TaxTMI 
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2025 (12) TMI 1678
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....ide No. 27AAFCH8169P1ZP under the Maharashtra Goods and Services Tax Act, 2017 and holds a valid Importer-Exporter Code number AAFCH8169P issued by the Additional Director General of Foreign Trade, Mumbai under section 7 of the Foreign Trade (Development and Regulation Act), 1922 (22 of 1922). Thus, the applicant is rightly covered under the definition of 'applicant' as provided under Section 28E(c)(i) of the Customs Act, 1962 for making an Advance Ruling Application. 2.2 The applicant is presently engaged in the trading business of importing 'Chemicals and Animal feed/Supplements' from China, the British Virgin Islands, and Hong Kong. The applicant submitted that they intend to import 'Choline Chloride 60% Corn Cob (Feed Grade) (Powder Form in 25 kg Bags)' from China. They further submitted that as per the present scheme of Classification of Commodities under the Customs Tariff Act, 1975, 'Preparation of a kind used in Animal Feeding' is classified under Chapter Heading 2309, while 'Concentrates for Compound Animal Feed' are particularly and specifically classified under the Tariff Item 23099020. 3. Applicants Interpretation of Law/Fac....
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....nd. Content mainly corn cob as a carrier. ii. Properties: a. Appearance: Light brownish powder b. Content of choline chloride: 60% by weight c. Odor: Smell-light pungent smell. iii. Production Methods: Choline chloride 60% corn cob is typically produced by spraying choline chloride liquid on corn cob powder (or rice husk or other agricultural waste product). Then it is dried in rotating kiln with hot blowing air. Choline chloride 60% corn cob is then forwarded to the conveyor belt and packed in 25 kg. bag with automatic machinery. iv. Uses and Applications: Choline chloride 60% is commonly used as a supplement in animal feed, particularly for poultry, swine, and ruminants. It is essential for proper liver function, fat metabolism, and muscle development. It is an essential nutrient because animals cannot synthesize sufficient amounts of choline on their own. v. Health Benefits: a. Liver Health: Choline is crucial for liver function and helps in preventing non- alcoholic fatty liver disease (NAFLD). b. Brain Health: Choline is vital for the synthesis of acetylcholine, which is essential for memory and c....
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....f these substances in the compound feeds to which the preparations are added. Provided they are of a kind used in animal feeding. " 3.6 The applicant reproduced the relevant extracts of the CTH 2309 as below for ease of reference: 2309 Preparation of a kind used for animal feeding 2309 10 00 - Dog or cat food, put up for retail sale 2309 90 - Other : 2309 90 10 --- Compounded animal feed 2309 90 20 --- Concentrates for compound animal feed --- Feeds for fish (prawn, etc.) : 2309 90 31 ---- Prawn and shrimps feed 2309 90 32 ---- Fish feed in powdered form 2309 90 39 ---- Other 2309 90 90 --- Other 3.7 The Applicant submitted that Choline Chloride 60% Dry powder on corn cob carrier helps in the growth and optimum health of poultry birds. They further submitted that Choline chloride is available in different concentrations, with 60%, 70%, and 75% variations. The Choline Chloride 60% corn cob (feed grade) product is a premix that contains additives, such as corn cob and it is a dry powder that uses corn cob as a carrier. They further submitted that Choline Chloride 60% on Corn Cob is used as a feed supple....
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....under F. No. L-110102(2)/2/2016-Trade (E-246). 3.12 The applicant further submitted that CBIC issued instructions vide Instruction No. 34/2022 dated 30.12.2022 regarding the Consolidated list of animal feed additives/ premix/ supplements for import into India wherein it is mentioned that import of animal feed additives/ premix/ supplements will be regulated strictly. Further, From the said instructions issued by the CBIC, it can be concluded that the department has accepted the items mentioned in the Consolidated List issued by the Department of Animal Husbandry and Dairying as animal feed additives/premix/supplements and other than those mentioned in the consolidate list will not be allowed under the animal feed additives/premix/supplements. 3.13 The applicant further submitted that the subject goods viz. "Choline Chloride 60% corn cob (feed grade)' is excluded from Chapter 29 and reproduced the Relevant Chapter notes of 29 as below: Note 1. Except where the context otherwise requires, the headings of this Chapter apply only to: (a) Separate chemically defined organic compounds, whether or not containing impurities. (A) Chemically defined compounds ....
