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of <h1>Classification of High Protein Poultry Mash (HPPM) under Tariff Acts upheld, exemption denied</h1> <h3>M/s. Supreme Suguna Foods Co. Ltd. Versus CCE, Coimbatore </h3> M/s. Supreme Suguna Foods Co. Ltd. Versus CCE, Coimbatore - 2015 (316) E.L.T. 341 (Tri. - Chennai) Issues Involved:1. Classification of High Protein Poultry Mash (HPPM) under the Central Excise Tariff Act (CETA).2. Applicability of Notification No. 23/2003-CE dated 31.03.2003.3. Determination of whether HPPM is a waste product or a preparation used in animal feeding.Detailed Analysis:1. Classification of High Protein Poultry Mash (HPPM) under the Central Excise Tariff Act (CETA):The appellants, a 100% Export Oriented Unit (EOU), manufacture Processed Frozen Whole Chicken Meat and by-products like HPPM. The appellants classified HPPM under Heading No. 23.01 of CETA, claiming it as a waste product. However, the Revenue classified it under Heading No. 23.02 of CETA and Heading 2309 of the Customs Tariff Act (CTA), as a preparation used in animal feeding. The adjudicating authority confirmed the classification under Heading No. 2302.00 of CETA. The appellants argued that HPPM, derived from waste materials like intestines, feathers, and blood, should be classified as waste under Heading No. 23.01. The Revenue countered that the process altered the waste materials into a new product, HPPM, which is commercially known as a poultry feed supplement and should be classified under Heading No. 23.02 of CETA.2. Applicability of Notification No. 23/2003-CE dated 31.03.2003:The appellants claimed exemption from duty under Notification No. 23/2003-CE, which applies to waste from food industries. This exemption was claimed under Sl. No. 21 of the notification, which provides a NIL rate of duty for waste from food industries. The Revenue argued that since HPPM is a new product and not merely a waste, it does not qualify for this exemption. The Tribunal, after examining the process and nature of HPPM, concluded that it does not fall under the category of waste as intended by the notification.3. Determination of whether HPPM is a waste product or a preparation used in animal feeding:The Tribunal analyzed the process involved in the manufacture of HPPM, which includes cooking waste materials at high temperatures and converting them into a powder form. The appellants described HPPM in their invoices as a poultry feed supplement, indicating its use in animal feeding. The Tribunal referred to the Harmonized System of Nomenclature (HSN) Explanatory Notes and relevant case laws to determine the classification. It was noted that products under Heading No. 23.02 of CETA include those obtained by processing animal materials to the extent that they lose their original characteristics. The Tribunal concluded that HPPM, being a distinct product used in animal feeding, fits this description and should be classified under Heading No. 23.02 of CETA and Heading 2309 of CTA.Conclusion:The Tribunal upheld the classification of HPPM under Heading No. 23.02 of CETA and Heading 2309 of CTA, rejecting the appellants' claim for classification under Heading No. 23.01 of CETA. Consequently, the appellants' claim for exemption under Notification No. 23/2003-CE was also rejected. The appeals were dismissed, and the impugned orders were upheld.
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