TaxTMI 
TaxTMI 
1998 (9) TMI 390
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.... fact that the Tribunal in the case of M/s. Roche Products Limited; in the case of M/s. Glaxo Labs (I) Limited; in the case of M/s. Punjab Bone Mills and in the case of M/s. Protin Kem had held that the goods were classifiable under Heading 23.02 of Central Excise Tariff Act, 1985 (CETA 1985) and that in the case of M/s. Ranbaxy Laboratories Ltd., the Tribunal had held that the goods were classifiable under Heading 29.36 of CETA 1985. Therefore, a reference was made to the third Member who held that the matter may be referred to the Larger Bench. Accordingly, the issue was formulated as "Whether preparations of a kind used in animal feeding consisting of one or more vitamins mixed with diluents etc. are classifiable under Heading 29.36 as held in the case of M/s. Ranbaxy Laboratories Limited or under Heading 23.02 as held in the case of M/s. Glaxo Labs (I) Limited and M/s. Roche Products Limited." 2. At the outset, the Joint Chief Departmental Representative, Shri B.K.Gupta pointed out that the issue involved in all these matters was decided by the Tribunal in favour of the Revenue in the case of M/s. Ranbaxy Laboratories Limited v. C.C.E. [1994 (72) E.L.T. 197 (T)]; that a....
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....or not containing impurities; (b) Mixtures of two or more isomers of the same organic compounds (whether or not containing impurities), except mixtures of acylic hydrocarbon isomers (other than stereoisomers), whether or not saturated (Chapter 27); (c) The products of heading Nos. 29.36 to 29.39 or the sugar ethers and sugar esters and their salts of heading No. 29.40, or the products of heading No. 29.41, whether or not chemically defined; (d) The products mentioned in (a), (b) or (c) above dissolved in water; (e) The products mentioned in (a), (b) or (c) above dissolved in other solvents, provided that the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport and that the solvent does not render the product particularly suitable for specific use rather than for general use; (f) The products mentioned in (a), (b), (c), (d) or (e) above with an added stabiliser necessary for their preserv....
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..... ..... XI. PROVITAMINS, VITAMINS AND HARMONES. 29.36 2936.00 Provitamins and vitamins, natural or reproduced by synthesis (including natural concentrates), derivatives thereof used primarily as vitamins, and inter-mixtures of the foregoing, whether or not in any solvent. 20% .... 6. The products in dispute in the case of various Appellants covered in these Appeals are as under : PRODUCTS IN DISPUTE OF THE ASSESSEES COVERED IN THE CAPTIONED APPEALS. PRODUCT ACTIVE INGREDIENT OTHER INGREDIENTS (1) M/s. Tetragon Chemie    (P) Ltd. Synocare-100 VIT B12 Calcium Carbonate (Mineral) Sodium Benzone Kaysol Forte VIT K3 Dextrose, Lactose (Carbohydrate) B-Care-Plus VIT B1 Yeast (Protein) VIT B3 Calcium Carbonate (Mineral) Sod. Benzoate VIT B5 Santoquin VIT B6 Soyaflour (Protein) VIT B12 VIT E Folic Acid Solvit Adbec VIT A Dextrose (carbohydrate) VIT D3 Lactose (") &n....
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....e Dl-methionine 10. M/s. Mepro Chemicals Floxaid-N Choline Bitartrate D-calcium Pentothenate Hiacin 11. M/s. Godrej Soaps (P) Ltd. Niger Seed Extractions. Rice Bran Extractions 12. M/s Western Hatcheries Ventrimix DS D.O. Soya, Liquid Parafin, Endox D. Dry powder, Vit. AD3, Vit. D2, Vit. K. Ventribee-Plus Deoiled Groundnut cake, Cal. Carbonate (H), Endox D. Dry Powder, Lactose, Cal. D., Panthothenate, Tocopheryle, Acetate, Folic Acid, Niacinainide, Vit. B12, Vit. B6, HCl, Vit. BI, HCl. Ventrimix Forte D. O. Soya, Vit. A, Vit. B2, Vit. D3, Vit. K. Ventrimin-17 Choline, Chloride, Cobalt Sulphate, Copper Sulphate, Pot, Iodide, Ferrous Sulphate, Manganese Sulphate, Zinc Oxide, DCP, Cal. Carbonate (L), Cal. Carbonate(H), Lactose Cal. Pantethenate, Hiacinamide, Vit. E, Vit. K3, Vit. B2, Vit. B12, Vit. D3, Vit. A. Biosafe Calcium Carbonate (I), Calcium Carbonate (H), Lactose, Lactobaccilus Spores, Vit. B12. Stresvel DM Water, Sorbitol, Propyoene-Glycol, Sod. Hydroxide, Propyl Gallate, Tween-80, Vit. C, Vit. E., Vit. D3, Vit. A. Ventriplex - M DN Water, Amarna....
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....e acquired a precise meaning in the field of livestock and so also the word 'concentrates'. In the Book entitled 'Nutritive Values of Indian Cattle Feeds and the Feeding of Animals' by Shri K.C. Sen, which has been published by the Indian Council of Agricultural Research, New Delhi, Chapter - I entitled 'Nutrition of Animals' deals with the feeding stuffs of animals. It is there pointed out that food is essential for the maintenance of life. The nutrients in a feeding stuff enable the animal body to maintain energy, to perform the vital processes of life and provide the material to replace the essential tissues breakdown which occurs in the body continuously. Food also provides the constituents and the energy required for body growth. All feeding stuffs are composed of water and organic and mineral matter. Organic matter is composed of proteins, fats, crude fibre and soluble carbo-hydrates. Besides the above, there are substances known as vitamins which are considered to be essential for the proper nutrition of farm-stock. Of these, the more important ones from the point of view of cattle nutrition, are Vitamins A & D because they have to be supplied to the animals through their fe....