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....ferent from products and if the term 'includes' was not there, there would have been difficulty 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 and includes'. The preparations given under Heading 23.09 of HSN are clearly defined and show the contents leaving no ambiguity or doubt and shall have to be given the importance they deserve. In the absence of any definition given in the enactment, the meaning of the term in common parlance has to be adopted. In the instant case, the preparations have been clarified and specified under Heading 23.09 of HSN which has been adopted under Heading 23.02 of CETA, 1985 and hence the statute is clear in so far as preparations are covered. These preparations may contain minerals, vitamins, proteins etc. Therefore, the note of Heading 23.02 of CETA, 1985 has to be read and meant to extend the scope of heading so as to include preparations not confined to those obtained by processing animal or vegetable material but to preparations containing synthetic material also. [paras 83, 89, 90] Animal feed -....
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....y contain synthetic ingredient also. [1988 (36) E.L.T. 479; 1997 (93) E.L.T. 641; 1984 (16) E.L.T. 467; 1995 (77) E.L.T. 23 (S.C.); 1979 (43) STC 386; relied on]. [paras 72, 73, 95, 97, 98, 101, 112] Further, it was confirmed by the Hon'ble Supreme Court in the case of Ranbaxy Laboratories Ltd. V/s. Collector {2006(193) E.L.T.A92 (S.C.)} that, - Pentaforte and Famitone - Synthetic preparations containing mixtures of vitamins as active ingredients - Classifiable under Excise Heading 23.02. 3.16 The Applicant submitted that the Tribunal in the case of SMZS Chemicals Ltd. V/s. Commissioner of Central Excise, Raigad {2006(193) E.L.T.346 (Tri. - Mumbai} had held that 'Choline Chloride as animal feed' is classified under CTH 23.20 - Animal feed supplement - Choline Chloride manufactured by appellant classifiable as animal feed under Heading 23.20 of Central Excise Tariff even if made synthetically. - Preparations described under Heading 23.20 of Central Excise Tariff cover even those products which are obtained by processing vegetable or animal material because the word 'includes' in chapter note of Chapter 23 extends the scope and coverage of this Chap....
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....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. 3.20 The Applicant submitted that the first type of animal feedstuff, i.e. complete feed, contains energy nutrients, bodybuilding protein nutrients or minerals and function nutrients; the second type of animal feedstuff, i.e., secondary feed, is the preparations devised to compensate for deficiencies, so as to ensure a well-balanced animal diet, consisting of proteins, minerals or vitamins plus additional-energy feeds and the third type is used for making complete or supplementary feeds. The product in question is stated to belong to the aforesaid categories of food supplements. 3.21 The applicant submitted that for the identity of the product, the manufacturer supplier has declared in their literature that it is for animal feed. The supplier in their literature has categorically mentioned that the impugned products is a dietary supplement in animal feed, particularly for poultry, swine, and rum....
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....hat Explanatory notes to the HSN are representative and symbolic of the common trade parlance and these notes particularly those under Heading 23.09 also throw light on the question that pre-mixes including those containing mineral substances and vitamins or provitamins, trace elements, appetisers, soya flour or meal, yeast, etc. are covered by it. We think that the test laid down by the Hon'ble Bombay High Court in the case of Chemical Fibres [1982 E.L.T. 917] is a safer and reliable test where the evidence of trade usage is not beyond doubt, then a reference to technical literature cannot be precluded. In regard to Niger Seed/Rice Bran extractions, we hold that they are animal feed." 3.23 The applicant submitted that in Para 12 in the case of Tetragon Chemie (P) Ltd. v. Collector of Central Excise, Bangalore - 2001 (138) E.L.T. 414, it was held that,- "wherein 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. Concentr....
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.... imports and the mere fact that liquid Choline Chloride is classifiable under 29231000 while dry Choline Chloride is classifiable under 23099010 does not render them dislike articles for the present purposes. Both the customs classifications were considered in the previous two investigations as well. 3.25 The Applicant submitted that the subject goods 'Choline Chloride 60% Corn Cob (Feed Grade)' is a dry powder and an important compound in animal nutrition; and is used as a supplement in animal feed. Therefore, it is properly and correctly classifiable under CTI 23099020. 3.26 The Applicant submitted that the impugned product is commonly known in the trade parlance as products for specific use in animal feeding i.e. dietary supplement to animal feed. The manufacturer M/s. Taian Havay Chemicals Co. Ltd., in their literature, has mentioned it as a 'dietary supplement for animals, particularly in livestock and poultry industries', and on printed bags/labels of the imported Bags, it is mentioned as 'Poultry Feed Grade' or 'Poultry Feed Supplements'. 3.27 The applicant submitted that from the above, it is evident that the product is sold as anima....
