2000 (12) TMI 103 - SC - Customs

Whether the products,de-oiled rice bran extraction, niger seed extraction of topioca chips and sesame seed extractions are only ingredients of animal feed and not 'animal feed' by themselves falling under Tariff Heading No. 21 of the Second Schedule to the Customs Tariff Act, 1975? Held that - While it is true that the decision in Sun Exports Corporation's case 1997 (7) TMI 117 - SUPREME COURT OF INDIA delved into animal feed but by reason of the factual situation as noticed the same is clearly distinguishable and, in fact, does not lend any assistance in the matter in issue. It is on this perspective it cannot but be held that the oil cakes and rice bran as exported by the respondents cannot thus be termed to be animal feed warranting invocation of Heading 21 of the export tariff under the Customs Act. The judgment of the Tribunal cannot be faulted in any way. Appeal dismissed.

Issues: Classification of de-oiled rice bran extraction, niger seed extraction, and sesame seed extractions as animal feed under Tariff Heading No. 21 of the Customs Tariff Act, 1975.

Analysis:
1. The core issue in this judgment revolves around the classification of de-oiled rice bran extraction, niger seed extraction, and sesame seed extractions as animal feed under Tariff Heading No. 21 of the Customs Tariff Act, 1975. The Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) had determined that since these products are ingredients of animal feed and not 'animal feed' by themselves, export duty would not be leviable on them during the relevant period.

2. The appellant strongly argued that the differentiation between products does not affect the classification under "Heading 21" of the Customs Tariff Act. The appellant contended that the products being ingredients or supplements to animal feed should fall under the scope of the said heading. The Tariff Act does not make a distinction between ingredients and animal feed, and the presence of the product as part of the whole should make it liable for export duty.

3. The Tribunal's conclusion was based on the contextual facts showing that the products in question are indeed ingredients of animal feed. The Tribunal emphasized that for export duty to apply, the product must meet the statutory requirement of being classified as animal feed. Therefore, the question of these products not falling under the definition of 'animal feed' does not arise.

4. The term 'animal feed' was not defined in the Tariff Act, leading to a reliance on the ordinary dictionary meaning and common understanding of the term. Reference was made to IS 9703-1980, which distinguishes between feeding stuffs (ingredients) and animal feed, indicating that ingredients alone cannot be considered animal feed but rather components or supplements.

5. The judgment highlighted that animal feed encompasses the total bulk that would feed an animal, including ingredients, vitamins, and minerals. The mix as a whole constitutes animal feed, not individual components. The decision in a previous case emphasized that animal feed concentrates and supplements are covered under the term 'animal feed,' unlike standalone ingredients.

6. However, the Court noted a distinction in the instant case where the products in question were not standalone animal feed or supplements. The judgment referred to a previous case involving animal feed additives to illustrate the difference in classification based on specific factual circumstances.

7. The Court's analysis of a previous case involving animal feed additives and the exemption notification for animal feed supplements demonstrated a different scenario from the current matter. The factual background of the previous case involving import duties and exemption notifications highlighted the specific classification and exemption criteria applied in that context.

8. The Court's scrutiny of the Tribunal's views revealed a minority opinion favoring exemption under a specific notification, while the majority view considered other legal precedents and amendments to relevant notifications. The Court distinguished the applicability of previous decisions based on the specific factual and legal contexts.

9. The Court concluded that the previous case involving animal feed additives did not provide relevant assistance in the current matter due to distinct factual circumstances and classification criteria.

10. Ultimately, the Court held that the products exported by the respondents, including oil cakes and rice bran, did not qualify as animal feed under Heading 21 of the export tariff under the Customs Act.

11. Consequently, the Court upheld the Tribunal's judgment, dismissing the batch of appeals without any order as to costs.

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