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....each other, and in an available form to promote maximum rate of growth, optimum egg production and reproduction with maximum efficiency of feed utilisation. The book also brings out that animals such as the chicken eat food primarily to satisfy an inner craving or hunger for energy. When this hunger is satisfied, the animal stops eating. Therefore, the amino acids, vitamins and minerals must be present in the diet in a very definite ratio to energy so that the animal will receive enough of all essential nutrients in satisfying its hunger for energy. The book also illustrates that Amino Acids and Vitamins are essential nutrients. 12. Animal Feed has been commented upon in the Encyclopedia Brittanica, Volume 9, Page No. 144 as 'Feeds Animal' are material on which animals are fed differ widely in chemical composition and nutritive value. For convenience they are divided into two general classes : Concentrates and Roughages. Concentrates include a large variety of feeds that have a high value because they are rich in easily digested nutrients, such as starch, fat and protein and are low in fibre or woody material which is not well digested. Roughages have a much lower value bec....
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....aller concentration, consists of Vitamins. At Page 458, under the heading 'Feed Supplements' it has been observed that the manufacture of commercial mixed feeds has become a very important industry in the United States. Prior to 1949, the principal feed additives used in these mixed feeds were minerals and protein concentrates. Since that date, there has been enormous expansion in large scale manufacture of vitamins, antibiotics, hormones and essential aminoacids. These substances have been added to mixed feeds as supplements having either direct action or metabolism and growth or indirect action through control of bacterial growth and infection. Although an ample supply of all vitamin requirements of livestock usually can be made up through the use of common feeds, vitamins are becoming more general as feed additives in commercial feeds. Various kinds of vitamins are added to commercially mixed feeds for poultry, swine and, to a limited extent, for calves. Increasing amounts of fat soluble vitamin A are being produced for all types of livestock. This vitamin, which formerly was supplied as a fish liver oil to be fed separately because of the rapid destruction of the vitamin on oxi....
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.... specific need usually used in micro quantities and requiring careful handling and mixing'. In the same Notification, the term animal feed concentrates means 'a feed intended to be diluted with other food ingredients to produce a 'complete feed optimum nutrition balance'. 20. S/Shri V. Lakshmikumaran, V.S. Nankani, J.S. Patel, P.C. Anand and R.G. Sheth, Advocates appeared for the Assessees whereas Shri B.K. Gupta, the ld. Joint Chief Departmental Representative appeared for the Revenue. 21. It was argued for M/s. Tetragon Chemie (P) Ltd., that since there is no appeal filed by the Department on the issue of limitation, arguments are being adduced only on classification of the products manufactured by the Appellants. 22. It was contended by the ld. Counsels for the Assessees that 'animal feed' has not been defined in the Tariff or the rules made thereunder. Therefore, reliance has to be placed on the technical literature on the subject and general understanding of the trade who deal in the goods or who purchase the goods, in addition to the case law on the subject. It was contended that affidavits from experts and their opinions were produced before the lower....
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....rved that the Hon'ble Gujarat High Court was required to consider whether certain vitamin products which were used for supplementing the feed for cattle and poultry should be classified as cattle feed in terms of the meaning of entry 21 of Schedule 1 of Gujarat Sales Tax Act, 1969 or as entry No. 22 of Schedule 1 of the said Act. The Hon'ble Gujarat High Court had held that the term cattle and poultry feed must include not only that food which is supplied to domestic animals or birds as an essential ration for the maintenance of life, but also that feed which is supplied over and above the maintenance requirements for growth or fattening and for production purposes. 24. The ld. Jt. CDR, countering the arguments based on the Hon'ble Gujarat High Court and Hon'ble Bombay High Court judgments submitted that these two judgments pertain to Sales Tax matters. It was contended by him that the Sales Tax Act is not the same as the Central Excise Act. The two Acts serve two different purposes and hence the finding under one Act cannot be taken directly as covering the matter precisely under a different Act. He submitted, therefore, that the ratio of the decision of these two judgment....
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....the basic farm-produced feed (Feed supplements) and (C) Preparations for use in making the complete feeds or supplementary feeds described in (A) and (B). It was contested by the counsels for the Assessees that their products are used as animal feed; that the tariff description stipulates the end use as a criterion for classification; that their labels show that the goods are used as animal feeding only; that the Department has not brought any evidence on record to show that the preparations are not used as animal feed supplements; that apart from tariff description, there was no other tariff definition in the tariff or rules; that the mere mixture of small quantity of vitamins does not by itself render the mixture of vitamin so as to bring it under Heading 29.36; that Experts/Specialists and Users/Dealers have certified that the goods in question are not vitamins, but only essential supplements required for animal feed; that these experts/specialists/ users/dealers categorically stated that if animal feed supplements contain vitamins in a small quantity, even then the product is known and used as animal feed supplements; that for the manufacture of animal feed supplements, no drug....
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..... Porrits & Spencer (Asia) Ltd. v. State of Haryana [1978 (42) STC 433 = 1983 E.L.T. 1607 (S.C.)]. It is generally by its functional character that a product is so identified. In Commissioner of Sales Tax, U.P. v. Macneill & Barry Ltd., Kanpur [1985 (2) SCALE 1093 = 1986 (23) E.L.T. 5 (S.C.)], this Court expressed the view that ammonia paper and ferro paper, used for obtaining prints and sketches of site plans could not be described as paper as that word was used in common parlance. On the Duplicators (P) Ltd. [1974 (33) STC 333] that stencil paper could not be classified as paper for the purposes of Orissa Sales Tax Act. It is a matter of common experience that the identity of an article is associated with its primary function. It is only logical that it should be so. When a consumer buys an article, he buys it because it performs a specific function for him. There is a mental association in the mind of the consumer between the article and the need it supplies in his life. It is the functional character of the article which identifies it in the mind. In the case of a glass mirror, the consumer recalls primarily the reflective function of the article more than anything else. It is ....
