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TMI Blog2014 (10) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Protein Poultry Mash’ confirms the view. Added to that the appellants described the HPPM in the invoice documents as ‘Poultry feed supplement and cleared to DTA. The appellants who are fully aware of the new product and its usage and on their own given a specific name and description as HPPM as ‘poultry feed supplement’. Product HPPM is fully satisfies the description given under chapter note of heading 23 of CTA and chapter note of chapter 23 of CETA. Therefore, the product cannot be classifiable under Ch. 2301 of CETA, as a waste as claimed by the appellants. The product of a kind used in animal feeding cannot be covered under Ch. 2301 of CETA. By virtue of chapter note of chapter 23 of CETA read with Explanatory Note to sub-heading 2309 of HSN, we are of the considered view that the product HPPM is rightly classifiable under Ch. 2302 of CETA and Ch. 2309 of CTA. chapter heading 2301 includes the animal wastes such as meat and meat offals only other than bones and other materials. Whereas, as seen from the process, as explained by the appellants themselves before the lower authorities, it is very clear that the poultry wastes used by the appellants for preparation and manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was extended. (viii) The appellants filed these appeals to the extent of challenging the classification of HPPM under Heading No. 2302.00 of CETA and 2309.90 of CTA. 3. The Ld. Advocate on behalf of the appellants submits that 'High Protein Poultry Mash' (HPPM) is a waste product arising during the course of process of manufacture of 'Processed Frozen Whole Chicken Meat'. Thus, it is a residue and waste from the food industry (i.e. preparation of Processed Frozen Chicken Meat) and rightly classifiable under 2301.00 of CETA and not under 23.02 of CETA as 'preparation of a kind used in animal feeding'. Heading 23.01 of CETA corresponds to Ch. 23.01 to 23.08 of CTA and heading No. 23.02 of CETA corresponds to heading No. 23.09 of CTA. He further submits that as per the Environment Protection Act and the Manual of Solid Waste Management, it is mandatory to process the waste materials consisting of non-edible offals and animal tissue and organs etc., and to be disposed of by rendering. The process carried out by them for processing of poultry waste material is similar to the description provided under Chapter 23 of Explanatory Notes to HSN. Merely by carrying out, the process by steam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercially described, should be taken in to consideration. The appellants themselves cleared HPPM by describing as poultry feeder supplement. Therefore, it is rightly classifiable under 23.02 of CETA and 23.09 of CTA. HSN notes to Heading 23.01 covers 'Flours and meals, unfit for human consumption, obtained by processing either the whole animal (including poultry, marine mammals, fish or crustaceans, molasses or other aquatic invertebrates) or animal products (such as meat or meat offal) other than bones, horns, shells, etc. But, the product manufactured by the appellants contain poultry wastes like intestine, feathers, heads, legs, blood and other offals. Therefore, he submits that HPPM is not exclusively obtained from meat and meat offals and hence they are not covered under 2301 of HSN. He relied upon various case laws as under:- 1. Sonam International 2012 (275) ELT 326 (All.) 2. Tetragon Chemie (P) Ltd. Vs. Collector of CE. 2001 (138) ELT 414 (Tri.-LB) 3. CC, Mumbai Vs. Piramal Healthcare Ltd. 2004 (178) ELT 487 (Tri.-Mum.) 5. We have carefully gone through the various submissions made by both the sides and also examined the records and written submission filed by them. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PPM to DTA units by describing the product in their invoices as 'Poultry feed supplement'. 5.3 The Ld. Advocate for the appellants mainly relied on the HSN Explanatory Notes to Heading 2301 and 2309. He argued that the processes are covered under the HSN explanatory notes as a waste. The relevant portion of the Tariff description of CETA, CTA and HSN and exemption notification are reproduced below:- a) Chapter 23 of CETA, 1985 RESIDUES AND WASTES FROM THE FOOD INDUSTRIES PREPARED ANIMAL FODDER Heading No. 23.02 includes products of a kind used in animal feeding elsewhere specified or included, obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristic of the original material, other than vegetable waste, vegetable residues and by product of such processing. Heading No. Sub-heading No. Description of goods 23.01 2301.00 Residues and waste from food industries, including bagasse, other waste of sugar manufacture and oil cakes 23.02 2302.00 Preparations of a kind used in animal feeding, including dog and cat food b) Chapter 23 of CTA, 1975 as under:- Notes: Heading 2309 includes products of a kind used in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for other purposes (e.g. as fertilizers). 