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TMI Blog2022 (7) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... pared by addition, mixing or such other similar process to the original commodity in order to derive a new commodity. From the above, it is clear that the products under consideration are preparations, also known as premixes. It is observed that heading 2309 is an end-use-based heading. In this regard, reliance may be placed on the decision of Hon ble in the case of TETRAGON CHEMIE (P) LTD. VERSUS COLLECTOR OF C. EX., BANGALORE [ 1998 (9) TMI 390 - CEGAT, NEW DELHI] , wherein it was held that end-use assumes importance in determining the classification of goods under heading 2302 of CETA, 1985. The same is because the description of the goods under heading 2302 reads as Preparations of a kind used for animal feeding including cat and dog food . The heading specifically states that the preparations must be used for animal feeding. Therefore, heading 2302 is an end-use-based heading. It must be noted that heading 2302 of CETA, 1985 is akin to Heading 2309 of the Customs Tariff Act, 1975. As per the HSN explanatory note, the heading 2309 excludes protein substances of Chapter 35. However, the impugned products contain these protein substances, i.e. enzymes in very small quantities. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the preparation of animal feeds. These products containing enzymes are used to enhance nutrient digestibility and help in enhancing the nutritive value of the animal feed. The products are used by mixing them directly into the animal feed, in the proportion as prescribed. The products in question are not subject to further processing post importation into India. The applicant states that the products which have been imported by the applicants are exclusively for use for animals and have no other use, either as medicine or for the manufacture of medicine. 2.1 In regards to classification, the applicant submits that the global desk of the M/s BASF classifies these products as enzymes under heading 3507 of HSN, which is different from the practice followed by the domestic industry. As per the applicant's understanding, the said goods, on account of the fact that the products in question are used for a very specific purpose, i.e. preparation of animal feed, merit classification under heading 2309 of the Customs Tariff Act, 1975. In support of the above, they have submitted Circular No. 80/54/2018-GST dated 31.12.2018 issued by the Ministry of Finance, Department of Revenue (Tax Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orwarded to the jurisdictional commissioners of customs for comments. However, no reply has been received, though reminders have also been sent. 4. The application along with the other 4 applications of the applicant was listed on 01.06.2022 for a hearing. Sh. T. Vishwanathan and others appeared on behalf of the applicant. No one appeared on behalf of the commissioner of customs. Sh. Viswanathan explained the technical/safety data sheet, manufacturing process, composition certificate, and product labels of each item for which advance ruling has been sought. The applicant also submitted a compilation containing, inter-alia, notifications/circulars, cross-rulings, case laws, etc. My attention was specifically drawn to the decisions of the Hon'ble Tribunal in the case of Lalchand Bhimraj & Tetragon Chemie and the CBEC circular of 26.03.1996. Sh. Vishwanathan gave assurance to submit detailed composition of products along with their manufacturing flow chart. 4.1. The applicant additionally submitted an excel sheet containing the end use of the product and its inactive ingredients. Table 2 Product name Whether the product contains additives (Yes/No) Active Ingredients Inactiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced by Aspergillus niger Other substances: Vegetable Oil Carrier: Middlings, Magnesium Suplhate Carriar material & improves the stability of the product. Endo-1,4-beta-xylanase (28,000 TXU) and endo-1,4- glucanase (12,500 TGU/g), recommended for nonpelleted or pelleting up to 85 °C of poultry, swine & fish feed. It suited to counteract the anti- nutritional effects from pentosans and beta- glucans that constitute the major part of NSPs in commonly used feedstuffs. Natugrain TS L Yes Endo-1,4-Betaxylanase (EC 3.2.1.8), produced by Aspergillus niger Endo- 1,4-Betaglucanase (EC 3.2.1.4), produced by Aspergillus niger Sorbitol, Glycerol, Sodium benzoate Carriar material & improves the stability of the product. Endo-1,4-beta-xylanase (5,600 TXU/g) and endo- 1,4-betaglucanase (2,500 TGU/g), recommended for post-pelleting applications of poultry, swine & fish feed. It suited to counteract the antinutritional effects from pentosans and beta- glucans that constitute the major part of NSPs in commonly used feed- stuffs. Natugrain TS DL Yes Endo-1, 4-beta -xyalnase concentrate , Endo-1, 4-beta -glucanase concentrate Sorbitol, Glycerol, Sodium benzoate Carrier material & im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 6-phy tase (17500 FTU/g), recommended for non-pelleted or pelleting up to 95 °C of poultry, swine & fish feed. The efficient phosphorus, energy and amino acid release provides tangible benefits. Natuphos E 50000 Yes 6 - Phytase Bran, Mg - sulphate, Vegetable Oil Carrier material & improves the stability of the product. Hybrid 6-phytase (50.000 FTU/g), recommended for non-pelleted or pelleting up to 80°C of poultry, swine & fish feed. The efficient phosphorus, energy and amino acid release provides tangible benefits. Natuphos E 5000 Combi L Yes Myo-inositol-hexakisphosphate beta-phosphohydrolase (EC 3.1.3.26), produced by Aspergillus niger Endo-1,4-betaxylanase (EC 3.2.1.8), produced by Aspergillus niger Endo-1,4-betaglucanase (EC 3.2.1.4), produced by Aspergillus niger Carrier: Glycerol Preservative: Sodium Benzoate, Water Carrier material & improves the stability of the product. Hybrid 6-phytase (5,000 FTU/g), endo-1,4-beta- xylanase (5,600 TXU/g), and endo-1,4-betaglucanase (2,500 TGU/g), recommended for post- pelleting applications of poultry, swine & fish feed. The efficient phosphorus, energy and amino acid release provides tangible benefits & breakdown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Enzymes; prepared enzymes not elsewhere specified or included Note to Chapter 23 states that "Heading 2309 includes products of a kind used in animal feeding, not elsewhere specified or included, obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristics of the original material, other than vegetable waste, vegetable residues and by-products of such processing". This chapter note is inclusive in nature and it is clear that the heading covers other items and also includes products obtained by processing vegetable or animal material, not elsewhere specified or included. This view is supported by the Tetragon Chemie (P) Ltd. vs. Collector of C. Ex., Bangalore, wherein it was held that there is no limiting factor in the said chapter note so as to restrict its meaning. 