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.... shape and measurements indicated in the orders, for different vehicles require screens of different shapes and measurements. The screen is manufactured from sheet glass. It is first given shape and size according to the specifications contained in the order and thereafter subjected to the process of toughening. It is a fabricated article." 29. It was submitted for the Assessees that the decisions of this Tribunal in the case of M/s. Roche Products Ltd., M/s. Punjab Bone Mills Ltd., M/s. Glaxo Labs (I) Limited, M/s. Protin Kem Ltd.; Commissioner of C.E. v. Wockhardt Pvt. Ltd. [1998 (100) E.L.T. 486] & Mayo (India) Ltd. v. C.C.E. [1998 (98) E.L.T. 630] fully support the above view. 30. In reply, it was argued for the Revenue that the Chapter Note under Heading 23 clearly brings out that the products for classification under this Chapter should be obtained by processing vegetable or animal material other than vegetable waste, vegetable residues and bye-products of such processing. It was contended that the products in question are not obtained by processing vegetable or animal material and, therefore, they cannot be classified under this Chapter. It was contended that....
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....hey have lost the characteristics of the original material, other than vegetable waste, vegetable residues and by-products of such processing.' It was argued by the ld. Counsels before us that the word appearing in this Chapter note is 'includes'; that the word 'includes' is not an exhaustive word and that the use of the word 'includes' gives the definition and Chapter Heading an extensive scope. It was contended that as against this, 'used primarily or covers only' are restrictive definitions. The use of the word 'includes' in the Chapter note clearly shows that the Chapter is to be construed not in the restrictive sense, but in the exhaustive sense. It was, therefore, argued that if the feed supplements also contained synthetic products, they cannot be excluded from the Chapter 23. It was argued that similar issue came up before the Apex Court in the case of M/s. Sun Export Corporation [1997 (93) E.L.T. 641] and the Apex Court held : "We are in agreement with the above view expressed by the Bombay High Court. The Hon'ble Bombay High Court had relied on the judgment of the Hon'ble Gujarat High Court who had held : 'It was submitted by the Respondents that the subsequent amendment ....
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....rases must be construed as comprehending not only such things as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include. The word "include" is also susceptible to other constructions which it is unnecessary to go into.' 34. It was argued for the Assessees that Note 1 of Chapter 23 is not exhaustive or restrictive in nature, but contains inclusive definition of the product covered by Chapter 23; that use of the word 'includes' in the body of the Statute is to be construed as covering other items also; that Chapter 23 covers all types of preparations which are used directly or indirectly for feeding. It was also argued that in the case of M/s. Ranbaxy Laboratories Ltd., this Tribunal held that 'the fact that some minerals and materials are also present does not make any difference.' It was argued that why it should not be said about the products before us if they contain some vitamins, provitamins and mixtures thereof. 35. On the question of use of the word 'include' in Note to Chapter 23, Revenue contended that the Apex Court in the case of South Gujarat Roof Tiles Manufacturers Assn. &....
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....s and preparations for use in making the complete feeds or supplementary feeds. The preparations for use in making complete feeds or supplementary feeds are known in the Trade as 'Pre-mixes'. These preparations are combined compositions consisting of a number of substances, each type of these substances being present in the pre-mixes in varying proportions to serve a particular purpose. Explanatory Notes under Heading No. 23.09 of the HSN (Page 177-178) further indicate that premixes contain, in addition to the active substances (Vitamins, Aminoacids, Antibiotics, Coccidiostats, etc.), stabilizers and antioxidents etc., certain organic or inorganic nutritive substances known as carriers which help in homogenous dispersion and mixing of the active substances in the compound feeds to which the preparations referred to above are added. 39. In this view of the matter, it would appear that preparations containing the active substances (Vitamins or provitamins, aminoacids, antibiotics, coccidiostats etc.) along with the said carrier would fall under Heading 23.02 of the CETA provided such preparations are of a kind used for animal feeding. It may however be noted that Heading 23.....
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....ere in very small quantities. Revenue argued that the term micro has been defined in Concise Oxford Dictionary : 1. Small, 2. denoting a factor of one millionth. It was submitted that the fact is that in some preparations, these items were present in substantial proportion which cannot be termed micro. A calculation chart was produced for M/s. Western Hatcheries, which is reproduced below : M/s. Western Hatcheries Limited Appeal No. E/1908/95-D of 1995 List of Products Classification by Depart- ment Labels Page Nos. in Vol. 2 Composition Page Nos. in Vol. 3 Remarks % of Vita- mins, etc. in the feed Test Re- port Page Nos. in Vol. 2 (1) (2) (3) (4) (5) (6) (7) 1. Ventrimix - DS 29.36 2 18 0.0008868% 57 2. Ventribee - Plus 29.36 3 19 0.00415125% 59 3. Ventrimi - Forte 29.36 4 20 0.0008878% 4. Toxi- Chek 3003.10 (Ambala) 2942.00 (Pune) 5 21 No Vitamins (Mold Inhibitor) 0.0125% to  0.075% 5. Ventrimin- 17 29.36 (No dispute at Pune) 6 22 ....
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....n the product are weighed, blended with diluents and mixed, the mixture is seived and put into blender and mixed thoroughly and then taken for packing; that some products are a premix of vitamins and highly absorbent precipitated silica which acts as a carrier. It was argued that in the case of Reckitt & Coleman of India Ltd., this Tribunal held : "Therefore, in the context of the use of the words in the notification it appears to us that preparation as used in said Item 14 would have to be a product prepared by addition mixing or other such similar process to the original commodity in order to derive a new commodity." Product has been defined as 1. A thing produced, 2. A substance obtained from another by chemical change. In the case of M/s. Aries Agro-Vet Industries Private Ltd. [1984 (16) E.L.T. 467], this Tribunal held: "We agree that the mineral supplements are indeed part of the animal feed, but these supplements are not by themselves animal feed as one would understand 'Animal Feed'. We think, however, that the right direction is the one in which an animal feed is understood to be a complete feed or as complete a feed as such feeds can be made to be by human ingenuity and th....
