2007 (7) TMI 391 - AT - Customs

Classification of imported goods - mixing Vitamin-E with silica - Goods appropriately be classifiable under CTH 2936.28 attracting basic Customs duty (a) 35% and under CETH 2936.00 attracting CVD @ 16% - demand notice issued for recovery of the differential amount of duty from the importer - HELD THAT - The Chemical Examiner s report confirms that the item is a preparation containing Vitamin-E and silica and that such compositions are known to find use as additives in animal feeds. The Chemical Examiner, in his subsequent clarification, appears to have confirmed that silica was used as a carrier for the vitamin. The appellant has no case that the goods imported by the respondents was used in any manner other than as an animal feed additive. For these reasons, learned Commissioner (Appeals) has rightly classified the goods under Heading 23.09 and SH 2309.90. In the case of Ranbaxy Laboratories 1994 (5) TMI 67 - CEGAT, NEW DELHI , the Tribunal had classified synthetic preparations containing mixtures of vitamins under Heading 29.36 of the Schedule to the CETA despite the presence of some minerals and materials therein. This decision of the Tribunal has been relied on by the appellant. But, as rightly pointed out by the consultant, the said decision was set aside by the Apex Court 2002 (12) TMI 660 - SC ORDER . The Apex Court classified the above synthetic preparations under Heading 23.02 of the CETA Schedule. It is also noticed that a Larger Bench of the Tribunal in the case of Tetragon Chemie P. Ltd. v. Collector of Central Excise 1998 (9) TMI 390 - CEGAT, NEW DELHI , classified animal feed supplements under Heading 23.02 of the CETA Schedule after rejecting the Department s claim for classification as vitamins under Heading 29.36. The item considered in that case was a preparation containing vitamins mixed with dilutants and, which was used as an additive to the main feed for livestock. We find that the Tribunal s decision was upheld by the Supreme Court in Collector v. Tetragon Chemie P. Ltd. 2001 (7) TMI 127 - SUPREME COURT . It thus appears that the appellate Commissioner s order impugned in the present appeal is supported by the Apex Court s decision in the cases of Ranbaxy Laboratories (supra) and Tetragon Chemie (supra). In the result, the Revenue s appeal gets dismissed.

Summary

Issues: Classification of imported goods under Customs Tariff Heading (CTH) 29.36 and 23.09

Classification under CTH 29.36:
The case involved the classification of imported goods declared as 'Vitamin-E 50% Adsorbate' under CTH 29.36 by the Customs authorities, attracting a basic Customs duty of 35% and Countervailing Duty (CVD) at 16%. The Chemical Examiner's report indicated that the goods contained Vitamin-E and silica, with silica acting as a filler. The Customs authorities believed that the goods fell under CTH 29.36. The importer contested this classification, arguing that the goods were a preparation for animal feed under CTH 23.09 and not a well-defined chemical under Chapter 29. The adjudicating authority upheld the classification under CTH 29.36, relying on various sources like Hawley's Condensed Chemical Dictionary and HSN Explanatory Notes.

Appeal and Classification under CTH 23.09:
The appellate Commissioner of Customs (Appeals) set aside the lower authority's decision and classified the goods under CTH 23.09 and SH 2309.90, considering the end-use of the goods as additives in animal feeds. The Department appealed this decision, leading to the present case before the Appellate Tribunal CESTAT, Chennai.

Analysis and Decision:
After examining the records, the Tribunal focused on the key issue of classifying the imported goods. The Tribunal noted that the goods, containing Vitamin-E and silica as a carrier, were specifically intended for animal feed use and not for human consumption. The Tribunal considered arguments from both sides, with the SDR relying on Chapter Note 1(f) in Chapter 29 and HSN Explanatory Notes to support the classification under CTH 29.36. The Consultant, however, pointed out the end-use of the goods as confirmed by the Chemical Examiner's report, emphasizing that the goods were used as animal feed additives.

Legal Precedents and Decision:
The Tribunal reviewed legal precedents, including the Supreme Court's decision setting aside a previous Tribunal ruling and classifying similar preparations under Heading 23.02 instead of 29.36. The Tribunal also referenced a Larger Bench decision classifying animal feed supplements under Heading 23.02. Ultimately, the Tribunal upheld the appellate Commissioner's classification under CTH 23.09 and SH 2309.90, in line with the intended use of the goods as animal feed additives. The Tribunal dismissed the Revenue's appeal, aligning with the decisions in previous relevant cases.

Conclusion:
The Tribunal's detailed analysis and consideration of legal precedents led to the dismissal of the Revenue's appeal, affirming the classification of the imported goods under CTH 23.09 and SH 2309.90 as animal feed additives. The decision highlighted the importance of considering the end-use and intended purpose of goods in determining their classification under the Customs Tariff.