1988 (8) TMI 282 - AT - Customs

Summary

Issues Involved:
1. Whether the products exported by the respondents, specifically de-oiled rice bran extraction, sesame seed extraction, rape seed extraction, and tapioca chips, qualify as "animal feed" under Heading 21-CTA, thereby attracting duty.
2. The applicability of the Tribunal's decision in the Aries Agrovat case to the current appeals.
3. The relevance of the method of oil extraction (solvent extraction vs. expeller process) to the classification of the products as animal feed.
4. The significance of trade descriptions and dictionary meanings in determining whether the products are animal feed.
5. The impact of the absence of a preceding show cause notice on the validity of the demands.

Detailed Analysis:

1. Classification of Products as Animal Feed:
The primary issue was whether the products exported by the respondents, which include de-oiled rice bran extraction, sesame seed extraction, rape seed extraction, and tapioca chips, qualify as "animal feed" under Heading 21-CTA, thereby attracting duty. The Tribunal noted that the products in question are residues of oil-seeds after oil extraction, primarily by the solvent extraction method. The Tribunal concluded that these products are not complete animal feeds but rather ingredients or supplements to animal feeds. This conclusion was drawn from various Indian Standard publications and other literature, which consistently described these products as supplements or ingredients rather than complete animal feeds.

2. Applicability of Aries Agrovat Decision:
The Tribunal discussed the relevance of its earlier decision in the Aries Agrovat case, which dealt with animal feed supplements. It was argued by the Department that the products in question, while not complete feeds, should still be classified as animal feed for duty purposes. However, the Tribunal found that the observations in the Aries Agrovat case, which defined animal feed as a complete and balanced diet for animals, were applicable. The products in question, being supplements, did not meet this definition.

3. Method of Oil Extraction:
The method of oil extraction was considered relevant to the classification of the products. The Tribunal noted that solvent-extracted oilcakes were initially not permitted for animal feed due to concerns about residual solvents being toxic. The Tribunal found no evidence that the exported products had been treated to remove these solvents, further supporting the conclusion that they could not be classified as animal feed.

4. Trade Descriptions and Dictionary Meanings:
The Tribunal emphasized the importance of trade descriptions and dictionary meanings in determining the classification of the products. It was noted that the term "animal feed" is not defined in the tariff, necessitating reliance on common parlance, dictionary meanings, and trade descriptions. The Tribunal found that the products were consistently described in trade documents and literature as supplements or ingredients rather than complete animal feeds.

5. Absence of Show Cause Notice:
The respondents raised several technical objections, including the absence of a preceding show cause notice, which they argued invalidated the demands. However, the Tribunal found it unnecessary to address these technical objections, given its conclusion that the products were not animal feeds and thus not subject to duty under Heading 21-CTA.

Conclusion:
The Tribunal dismissed the appeals, upholding the Collector (Appeals)'s decision that the products in question were not animal feeds and therefore not subject to duty under Heading 21-CTA. The Tribunal also noted that there were no appeals or cross-objections regarding the remand ordered by the Collector (Appeals) for certain products.