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....ssessees that Chapter 29 applies to vitamins only and that vitamins mixed with other ingredients cannot be classified under Chapter 29.36 in as much as Heading 29.36 covers only pro-vitamins, vitamins, derivatives of pro-vitamins and vitamins used primarily as vitamins and intermixtures of vitamins and provitamins whether or not in any solvent. Thus the emphasis was on 'used primarily as vitamins'. It was submitted for the Assessees that the products in question are not used as vitamins, but are sold as animal feed supplements and, therefore, they cannot be classified under Chapter 29.36 in as much as the products in question not only contained vitamins, but contained substances like minerals, carbo-hydrates etc. It was also submitted that Chapter Note 1 of Chapter 29 stipulates that the Chapter applies only to separate chemically defined organic compounds, whether or not containing impurities whereas Chapter Note 1(d), 1(e), 1(f) and 1(g) constitute exceptions to this Chapter; that Chapter Note 1(d), 1(e), 1(f) and 1(g) specify the permissible other ingredients in the goods covered in this Chapter. The permissible ingredients are not minerals, carbo-hydrates, proteins etc. It was,....
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....of Rule 3 (a), the Heading 23.02 provides most specific description and should be preferred to a more general description if at all in Heading 29.36. It was submitted that Heading 23.02 was specific in comparison to Heading 29.36. Hence this heading should be preferred. Subjecting the goods to the above test, it was contended that Heading 23.02 was more specific. It was alternatively contended that if the goods in question are treated as vitamins, even in that event, the process of preparation of the product in question does not amount to manufacture and since the starting material or raw materials for the products in question are vitamins themselves, and if the final product is also treated as vitamins, then there is no emergence of a new product with a distinct name, character or use. Hence, the process of preparation of the products in question does not amount to manufacture. 47. In reply to the above contentions, it was argued for the Revenue that only products obtained by processing of animal or vegetable products can be classified under Chapter 23. Therefore, classification of the products in dispute under Chapter 23 is ruled out as no evidence has been brought on rec....
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....ification of the products which consist of only different vitamins in definite proportions and no other ingredients except the solvents or stabilizers or antioxidents. Stating that such products are generally used as animal feed supplements, the issue was whether these mixtures are classifiable under Heading 23.02 as animal feed supplements or under Chapter 30.03 as medicaments or under Chapter 29.36 as vitamins etc. It was clarified that such animal feed supplements which are just intermixtures of vitamins only and there is no other ingredients except solvents, stabilizers or antioxidents, are covered by Heading 29.36. Even though they are used as animal feed supplements, they cannot be classified under Chapter Heading 23.02 as preparations of a kind used in animal feeding. It was contended for the Assessees that this clarification helps their case in as much as the preparations in dispute contain minerals, protiens, carbohydrates etc. 51. It was argued by the ld. Counsels that the position has been clarified under Notes on Pages 403 to 404 of HSN Explanatory Notes. It was argued that this clarification issued by the Bolpur Collectorate makes it very clear that mixtures of....
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....02 consists of four items : (i) Copper matte, (ii) unwrought copper (refined or not), (iii) copper waste and scrap, and (iv) master alloys. Insofar as the terms of Heading No. 74.01/02 are concerned, the primary conclusion to which we have come is that brass scrap is not a master alloy. It is nobody's case that brass scrap belongs to either of the first two categories, namely, copper matte or unwrought copper. The only question then is whether the third item 'copper waste and scrap' includes brass scrap. Putting Rule 1 in simple language, classification has to be determined according to the description of the articles in the heading and, if the Heading or a Note does not otherwise require, according to the provisions of the other Rules, Notes. In the instant case, the terms of the relevant Heading do not, by themselves, yield an answer to the question whether copper waste and scrap includes brass scrap. But, the particular Heading does not require or provide that the other rules should be excluded while determining the classification of articles under that Heading. That is how, Rules 2 to 4 become relevant for deciding the question whether 'copper waste and scrap' includes brass sc....
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....Heading 23.09 of the HSN which corresponds to Heading 23.02 of CETA 1985; that the description of the goods under Heading 23.02 is more specific and, therefore, even by applying Rules 1 to 3, the goods in their case shall be classifiable only under Heading 23.02. 56. The ld. Jt. CDR submitted that even if it is presumed that the goods in dispute are not mixtures so as to fall under Heading 29.36 directly, they are most akin to mixtures provided under Heading 29.36 in as much as the meaning of the word 'akin', according to the dictionary, means 'related by blood or kindred character'; that the word 'kindred' means 'alive or similar in character'. It was submitted by the ld. Jt. CDR that even if the mixtures in the instant case cannot directly be classified under Chapter 29.36, they being akin to mixtures classifiable under 29.36 shall be classified under Heading 29.36 as active ingredients in the products is vitamins or provitamins. 57. It was submitted by the ld. Counsels that the Larger Bench of this Tribunal in the case of M/s. Hindustan Packaging Co. Limited [1995 (75) E.L.T. 313] held that rules of interpretation are invokable only if classification cannot be de....
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....odrej Soaps Limited were also referred. Arguing the case of M/s. Godrej Soaps Limited, the ld. Counsel submitted that M/s. Godrej Soaps Limited had exported 8 consignments, out of which 2 consignments comprised of Niger Seed extractions and the remaining 6 consignments were of rice bran extractions. These goods were exported in the month of March, 1977. The Notification in operation at the time of export of these goods was Notification No. 16/77-Cus., dated 22-1-1977. The table appended to the said Notification did not include Niger Seed extractions and rice-bran extractions as an exempted animal feed. The appellants paid export customs duty on all these 8 consignments. Subsequently, they contended that Rice bran extractions and niger seed extractions were exempted, therefore, they submitted 8 refund claims. The Asst. Collector rejected the claim. In appeal also, the Exporter did not succeed. Hence the Appeal was filed before the Tribunal. The Member who wrote the order after examining the submissions set aside the impugned order and allowed the Appeal. However, the second Member did not agree with the findings of the other Member. The matter was referred to the third Member and he....