6. We find that Chapter 23 covers the various residues and wastes from food industries also includes prepared animal fodder, certain products of animal origin. The main use of most of these products is used as animal feeding either alone or mixed with other materials, although some of them are fit for human consumption. The head Notes of Chapter 23 of CETA, CTA and HSN are similarly worded. The scope of Chapter 23 as stated in HSN is that it covers various residues and wastes derived from vegetable materials used by food-preparing industries, and certain products of animal origin. The main use of most of these products is as animal feeding stuffs, either alone or mixed other, Chapter 23 of CETA is comprising of only two headings. Heading No. 23.01 covers the residues and wastes arises during the process of manufacture of final product from food industry. The clearance of residues and wastes above would be Nil rate of duty under heading No. 23.01. The other heading No.23.02 covers preparation of a kind used in animal feeding. There is no dispute that heading 23.02 of CETA corresponds to heading No. 23.09 of CTA. Notes of Chapter 23 provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading is not only covers preparation of a kind used in animal feeding but also includes products directly obtained from vegetable or animal or without addition of any nutrients. Therefore, the appellants contention that the product to be classifiable under 2309 of CTA or 2302 of CETH should be only of a preparation containing added nutrients, is not acceptable and not justified. On perusal of the HSN explanatory note of heading No. 2309, which is further grouped into three categories as complete food, food supplement and a preparation for used in making supplementary food. 9. The word 'products' used in chapter note of chapter 23 and the sub-heading and 'preparations' used in the chapter 23.09 is extensively dealt by the Hon'ble Tribunal in the case of Tetragon Chemie Pvt. Ltd. Vs. Collector of C.Ex., Bangalore - 2001 (138) ELT 414 (Tri.-LB), which is relied upon by both the sides is reproduced as under:- 76. For understanding the implications of the use of the word 'products' in note under Chapter 23 of CETA 1985 and the use of the word 'preparations' under Heading 23.02, let us examine these two words, and then find out the implication of the word 'includes'. 77. We note t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, and expressions should be construed in the sense in which they are understood in the trade by the dealer and consumer. The reason is that it is they who are concerned with it and it is the sense in which they understand it which constitutes the definitive index of legislative intention. From the above Larger Benchs decision, it is evident that chapter note (1) of heading 23 speaks of a product and does not speak of preparations. The HPPM is product produced or prepared from animal waste which is cleared as poultry feed supplement. 10. Sub Heading 2301.00 of CETA covers all residues and waste from food industries which includes bagasse and other waste of sugar manufacture and oil cakes. From the very nature of the description provided under sub-heading 2301.00 of CETA, it is abundantly clear that the goods classifiable under this heading are only residues and wastes arising from food industries. Whereas heading 2302.00 of CETA covers preparations of a kind used in animal feeding including Dog & Cat food. In the instant case, it is evident that the product cleared by the appellant is neither a Residue nor a waste from food industry. As seen from the series of process as explain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heads, legs contains bones and other materials. It cannot be called as only meat and meat offals, as claimed by the appellants. Therefore, the product HPPM cannot be classifiable under chapter 2301 of CETA. The Ld. Advocates contention that the department bringing new grounds is not acceptable as it is the evidence on record, the process explained by the appellants, which is clearly brought out in the show cause notice and also discussed in the order-in-original, and it has been admitted in their own letter while explaining the process of waste material. 12. Further, we find that from the fact that the appellants cleared the goods described as HPPM 'Poultry Feed Supplement' and the product is commercially known as HPPM, which has been understood in the trade as poultry feed supplement. In this regard, we rely upon the Honble Supreme Court's judgment in the case of Plasmac Machine Mfg. Co. Pvt. Ltd. Vs. Collector of Central Excise 1991 (51)ELT 161 (S.C.), the relevant paragraph is reproduced as under:- 13.The submission that `nuts' in Entry 52 are to be? understood in the commercial sense is not disputed by the department. It is an accepted principle of classification that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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