TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1680
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....intend to import. 2 Applicant's Statement of Relevant facts having a bearing on the question raised: 2.1 The applicant is part of the Novus Group, a global supplier of innovative animal feed additives. They import and trade in different categories of animal feed additives used in the manufacture of animal feed supplements. One such group of products is "Enzyme" based products for use in manufacture of animal feed/supplements. They intend to import the product namely "Xylamax" through seaports of Chennai, Mundra, Nhava-Sheva and Kolkata. 2.2 Xylamax is a unique xylanase enzyme animal feed additive for consistent all-around performance. It is an enzyme feed additive improving Non-Starch Polysaccharides (NSP) digestibility in animal feed. It is more efficient in breaking down of Xylans in feed grain and the optimal release of nutrients to the bird. It works well in all types of diets typically used in poultry production. It is a GH 11 type of xylanase which is highly effective in breaking down soluble and insoluble xylans in the grains which are primarily used in poultry diets. The most effective and economical way to optimize nutrient release and uptake in poultry is wit....
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....uct under chapter 29 or medicaments under heading 3003 or 30.04. Our product Xylamax fulfil all the above three conditions and therefore deserves classification under CTH 23.09. 3.3 Circular NO.80/54/2018-GST F.No.354/432/2018/TRU dt.31-12-2018 was issued by TRU, Department of Revenue on clarification regarding GST rates & Classification (goods) for number of items and Tariff heading. In Para 5 of the Circular the dispute in classification of animal feed supplements/feed additives from drugs between tariff heeding 2309 and 2936 has been discussed. In para 5.4 of the Circular, it is stated that "while deciding the classification of the products claimed to be animal feed supplements, it may be necessary to ensure that the said animal feed supplements are ordinarily or commonly known to the trade as products for a specific use in animal feedings". Our Product Xylamax is well known in the trade as animal feed additive for a specific use in animal feeding. In Para 5.2 of the Circular it is stated that "HSN 2309 interalia covers regarding vitamins and pro-vitamins which improve digestion and more generally ensure that the animal makes good use of the feed and safe guard its heal....
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....e headings and any relative section or chapter notes." In the event that the goods cannot be classified solely. on the basis of GRI 1, and if the headings and legal notes do not otherwise require, GRIs 2 through 6 may be applied in order. The relevant headings for classifications are reproduced below: 2309 Preparations of a kind used in animal feeding 35.07 - 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 saidchapter no....
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....s dispersion and mixing of these substances in the compound feeds to which the preparations are added. 5.2.2 The impugned products are a combination of active ingredients and inactive ingredients such as antioxidants, minerals and stabilisers. The product composition is given in Table 2. These goods consist of active ingredients, preservatives, stabilisers and carriers. As per HSN explanatory notes, active ingredients with a suitable carrier along with 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." "5.3.3 It is observed that heading 2309 is an end-use-based heading. In this regard, reliance may beplaced on the decision of Hon'ble in the case of Tetragon Chemie (P) Ltd vs. Commission....
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....l feed" 5.3.4 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. 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." 3.7 In regards to alternate classification under heading 3507, it is observed that subheading 35079099 covers "Enzymes; prepared enzymes not elsewhere specified or included; Other; Other". The relevant extracts from HSN explanatory notes to heading 3507 are reproduced below: 35.07 - Enzymes; prepared enzymes not elsewhere specified or included. Enzymes are organic substances produced by living cells; they have the property of causing and regulating specific chemical reactions inside or outside living cells, without themselves undergoing any change in their chemical structure. This heading includes :... (B) Enzymatic concentrates. These concentrates ar....
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....(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 noted that fungal amylases sometimes contain proteases, glucose oxidase and invertase. (c) Amyloglucosidases: These enzymes, obtained, for example, from moulds of the genus Rhizopus or the genus Aspergillus are strong saccharifiiing agents but have no liquefying properties. They are used to obtain a high yield of dextrose from starchy materials. Their main applications are in the production of glucose syrups and dextrose, and as sacchariffing agents for grain alcohol fermentation mashes ... 3.8 It is to be noted that the active ingredient present in the impugned goods is in the range of 1.2% to 17%. The products, apart from enzymes, also include stabilisers, solvents, preservatives and carriers. Theinclusion of such additives makes the impugned products suitable for specific use. Th....