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....of Section 19 of the Customs Act are not attracted, nor has Item No. 19 of the Indian Customs and Central Excise Tariff, any application whatsoever in the present case; that the Hon'ble Delhi High Court in the case of M/s. Modern Mills Limited [1980 (6) E.L.T. 639] had quoted the Customs Tariff Ruling No. 35 of 1969, dated 27-8-1969 reading as 'The Board has under consideration the liability of "compound animal feeds" to export duty under Items 18, 19 and 21 of the Export schedule. These feeds are of different types like feeds for cattle, feeds for poultry, feeds for sheep etc. and are essentially compounded out of oil cakes, meals, rice and wheat bran, fish and meat meal, maize, gluten, molasses, vitamins etc. in varying proportions. As these feeds are compounded materials in which oil cake or meal is only one of the raw materials and these are commercially known as cattle feed, poultry feed, etc. these should be taken as such for assessment. As there is no entry in the Export Tariff for animal feeds, these will not attract any export duty.' 65. The ld. Counsel submitted that in Indian Standards IS : 9703-1980, in the Foreword Para, it had inter alia been stated "In the fi....
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....is case the Hon'ble High Court held : "The sum total of this discussion is that the animal compound feed, although made up of five or more different ingredients, has clearly emerged as a single commodity and is known in the business circle or commercial parlance as such, and in view of this, the provisions of Section 19 of the Customs Act are not attracted nor has Item No. 19 of the Indian Customs and Central Excise Tariff any application whatsoever in the present case." The Hon'ble Court further held : "I may here add that a similar question arose before the Delhi High Court in the case of The Modern Mills Limited v. Union of India and others [1980 (6) E.L.T. 639]. In the said case, the very question arose viz. whether animal feed or animal compound feed fell within the provisions of Section 19 of the Customs Act and/or Item No. 19 of the Indian Customs and Central Excise Tariff. On considering this matter, the said Court held that although the animal compound feed was made up of different ingredients, a new product had resulted and the identity of the material mixed was lost and the provisions of Section 19 of the Customs Act, 1962 or Item 19 of the Indian Customs and Central Exc....
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....apter Note. We have perused the detailed arguments. On careful consideration of the submissions made and the case law cited and relied upon by both sides, we find that there is no limiting factor in the Chapter Note so as to restrict its meaning. On the contrary, we find that Heading 23.02 of CETA 1985 corresponds to Heading 23.09 of HSN. Explanatory Notes under Heading 23.09 of HSN speak of various preparations which contain minerals, vitamins, carbohydrates, proteins etc. These explanatory Notes of HSN clearly speak of feed additives and feed supplements. According to these Notes, animal feed additives and animal feed supplements are preparations meriting classification under Heading 23.09 of HSN which corresponds to Heading 23.02 of the CETA 1985. We further note that this aspect of animal feed additives and feed supplements was noted by the Tribunal in its judgment in the case of Aries Agro-Vet Industries (P) Limited and observed that 'We think, however, that the right direction is the one in which an animal feed is understood to be a complete feed or as complete a feed as such feeds can be made to be by human ingenuity and that feed can never be only one or another of the vari....
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....2 of CETA 1985 in view of the expressions used 'not elsewhere specified'. 75. On careful consideration of the submissions made and the findings of the Tribunal in various cases cited and relied upon by both sides, we find that competing entries are Heading 23.02 and Heading 29.36. Heading 23.02 corresponds to HSN entry 23.09. Under Heading 23.09 of the HSN there are detailed notes as reproduced in the preceding paragraphs which clearly bring out that the preparations as indicated under Heading 23.09 of the HSN are to be meticulously examined to find their scope and ambit. The Notes under Chapter 23 of HSN become very relevant as Heading 23.02 of CETA 1985 speaks of preparations and is pari materia to Heading 23.09 of HSN and are to be taken into consideration while deciding the classification in terms of Central Excise Tariff Act, 1985 in as much as the Central Excise Tariff is now based generally on the HSN nomenclature. This was so held by the Apex Court in the case of C.C.E., Shillong v. M/s. Woodcraft Products Limited cited above. There is no indication in Chapter 23 in CETA 1985 that HSN note under corresponding Heading 23.09 shall be excluded. This becomes all the mor....
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.... they could be further called preparations on the basis of flour. As mentioned earlier the contention for the department is that the word "preparations" would only mean the end result, giving rise to a product, and not necessarily to a product arrived at by way of a process of addition to the original material. But, in the context of the words used in Item 14 this meaning does not appear to us to be appropriate. We feel so since flour itself is a product obtained by grinding the grain. If, therefore, the grain in the form of flour is itself to be treated as a preparation, then the words "preparation with a basis of flour" would appear to be a tautological repetition. Therefore, in the context of the use of the words in the notification, it appears to us that "preparations" as used in the said Item 14 would have to be a product prepared by addition, mixing or other such similar process to the original commodity in order to derive a new commodity. In that sense mere grinding of barley grain to prepare barley flour or barley powder (as in the case of Purity Barley) would not appear to us to amount to a preparation.' 79. Having examined the meanings of the words 'product' and '....
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....ty in the application of the term 'products' to preparations. Hence, the term includes enlarges the scope of Heading 23.02 and does not signify the phrase 'means & includes' as contended by the Revenue. 83. (a) This essentially relevant reference, therefore, leads us to examine in detail 'preparation' figuring in HSN Heading 23.09. On an examination of this Heading, we find that Heading 23.09 provides "This heading covers sweetened forage and prepared animal feeding stuffs 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 inorganic substances (supplementary feed); or (3) for use in making complete or supplementary feeds. Further describing the sweetened forage and other preparations, it has been provided in note 'C' reading as 'Preparations for use in making the complete feeds or supplementary feeds described in (A) and (B) above.' - These preparations, known in trade as "premixes", are, generally speaking, compound compositions consisting of a number of substances (sometimes called additi....
