supplement. The authority considered all materials and noted that the active ingredient in Lutalin is Trans-10, cis-12 Conjugated Linoleic Acid (CLA) methyl ester, a polyunsaturated fatty acid. The product contains 56% CLA, with 28% each of two specific isomers. The applicant failed to submit detailed compositions and manufacturing flow charts, so the authority referred to a scientific opinion from the European Food Safety Authority to determine the product's composition. The opinion revealed that Lutalin contains 28% CLA (t10,c12)-ME, 28% CLA (c9,t11)-ME, and other fatty acids from sunflower oil. The authority examined whether the remaining components could be considered permissible impurities. The HSN explanatory notes to Chapter 29 state that impurities must result solely from the manufacturing process. However, the high percentage of other fatty acids in Lutalin suggested they were deliberately left to render the product suitable for specific use rather than general use. The authority referred to Chapter 23 notes, which state that Heading 2309 includes products used in animal feeding, not elsewhere specified or included. The HSN explanatory notes further elaborate that Heading 2309 covers complete feeds, supplementary feeds, and premixes. Lutalin, being a combination of active CLA and other fatty acids, falls under the category of premixes. The applicant declared that Lutalin is exclusively used in animal feed and submitted a certificate from a German certifying agency supporting this claim. Board Circular No. 188/22/95-CX and Circular No. 80/54/2018-GST clarified that preparations containing active substances for animal feeding fall under Heading 2309. The authority also referred to the decision in Tetragon Chemie (P) Ltd. v. Collector of C. Ex., which emphasized the importance of end-use in determining classification under Heading 2309. Based on the product's composition, technical literature, trade parlance, and expert opinions, the authority concluded that Lutalin is used for animal feed and is not covered under the exclusion list in the HSN explanatory notes. Therefore, the product merits classification under Heading 2309, specifically under sub-heading 2309 90 90 as 'Other'. Ruling: Lutalin is classifiable under Heading 2309 and more specifically, under sub-heading 2309 90 90 of the First Schedule to the Customs Tariff Act, 1975.
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