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....anufacturing Process: Enzyme proteins are natural products used in many areas of food production. Enzymes are manufactured by a process wherein safe and approved microbial organisms are grown under optimum conditions in a fermenter and the enzyme proteins are secreted into the growth medium containing the nutrients for growth. All nutrients and other ingredients are food grade and approved for use In food production. The process involves the following steps: * Fermentation: A nutrient solution is prepared and sterilized and charged into a vessel with aeration and stirring capability. These vessels are typically in size between 10,000 and 50,000 liters. The vessel is then inoculated with the microbial strain Pichia pastoris, and the organism is grown for a period of typically 5-7 days. The xylanase enzyme is deposited in the growth medium. * Downstream Processing, Concentration and Spray Drying: After the growth of the organism is terminated, the fermentation broth is harvested and concentrated. The liquid concentrate is then spray-dried to create dried fermentation solubles, * Enzyme Formulation: For commercial application, the dry concentrated product....
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....ascertaining the true meaning of any expression used in the Tariff Act. It explicitly states that Heading 2309 which specifies 'Preparation for use in the making of complete feed or supplements'. Para II(C) covers premixes consisting of a vitamin along with a suitable carrier added to ensure homogenous dispersion and mixing of the vitamin in the compound feeds to which the preparations are added. Secondly, as per General Rules of Interpretation, classification of goods shall be determined according to the terms of the headings of the tariff schedule, the section notes and chapter notes. As per the Chapter Notes in the First Schedule to Customs Tariff Act, 1975, 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. The CTH 2309 starts with CTI 23091000 - Dog or Cat food, put up for retail sale followed by 230990- Other The Sub Heading 230990 - Other is further categorized by triple dash tariff item: Co....
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....yme for feed additive/supplement for animal feed are classified under CTH 23099090 as per import data available in Zauba.com. 3.15 Therefore, we are of the view that our product Xylamax is classifiable under CTH 23099090. It is prayed to consider our application and issue suitable Rulings on the classification of the subject goods. 4. In terms of provisions of the Section 28-I (1) of the Customs Act, 1962 read with Sub- Regulation no. (7) of the Regulation no. 8 of the Customs Authority for Advance Rulings Regulations, 2021, on the receipt of the said application, office of the CAAR, Mumbai forwarded copy of the said application/submissions to the concerned Jurisdictional Customs Commissionerate i.e. Chennai, Kolkata, Nhava Sheva and Mundra as stated by the applicant at Sr. No. 13 of the CAAR-I form (Application form for advance rulings) calling upon them to furnish the relevant records with comments, if any, in respect of said application, however, office of the CAAR, Mumbai has not received any comments/records from any of the jurisdictional Commissionerate's till date. Records of Personal Hearing: 5. A personal hearing in the matter was conducted on 07.04.2025 in the....
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....d goods. 6.3 Classification of goods in the Nomenclature shall be governed by the General Rules of Interpretation : Rule 1 provides that the titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the subsequent provisions which are to be followed sequentially. 6.4 Thus, it becomes necessary to refer to relevant Section notes, Chapter notes and Heading notes to decide the classification of the subject goods under consideration. 6.5 The Customs Tariff is aligned up to the 6 digit level with the Harmonized System of Nomenclature (HSN) issued by the World Customs Organization (WCO) For uniform interpretation of the HSN, the WCO has published detailed Explanatory Notes to the HSN which have long been recognised as a safe guide to interpret the Schedules to the Customs Tariff 6.6 In the case of CC vs. Wood Craft Products Ltd., (1995) 77 ELT 23 (S.C.) the Hon'ble Supreme Court of India held that in case of doubt, HSN is a sa....
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....ational 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. The HSN explanatory note II (C) to heading 2309 further elaborates on premixes as below: .................. (C) PREPARATIONS FOR USE IN MAKING THE COMPLETE FEEDS OR SUPPLEMENTARY FEEDS ...... These preparations, known in the trade as "premixes", are, generally speaking, compound compositions consisting of a number of substances (sometimes called additives) the nature and proportions of which vary according to the animal production required. These substances are of three types: (1) Those which improve digestion and, more generally, ensure that the animal makes good use of the feeds and safeguard its health : vitamins or provitamins, amino-acids, antibiotics, coccidiostats, trace elements, emulsifiers, flavourings and appetisers, etc. (2) Those designed to preserve the feeding stuffs (particularly the fatty components) until consumption by the animal : stabilisers, anti-oxidant....