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....eaning but to their popular meaning viz. the meaning attached to the expressions by those dealing in them. The justification of the rule that the words are to be understood in their natural, ordinary or popular sense is well expressed by Justice Frankfurter : "After all legislation when not expressed in technical terms is addressed to common run of men and is, therefore, to be understood according to sense of the thing, as the ordinary man has a right to rely on ordinary words addressed." The Hon'ble Supreme Court has consistently taken the view that, in determining the meaning or connotation of the words and expressions describing an article in a tariff schedule, one principle which is fairly well settled is that those words, 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. 88. In para 13 of its judgment, the Apex Court in the case of Union of India v. Garware Nylons Ltd., [1996 (87) E.L.T. 12] held : " Stated briefly, we should understan....
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....xperts and Affidavits from Dealers/Users; (c) Definition of "Animal Feed Supplement" given for the purpose of exemption under Notification No. 6/84-C.E., dated 15-2-1984; (d) Description of the goods provided for under Heading 23.09 of HSN; (e) Clarifications contained in Board's Circulars (1) Circular No. 1/90, dated 1-1-1990; (2) Circular No. 188/22/96-C.X., dated 26-3-1996 and (3) Trade Notice issued by Bholpur Collectorate dated 18-12-1990; (f) Case Law on the subject - (i) the decision of the Hon'ble Gujarat High Court in the case of Glaxo Laboratories (India) Ltd. [1979 (43) STC 386]; (ii) Judgment of the Hon'ble Bombay High Court in the case of M/s. Glindia Limited [1988 (36) E.L.T. 479] and (iii) Judgment of the Apex Court in the case of M/s. Sun Exports Corporation v. C.C. [1997 (93) E.L.T. 641]; (g) Findings of the Tribunal in the case of M/s. Ranbaxy Laboratories Limited v. C.C.E., New Delhi [1994 (53) ECR 546], Aries Agro-Vet Industries (Pvt.) Ltd. [1984 (16) E.L.T. 467] and Eskayef Ltd. [1990 (49) E.L.T. 649 S.C.]. Technical Literature : Meaning of Feeding Stuffs. 92. The Book on Animal Nutrition for Tropics by Raghbir under heading 'Concentrates' on Page....
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....he judgment of Aries Agro-Vet Industries Private Limited. In para 10 of this Order, this Tribunal observed : "We agree that the mineral supplements are indeed part of the animal feed, but these supplements are not by themselves animal feed as one would understand 'animal feed'. It is a fact that Aries Agro-Vet describe their goods as animal feed supplements, but we do not think that this by itself should tell against them. We think, however, that the right direction is the one in which an animal feed is understood to be a complete feed or as complete a feed as such feeds can be made to be by human ingenuity; and that feed can never be only one or another of the various ingredients, elements, substances, that an animal needs in a balanced feed." Thus, the position has been very clearly examined and brought out in this decision of the Tribunal, making it clear that animal feed is supplemented by addition of proteins, vitamins, carbo-hydrates etc. to make it a complete feed. 96. Preparations of a kind used in animal feeding are preparations which are used in the context of mixed feed of livestock and poultry both of which are reared for production purposes not only domesticall....
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....t and concentrates have been defined under Exemption Notification No. 6/84-C.E., dated 15-2-1984 wherein it has been set out "animal feed supplement mean an ingredient or combination of ingredients added to the basic feed mix or parts thereof to fulfill the specific need usually used in micro-quantities and requiring careful handling and mixing." Further, "Animal feed Concentrates" means a feed intended to be diluted with other feed ingredients to produce a complete feed optimum nutrition balance. This definition, though given for the specific purpose, can be only a guide for understanding the meaning of the terms used in the Notification in particular, but can be generally understood to so mean. These preparations are pre-mixes and mixed in feed in small micro-quantities used for feeding the animals. Thus, these definitions, though, cannot be taken as the only guide, however, support the intention indicating that there are certain preparations which are used for feeding the animals and are added to the normal feed of the animal to obtain desired results from the animals. Description of Preparatory under Heading 23.09 of HSN 100. We have copiously quoted from the descrip....
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....ing present in the premix in varying proportions to serve a particular purpose. Explanatory Notes under Heading 23.09 of HSN (Pages 177-178) further indicate that premixes contained in addition to the active substances (vitamins, amino acids, antibiotics, coccidiostats etc.) and stabilizers, anti-oxidants, solvents etc.' In para 6, the Board clarified "In this view of the matter, it would appear that preparations containing active substances (Vitamins or provitamins, amino-acids, antibiotics, coccidiostats, etc.) along with the said carriers would fall under Heading 23.02 of CETA 1985, provided such preparations are of a kind used in animal feeding. It may, however, be noted that Heading 23.09 of HSN excludes products of Chapter 29 and medicaments of Chapter 30.03 or 30.04. Hence, while deciding the classification of products claimed to be animal feed supplements, it may be necessary to ensure that the said animal feed supplements are ordinarily or commonly known in the trade as premixes for use in animal feed". This clarification confirms the fact that if the end use unequivocally shows that the preparation is known in the trade as animal feed supplement, it should be treated as a....