5.2 The HSN explanatory notes to the heading 2309 covers sweetened forage and prepared animal feeding stuff consisting of a mixture of several nutrients designed : (1) to provide the animal with a rational and balanced daily diet (complete feed); (2) to achieve a suitable daily diet by supplementing the basic farm-produced feed with organic or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additives required for preservation and transport is a premix, which is added to the complete animal feed or supplementary animal feed. The Hon'ble Tribunal in Reckitt and Colman of India Ltd. vs. CCE - 1985 (22) ELT 216 (Tribunal) has held that to qualms as a preparation the said product should be prepared by addition, mixing or such other similar process to the original commodity in order to derive a new commodity. From the above, it is clear that the products under consideration are preparations, also known as premixes. 5.3 For the identity of the products, the applicant has declared in their application that they are for animal use. The applicant in their submissions has categorically mentioned that the impugned products are exclusively used in animal feed and have no other use; that the impugned products contain active ingredient preparations; and that the impugned products are commonly known in the trade as products for specific use in animal feeding i.e. to manufacture animal feed. In support of the above, they have submitted the following documents: A. A certificate issued by the German Government's certifying agency certifies that these products are feed supplem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the classification of the products claimed to be animal feed supplements, it is necessary to ensure that the said animal feed supplements are ordinarily or commonly known in the trade as products for specific use in animal feeding. 5.3.2 Similar clarification was issued vis Board Circular No. 80/54/2018-GST dated 31.12.2018. The relevant paras are reproduced below: "5.2 As per the HSN, 2309 inter-alia covers reading vita s and provitamins which improve digestion and, more generally, ensure that the animal makes good use of the feeds and safeguards its health. On the other hand, HS code 2936 coves vitamins and provitamins which are medicinal in nature and have a much higher concentration of an active substance. . . 5.5 ... Thus, HS code 2309 would cover only such products, which in the form supplied, are capable of specific use as food supplements for animals and not capable of any general use. …" 5.3.3 It is observed that heading 2309 is an end-use-based heading. In this regard, reliance may be placed on the decision of Hon'ble in the case of Tetragon Chemie (P) Ltd vs. Commissioner of Central Excise, Bangalore 2001 (138) E.L.T. 414, wherein it was held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s protein substances of Chapter 35. However, the impugned products contain these protein substances, i.e. enzymes in very small quantities. They can't be considered as protein only product, rather they are products containing enzymes among other substances like stabilisers, solvents, preservatives and carriers. Therefore, the impugned goods do not appear to be hit by the above-mentioned exclusion clause. 5.3.5 The applicant has submitted that the impugned products are commonly known in the trade as products for specific use in animal feeding i.e. to manufacture animal feed. The safety data sheet provided by the manufacturer mentions the use of these products as feed additives. The manufacturer on their global website https://www.basf.com/global/en.html has categorised these products as feed ingredients under animal nutrition products. A certificate issued by the German Government's certifying agency rated these products as feed supplements of animal grade. Further, test reports issued by Doctors Analytical Laboratories Pvt. Ltd. specify that the impugned products are compound preparations for use in animal feed. Therefore, on the basis of trade parlance and the opinion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of bacterial a-amylases or proteases. This heading excludes, inter alia, the following preparations: (a) Medicaments (heading 30.03 or 30.04). (b) Enzymatic preparations for pre-tanning (heading 32.02). (c) Enzymatic soaking or washing preparations and other products of Chapter 34. The following are the most important among the enzymes found in trade:... ... (6) Amylases and proteases obtained from micro-organisms. Certain micro-organisms, when grown in appropriate culture media, secrete a considerable quantity of amylases and proteases. After removal of the cells and other impurities, the solutions are either concentrated by low temperature vacuum evaporation or the enzymes are precipitated by the addition of inorganic salts (e.g., sodium sulphate) or organic, water- miscible solvents (e.g., acetone). Examples of microbial amylases and proteases are: ...(b) Fungal amylases: Fungal amylases are essentially a-amylases derived from mould cultures, mainly of the genus Rhizopus or the genus Aspergillus. Although their liquefying power is marked, it is much less than that of bacterial amylases. Fungal amylases have many uses in the food industry. It should be note ..... X X X X Extracts X X X X X X X X Extracts X X X X
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