Appellate Authority Upholds GST Classification for "Poultry Meal"

The Appellate Authority upheld the classification of "poultry meal" under Tariff Item No. 2301 10 10 of the Customs Tariff Act, 1975, as "Meat meals and pellets," attracting a GST rate of 5%. The authority ruled that "poultry meal" did not qualify for exemption under Entry 102 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, as it did not meet the specific goods description outlined in the exemption entry. The appellant's claims regarding classification as "concentrates" and reliance on past judgments were dismissed, resulting in the dismissal of the appeal.

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Issues involved:

1. Classification of the product "poultry meal."
2. Eligibility for exemption under entry SI.No. 102 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017.

Issue 1: Classification of the product "poultry meal."

The appellant, M/s. Sushi Pet Nutri Science, challenged the classification of their product "poultry meal" as determined by the Telangana State Authority for Advance Ruling (AAR). The AAR classified "poultry meal" under Tariff Item No. 2301 10 90 of the Customs Tariff Act, 1975, attracting a GST rate of 5%. The appellant contended that "poultry meal" should be classified under Tariff Item No. 2309 90 20 as "Concentrates for compound animal feed," which would make it exempt from GST under Entry 102 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017.

The Appellate Authority examined the relevant entries under Heading 2301 and 2309 of the Customs Tariff, the manufacturing process, and the usage of "poultry meal." The authority found that the manufacturing process described by the appellant was similar to the process described in the HSN explanatory notes under Heading 2301. The authority concluded that "poultry meal" meets the description of goods falling under Tariff Item 2301 covering "meals of meat or meat offal." The authority also noted that "poultry meal" is not marketed or sold for direct animal feeding but is supplied to manufacturers of animal feed/aqua feed.

The authority rejected the appellant's claim that "poultry meal" should be classified as "concentrates" under Heading 2309, as the appellant failed to provide sufficient evidence to support this classification. The authority also noted that the essential characteristics of the original material (chicken wastages) are not lost during the manufacturing process, which is a requirement for classification under Heading 2309.

The authority also considered the appellant's reliance on the Hon'ble Tribunal decision in the case of Supreme Suguna Foods Co. Pvt. Ltd. vs CCE, Coimbatore 2015 (316) E.L.T. 341 (Tri. - Chennai). The authority found that the relevant Central Excise Tariff entries under consideration in that case were different from the entries in the subject appeal, making the case distinguishable.

Based on the above findings, the authority concluded that the appropriate classification for "poultry meal" is under Tariff Item No. 2301 10 10 as "Meat meals and pellets."

Issue 2: Eligibility for exemption under entry SI.No. 102 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017.

The appellant claimed exemption for "poultry meal" under Entry 102 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017, which covers "Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake."

The authority noted that while "poultry meal" falls under Heading 2301 of the Customs Tariff, it does not figure in the list of goods specified by description in Column (3) of Entry 102. Therefore, "poultry meal" is not eligible for the exemption.

The authority also rejected the appellant's claim that "poultry meal" should be classified as "concentrates," which is included in the exemption entry. The authority reiterated its earlier findings that "poultry meal" does not qualify as "concentrates."

The authority addressed the appellant's contention regarding the reliance on the Hon'ble Supreme Court judgment in the case of Dilip Kumar & Company and the TRU Circular dated 31.12.2018. The authority noted that these contentions do not have any bearing on the issue of eligibility for exemption.

Order:

1. The product "poultry meal" manufactured and supplied by the appellant falls under Tariff Item No. 2301 10 10 of the Customs Tariff Act, 1975. The impugned order is modified accordingly.
2. The product "poultry meal" manufactured and supplied by the appellant is not eligible for the exemption contained in entry SI.No.102 of Notification No.2/2017-Central Tax (Rate) dated 28.06.2017 (as amended).

The subject appeal is disposed of accordingly.

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