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....hedule 1 of the Gujarat Sales Tax Act, 1969 for the year 1969 and whether on the facts and in the circumstances of the case, Vitablend AB 2D 3 and Vitablend WM Forte are covered by Entry of Schedule-I of the Gujrat Sales Tax Act, 1969 for the year 1969. The Hon'ble High Court, after examining the technical literature on the subject, observed : 'From what has been stated above, it becomes clear that even in its popular sense, that is to say, the sense in which people conversant with livestock farming and poultry raising and those dealing in cattle-feed or poultry-feed would attribute to those words, ration for production, such as feed additives or supplements like proteins, minerals, vitamins etc., would truly constitute 'cattle feed' or 'poultry feed', as the case may be. In such a context and in view of the setting of the word 'cattle-feed' in the company of the word 'concentrates', it would be difficult to reach the conclusion at which the Tribunal arrived. The Tribunal's decision as to the true scope of the entries in question in the instant case, relying upon its earlier decision, therefore, is obviously not correct in law.' 104. It was argued that this decision was dis....
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....ents of similar goods at Calcutta. These consignments were assessed to duty under Heading 29.01/45 (17) of the Customs Tariff Act, 1975 read with Item 68 of the erstwhile Central Excise Tariff. The importer paid the duty and later on claimed refund of duty claiming that the goods imported were classifiable under Item 23.01/07 as 'Animal Feed' and as per Notification No. 234/82-C.E., dated 1-11-1982, these goods were exempted from levy of duty. Lower authorities rejected the claim. The Apex Court after examining the decision of the Hon'ble Bombay High Court in the case of M/s. Glindia Limited, held "We are in agreement with the above view expressed by the Hon'ble Bombay High Court". The Hon'ble Bombay High Court has relied upon the decision of the Hon'ble Gujarat High Court. It was argued for the Revenue that this decision was on an exemption notification and that the interpretation given in an exemption notification case cannot be directly applied to the case of classification. We note that Notification No. 234/82, dated 1-11-1982 as amended by Notification No. 6/84, dated 15-2-1984 exempted animal feed. Therefore, the issue before the Apex Court was whether animal feed supplement ....
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.... a concentration of parts to achieve a definite purpose like prevention of diseases, improvement in the performance of livestock, increase in production, increases in weight, increase in milk production etc. It was their case that Penta Forte powder, apart from vitamins, the preparation also contains Calcium sulphate and magnesium oxide which are minerals and that the solvent was soyabean oil; that in the case of Famitone, the active ingredient includes, apart from vitamins, Ascorbic acid and Poly Sorbate and also a solubiliser and that the solvent used is Polyethylene Glycol. 109. The Tribunal in this case observed in para 31: 'As such, apart from the characteristic features, the properties and uses, it is necessary to ascertain how the product is obtained and processed or prepared, for the product must be either in the nature of a residue or waste from the food industries or prepared animal fodder or a preparation derived from or traceable to such a material, in order to attract any of the entries under this Chapter, and the products included under Heading 23.02 by virtue of the Chapter note are also required to be ascertained accordingly.' It was observed that note under....
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....ing. They represent 2 different distinct items. In case the word 'include' is interpreted to read as 'means and includes', then, perhaps preparations as described under Heading 23.02 of CETA 1985 will not be included. We have discussed at length the significance of the word 'includes' and have held that 'includes' used in Chapter Note extends the scope and coverage of the Chapter and, therefore, 'preparation' described under Heading 23.02 of CETA 1985 will be covered even if they are not obtained by processing vegetable or animal material. We also note that the Hon'ble Bombay High Court held that animal feed is genre and animal feed supplement is a specie. 111. No doubt, in the Ranbaxy Laboratories case, the Tribunal examined the implication of the word 'include' and came to the conclusion that if could only refer to those preparations used in animal feeding which were not elsewhere specified and were obtained by processing vegetable or animal material. The implication of the word 'include' in the context of other words in Chapter 23 like 'products' and 'preparations', we have already held that 'include' used in the Note of Chapter 23 of CETA 1985 should be interpreted to m....
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....is a reference to substances or preparations containing proteins or minerals or vitamins, anti-biotics, etc. the basic material is always derived from the processing of residues or waste from food industry." 114. In the above analysis what has been forgotten is that we are dealing with the additives and supplements and not with the ration. There is no doubt that the preparations with which we are dealing are not rations for daily subsistence of the animal but these preparations are given in addition to the ration to obtain the desired results. The finding of the Tribunal, therefore, is wrong as it has not taken pre-mixes against Item 6 in para 112. 115. In Aries Agro-Vet Industries's case, the question being examined by the Tribunal was that of applicability of exemption Notification No. 55/75-C.E. where animal feed was exempted. This Tribunal while observing, "We agree that the mineral supplements are indeed part of the animal feed but these supplements are not by themselves animal feed as one would understand animal feed. It is a fact that Aries Agro-Vet describe their goods as mineral feed supplements, but we do not think that this by itself should tell against t....
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....e not used in animal feeding. It was also argued by the Counsels for the Assesees that CETA 1985 is now based on HSN and that in the Compendium of Rulings on HSN, it has been clearly clarified that Animal feed preparations shall be classifiable under Heading 23.09 of HSN. 117. For Revenue, it was argued that since the goods contain vitamins and/or provitamins and mixtures thereof, they were correctly classifiable under Heading 29.36 of CETA 1985. The contention of the Revenue was that the active ingredient in the preparations were vitamins and/or provitamins; that vitamins and provitamins or mixtures thereof are covered by a specific Heading 29.36 of CETA 1985; that note to Chapter 23 of CETA 1985 clearly states that only such preparations which are not elsewhere specified or included will qualify for classification under Heading 23.02 of CETA 1985; that vitamins/provitamins and mixtures thereof are specifically covered by Heading 29.36 of CETA 1985; that mixtures of vitamins or provitamins are specifically mentioned under Heading 29.36 of CETA 1985; that mixtures even if they contain other materials can be considered for classification under Heading 29.36 of CETA 1985 in t....
