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Issues Involved:
1. Classification of Animal Feed Supplements under Central Excise Tariff. 2. Applicability of Chapter Notes and Interpretative Rules. 3. Determination of whether the products are synthetic preparations or derived from vegetable/animal materials. Issue-wise Detailed Analysis: 1. Classification of Animal Feed Supplements under Central Excise Tariff: The appellants are engaged in the manufacture of animal feed supplements, specifically Pentaforte and Famitone. They filed for classification under Heading No. 23.02 CET, which pertains to "preparations of a kind used in animal feeding." The Assistant Collector initially upheld this classification, noting that the products were not veterinary drugs but feed supplements, attracting a nil rate of duty. However, the Department appealed, and the Collector (Appeals) reclassified the products under Heading 29.36, which covers "Provitamins and vitamins, natural or reproduced by synthesis, derivatives thereof used primarily as vitamins, and intermixtures of the foregoing, whether or not in any solvent." The Tribunal, considering the submissions, noted that Chapter 23 covers residues and wastes from the food industries and prepared animal fodder, and it includes products obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristics of the original material. The Tribunal found that the products in question are synthetic preparations consisting of vitamins as active ingredients, with small quantities of other mineral elements or compounds. 2. Applicability of Chapter Notes and Interpretative Rules: The Tribunal emphasized the importance of Chapter Notes and the Rules for Interpretation of the Schedule. Chapter Note 1 to Chapter 23 states that Heading 23.02 includes products used in animal feeding, obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristics of the original material. The Tribunal noted that the term "includes" in this context refers to products obtained by processing vegetable or animal materials and does not extend to synthetic materials. Rule 2(B) of the Rules for Interpretation of the Schedule states that any reference in a heading to a material or substance includes a reference to mixtures or combinations of that material or substance with other materials or substances. Rule 3(c) further states that when goods cannot be classified by reference to other rules, they shall be classified under the heading which occurs last in the numerical order among those which equally merit consideration. Therefore, even if the products could be classified under both 23.02 and 29.36, Heading 29.36 would be preferred as it occurs later. 3. Determination of whether the products are synthetic preparations or derived from vegetable/animal materials: The Tribunal concluded that the products are synthetic preparations containing mixtures of vitamins as active ingredients and are not derived from vegetable or animal materials in the nature of residues or waste from the food industries. The products are therefore outside the scope of Chapter 23. The Tribunal also noted that the appellants themselves had fluctuated in their classification claims, initially indicating classification under Heading 23.02 or 29.36 and later seeking classification under 29.36 before the Collector (Appeals). Separate Judgments Delivered by Judges: The Vice President upheld the classification under Heading 29.36, emphasizing the synthetic nature of the products and the applicability of Interpretative Rules. However, Member (Judicial) dissented, arguing that the products should be classified under Heading 23.02 as animal feed supplements, considering their exclusive use for animal feeding and the inclusive nature of the Chapter Note. Final Order: In view of the majority opinion, the products were classifiable under Heading 29.36 of the Central Excise Tariff, and there was no need to interfere with this classification. The appeal was disposed of accordingly.
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