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....e 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 various ingred....
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.... heading 2309 further states that this heading excludes protein substances of Chapter 35. For classification under heading 3507, it is observed that subheading 35079099 covers "Enzymes; prepared enzymes not elsewhere specified or included". The relevant extracts from HSN explanatory notes to heading 3507 are reproduced below: 35.07 - Enzymes; prepared enzymes not elsewhere specified or included. Enzymes are organic substances produced by living cells; they have the property of causing and regulating specific chemical reactions inside or outside living cells, without themselves undergoing any change in their chemical structure. Enzymes may be referred to as follows: (I) According to their chemical constitution, e.g .: (a) Enzymes in which the molecule consists solely of a protein (e.g., pepsin, trypsin, urease). (b) Enzymes in which the molecule consists of a protein combined with a non-protein compound of low molecular weight, acting as a cofactor. The cofactor may be either a . metal ion (e.g., copper in ascorbate oxidase, zinc in human placental alkaline phosphatase) or a complex organic molecule called a coenzyme (e.g., thiam....
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....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 noted that fungal amylases sometimes contain proteases, glucose oxidase and invertase. (c) Amyl glucosidases: These enzymes, obtained, for example, from moulds of the genus Rhizopus or the genus Aspergillus are strong saccharifying agents but have no liquefying properties. They are used to obtain a high yield of dextrose from starc....
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....above-mentioned active ingredients, stabilizers/ preservatives/ carriers. The active ingredient Xylanase in the subject goods is an enzyme feed additive that improves Non-Starch Polysaccharides (NSP) digestibility in animal feed. The inclusion of the carriers viz limestone, starch makes the impugned products suitable for specific use in animal feed only. The product as such is not "Xylanase" only but is combination consisting of Limestone and Starch as other dominant constituents. Limestone is primarily made of Calcium Carbonate (CaCO3). Calcium is essential for bone formation, egg shell quality in layers and perform metabolic functions in animals. Similarly, Starch is primary source of digestible carbohydrate. It provides readily available energy essential for growth, reproduction and productivity. It improves taste and texture of the feed encouraging better feed intake specially in the diets of animals like- pigs and poultry. The products in question are solely for the purpose of rendering them suitable for use in animal feed and render it unfit for general use. It is not disputed in the instant case, that the specific use of the impugned goods is for animal feed only. Also, in t....
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....rganic nutritive substances known as carriers which help in homogeneous dispersion and mixing of the active substances in the compound feeds to which the preparations referred to in the said explanatory notes are added 6. It this view of the matter, it would appear that preparations containing the active substances (vitamins or pro-vitamins, amino-acids, antibiotics, coccidiostats etc.) along with the said carriers would fall under Heading 23.02 of the CET provided such preparations are of a kind used in animal feeding, It may however be noted that Heading 23.09 of the HSN excludes products of Chapter 29 and medicaments of Heading 30.03 or 30.04. Hence, while deciding the classification of the products claimed to be animal feed supplements, it may be necessary to ensure that the said animal feed supplements are ordinarily or commonly known to the trade as products for a specific use in animal feeding. 7.9.1 Further, I find that Central Board of Indirect Taxes and Customs (CBIC) vide Instruction No. 34/2022 dated 30.12.2022 [F.NO. 401/92/2022-CUS-III] have referred the Office Memorandum No. L- 110102(2)/2/2016-Trade (E-246) dated 21.12.2022 issued by the Department of An....
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....s a test which is attracted whenever the statute does not contain any definition. 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 a mirror, an article which reflects images. It is referred to as a glass mirror only because the word glass is descriptive of the mirror in that glass has been used as a medium for manufacturing the mirror. The basic or fundamental character of the article lies in its being a mirror." 8.1 Similarly, Hon'ble Supreme Court in the case of Commissioner of Central Excise v. Wockhardt Life Sciences Ltd. reported in 2012 (277) E.L.T. 299 (S.C.) has held that the functional utility and predominant usage of the commodity must be taken ....