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....uire the applicability of the Rules of Interpretation. It was argued for the Assessees that premixes which the preparations are called do contain synthetic materials like proteins, carbohydrates, minerals etc; that notes under Heading 29.36 of HSN lay emphasis on the words 'used primarily as vitamins'; that no evidence has been placed on record by the Revenue that the preparations under consideration are used primarily as vitamins. 119. We have carefully considered the rival submissions. We find that Chapter Note 1 to Chapter 29 of CETA excludes the applicability of Rules of Interpretation except Rule 1 in as much as the words used in this note are "except where the context otherwise requires, the headings of this Chapter 'apply only to' ....." We also note that when Heading 29.36 of CETA 1985 is read with notes under Heading 29.36 of HSN, we find that the emphasis on each item is 'used primarily as vitamins'. No evidence has been placed on record by Revenue that the preparations in dispute before us are used primarily as vitamins. We further note that the inter-mixtures contemplated under Heading 29.36 of HSN are defined as "for instance, natural concentrates of vitamins A....
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....ter detailed examination of the technical literature on the subject and other evidence, observed : "Cattle-feed" and "Poultry-feed", however, are words which are used in the context of the mixed feed of livestock and poultry, both of which are reared for production purposes not only domestically, but also commercially. From what has been stated above, it becomes clear that even in its popular sense, that is to say, the sense in which people conversant with livestock farming and poultry raising and those dealing in cattle-feed or poultry-feed would attribute to those words, ration for production, such as feed additives or supplements like proteins, minerals, vitamins etc. would truly constitute "cattle-feed" or "poultry-feed", as the case may be." Similar view was expressed by the Hon'ble Bombay High Court in the case of M/s. Glindia Limited v. Union of India, when examining certain items for purposes of levy and collection of sales tax, described as cattle feed and poultry feed. The Hon'ble Bombay High Court, relying on the judgment of the Hon'ble Gujarat High Court in the case of Glaxo Laboratories (I) Ltd., quoted the following lines from the judgment of the Gujarat High Court : ....
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....ts and animal feed concentrates'. After coming into force of this notification, the petitioners have been given the benefit of full exemption. The only question is whether prior to this notification, the petitioners are entitled to exemption under the original Notification No. 55 of 1975. In the case of the petitioners themselves namely Glaxo Laboratories (India) Limited v. The State of Gujarat reported in 1979 (43) Sales Tax Cases, page 386, the Gujarat High Court was required to consider whether certain vitamin products including Vitablend WM Forte which were used for supplementing cattle and poultry feed should be classified as 'cattle feed' within the meaning of Entry 21 of Schedule-I of the Gujarat Sales Tax Act, 1969 or 'poultry feed' within the meaning of Entry 22 of the Schedule-I of that Act. The Gujarat High Court has held that the terms 'cattle feed' and 'poultry feed' must include not only that food which is supplied to domestic animals or birds as an essential ration for the maintenance of life but also that feed which is supplied over and above the maintenance requirements for growth or fattening and for production purposes such as for reproduction, for production ....
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....t the words should be construed in the popular sense is a qualified rule and should apply if the statute contains language which is capable of being construed in a popular sense. 124. Looking to the various aspects of the matter, the technical literature on the subject and judicial pronouncements made, we hold that niger seed/rice bran extractions are animal feed and correctly classifiable under Heading 21 of 2nd Schedule (Export Tariff). 125. In Para 36 of its judgment in the case of M/s. Dunlop India Limited and M/s. Madras Rubber Factory Ltd. v. U.O.I. & Ors. [1983 (13) E.L.T. 1579], the Apex Court ruled that : "It is clear that meanings given to articles in a fiscal statute must be as people in trade and commerce conversant with the subject, generally treat and understand them in the usual course. But once an article is classified and put under a distinct entry, the basis of the classification is not open to question. Technical and scientific tests offer guidance only within limits. Once the articles are in circulation and come to be described and known in common parlance, we then see no difficulty for statutory classification under a particular entry." In the i....
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....uct is a preparation of a kind used in animal feeding; affidavits of Users/Dealers were also produced to show that the preparations are bought and sold as preparations of a kind used fin animal feeding. 127. In the case of M/s. Colgate Palmolive (India) Limited v. Union of India & Ors. [1980 (6) E.L.T. 268 (Bom.)], the Hon'ble Bombay High Court in Para 15 of its judgment, quoting from a decision of the same Court in the case of M/s. Sandoz (India) Limited v. U.O.I. & Ors. in Spl. Civil Application No. 2829 of 1974, dated 5-7-1979 [1980 (6) E.L.T. 696 (Bom.)], held: "It is settled law that in a case of taxation, the burden of proving that the necessary ingredients prescribed by the taxing provision are satisfied is entirely upon the taxing authority. It was primarily, therefore, for the taxing authority to satisfy the Court that the formulation of the Foron pigment in the form of Foron liquid is an entirely distinct commodity having entirely a distinct name, character and use as compared with the pigment itself..." In the instant case, a lot of evidence was placed by the Assessees in support of their contention that the preparations were of a kind used in animal feeding, nec....
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....evidence was produced by the Assessees to prove that the product was a preparation of a kind used in animal feeding. Obviously, the meaning of the words was clear, unambiguous and, therefore, there should be no dispute for accepting the goods as classifiable under Heading 23.02 of CETA 1985. 131. In para 15 of their judgment in the case of Union of India v. M/s. Garware Nylons Limited [1996 (87) E.L.T. 12 (S.C.)], the Apex Court ruled: "...It is for the Taxing Authority to lay evidence in that behalf even before the first adjudicating authority. Especially in a case as this, where the claim of the assessee is borne out by the trade enquiries received by them and also the affidavits filed by persons dealing with the subject matter, a heavy burden lay upon the revenue to disprove the said materials by adducing proper evidence. Unfortunately, no such attempt was made. As stated, the evidence led in this case conclusively goes to show that nylon twine manufactured by the assessees has been treated as a kind of nylon yarn by the people conversant with the trade. It is commonly considered as nylon yarn. Hence, it is to be classified under Item 18 of the Act. The Revenue has faile....