Animal feed exemption extends to necessary supplements, and refund limitation does not apply to provisional assessments

Di-calcium phosphate of animal feed grade was treated as falling within the expression "animal feed" under Notification No. 55/75-CE because animal feed was understood in a broad natural and technical sense to include necessary constituents, concentrates and feed supplements; the later specific reference to animal feed supplements was regarded as clarificatory rather than expanding the exemption. The refund claim was also held not to be barred by limitation under Rule 11, as the assessments for the relevant period were provisional and later finalised. On that footing, the Revenue's challenge failed and the exemption and refund were upheld.

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Issues: (i) Whether di-calcium phosphate of animal feed grade was covered by the expression "animal feed" in Notification No. 55/75-CE dated 01.03.1975; (ii) Whether the refund claim was barred by limitation under Rule 11 of the Central Excise Rules, 1944.

Issue (i): Whether di-calcium phosphate of animal feed grade was covered by the expression "animal feed" in Notification No. 55/75-CE dated 01.03.1975.

Analysis: The product was used only as a constituent mixed in small quantities in the total animal feed, but the technical material showed that animal feed consists of several constituents, including concentrates and feed supplements. The earlier judicial understanding of "feed" was applied in a broad, natural and technical sense, and additives or supplements necessary for animal nutrition were treated as part of animal feed. The later specific inclusion of animal feed supplements in the notification was treated as clarificatory and not as creating a new exemption.

Conclusion: Di-calcium phosphate of animal feed grade was held to fall within "animal feed" under Notification No. 55/75-CE, in favour of the assessee.

Issue (ii): Whether the refund claim was barred by limitation under Rule 11 of the Central Excise Rules, 1944.

Analysis: The assessments for the relevant period were accepted as provisional, and the record showed that they were later finalised. On that footing, the refund claim could not be treated as time-barred under the limitation rule invoked by the Revenue.

Conclusion: The refund claim was not barred by limitation, in favour of the assessee.

Final Conclusion: The Revenue's appeal failed because the goods were entitled to exemption and the refund claim was within time on the footing of provisional assessment.

Ratio Decidendi: Where a product is a nutritionally necessary constituent or supplement forming part of animal feed, a broadly worded exemption for animal feed can extend to it, and a later clarificatory amendment does not cut down the earlier scope; a refund claim following provisional assessment is not defeated by limitation in the same manner as a final assessment claim.

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