1998 (9) TMI 390 - AT - Customs

Summary

Issues Involved:
1. Classification of preparations used in animal feeding under Heading 29.36 or Heading 23.02 of CETA 1985.
2. Whether Niger Seed Extractions and Rice Bran Extractions are classifiable as animal feeds for export duty purposes.

Summary:

1. Classification of Preparations Used in Animal Feeding:

Issue: Whether preparations used in animal feeding consisting of vitamins mixed with diluents, etc., are classifiable under Heading 29.36 or Heading 23.02 of CETA 1985.

Arguments and Evidence:
- The Tribunal noted that the two competing entries for classification are Heading 23.02 and Heading 29.36 of CETA 1985.
- Heading 23.02 includes products of a kind used in animal feeding, obtained by processing vegetable or animal materials.
- Heading 29.36 covers vitamins, provitamins, and their derivatives, used primarily as vitamins.
- Technical literature and expert opinions indicate that animal feed includes not only essential rations but also supplements like proteins, minerals, and vitamins.
- The Tribunal examined various definitions, technical literature, and case law, including judgments from the Hon'ble Gujarat High Court and the Hon'ble Bombay High Court, which supported the classification of such preparations as animal feed.
- The Tribunal also considered the CBEC Circular No. 188/22/96-CX, which clarified that preparations containing active substances like vitamins, amino acids, antibiotics, etc., along with carriers, fall under Heading 23.02 if they are used in animal feeding.

Findings:
- The Tribunal concluded that preparations containing vitamins, minerals, proteins, and other nutrients, used as animal feed supplements, are classifiable under Heading 23.02 of CETA 1985.
- The word "includes" in Chapter Note 1 of Chapter 23 extends the scope of Heading 23.02 to cover preparations used in animal feeding, not limited to those obtained by processing vegetable or animal materials.
- The Tribunal rejected the Revenue's argument that these preparations should be classified under Heading 29.36, as they are not used primarily as vitamins.

2. Classification of Niger Seed Extractions and Rice Bran Extractions:

Issue: Whether Niger Seed Extractions and Rice Bran Extractions are classifiable as animal feeds for purposes of levy of export duty under Entry 21 of the Second Schedule (Export Tariff).

Arguments and Evidence:
- The Assessees claimed that these items are not animal feeds but ingredients of animal feeds.
- The Revenue argued that they are used as animal feeds and should be classified as such.
- The Tribunal examined technical literature and judicial pronouncements, including the Hon'ble Gujarat High Court and Hon'ble Bombay High Court judgments, which supported the classification of such items as animal feeds.

Findings:
- The Tribunal held that Niger Seed Extractions and Rice Bran Extractions are correctly classifiable as animal feeds under Heading 21 of the Second Schedule (Export Tariff).
- The Tribunal relied on technical literature and judicial precedents to conclude that these items are considered animal feeds in common trade parlance.

Conclusion:
The Tribunal ruled that preparations used in animal feeding containing vitamins, minerals, proteins, etc., are classifiable under Heading 23.02 of CETA 1985. Additionally, Niger Seed Extractions and Rice Bran Extractions are classified as animal feeds for export duty purposes under Heading 21 of the Second Schedule (Export Tariff).