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....e, 60% in corn cob (feed grade), is primarily a feed supplement used in the livestock and poultry industries. The applicant asserts that this product should be classified under CTH 2923 1000, which pertains to Choline Chloride, based on its chemical composition, purity, and classification principles under Chapter 29 of the Customs Tariff. The contention is that classifying it under CTH 2309 9020 (animal feed) would be incorrect, as it would fail to consider the product's actual chemical nature. i. Chemical Nature vs. End-Use: The classification of a product under the Customs Tariff is primarily based on its chemical nature and composition, rather than its intended use. The applicant emphasizes that although Choline Chloride is used as a feed supplement, it remains a pure chemical compound and should, therefore, be classified under Chapter 29 rather than as a compound animal feed under Chapter 23. ii. Significance of Chapter 29: Chapter 29 specifically deals with separate chemically defined organic compounds, which aligns with the nature of Choline Chloride. As a pure chemical, it should be classified under CTH 2923 1000, which pertains to alcohols and their de....
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....ixed compounds. Since Choline Chloride remains a standalone chemical substance, it should not be classified under CTH 2309 9020. iii. HSN Guidelines: The HSN Explanatory Notes for Heading 2309 confirm that products classified under this heading are compound animal feeds, consisting of mixed or blended nutrients. Pure chemicals are explicitly excluded, further reinforcing that Choline Chloride should be classified under CTH 2923 1000. D. Distinction Between Pure Chemicals and Animal Feed Mixtures i. Chapter 23 Covers Compound Feeds: CTH 2309 9020 applies to compound animal feeds, premixes, and feed preparations containing multiple ingredients. Choline Chloride, being a single chemically defined compound, is not a mixture of nutrients and does not fit within this category. ii. Chapter 29 Covers Defined Chemical Compounds: The chemical integrity of Choline Chloride remains intact regardless of its use in animal feed. The Tribunal in Tetragon Chemie Pvt. Ltd. held that unless mixed with other substances, a pure chemical should not be classified under Chapter 23. E. Duty Structure Comparison: CTH 2309 9020 vs. CTH 2923 1000 i. CTH 23....
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....2.2025, 21.03.2025 and 09.04.2025. However, no reply, till date, has been received in this office. 5. Rebuttal by the Applicant 5.1 The comments received from the NS-I Commissionerate, JNCH were forwarded to the Applicant for Rebuttal. The applicant in its reply dated 18.03.2025 submitted that the application is very consistent with the HSN explanatory notes, Chapter notes, case laws, CBIC Instruction No. 34/2022 dated 30.12.2022 - Instruction regarding the Consolidated list of animal feed additives/ premix/ supplements for import into India wherein it is mentioned that import of animal feed additives/ premix/ supplements will be regulated strictly and the classification of the subject goods determined in the Notification in Case No. ADD-OI-12/2019 dated 25.08.2020 issued vide F. No. 6/18/2019-DGTR regarding Final Findings in the anti-dumping investigation concerning imports of "Choline Chloride in all forms" originating in or exported from China PR, Malaysia, and Vietnam. 5.2 The Applicant further submitted that the impugned product is commonly known in the trade parlance as products for specific use in animal feeding i.e. dietary supplement to animal feed. The manufactur....
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....the personal hearing as well as the reply received from the jurisdictional Commissionerate and its rebuttal by the applicant. Therefore, I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework. 7.2 The applicant has sought advance ruling in respect of the following questions: Question: Whether the goods sought to be imported, viz. 'Choline Chloride 60% Corn Cob (Feed Grade) (Powder Form in 25 kg Bags)' will be classified under Customs Tariff Item (CTI) 23099020 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975)? 7.3 At the outset, I find that the issue raised at the Sr. No. 08 in the CAAR-1 form is squarely covered under Section 28H(2) of the Customs Act, 1962 being a matter related to the classification of goods i.e. Choline Chloride 60% on Corn Cob. 7.4 The applicant submitted that the product i.e. Choline Chloride 60% on Corn Cob is commonly used as a supplement in animal feed, particularly for poultry, swine, and ruminants. It is essential for proper liver function, fat metabolism, and muscle development. 7.5 Before deciding on the issue, let me deliberate on the legal frame....
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....animal and poultry feed to promote growth, enhance liver function, support fat metabolism, improve immunity, and prevent conditions like fatty liver syndrome. It is used in compound feed and premixes for poultry, swine, cattle, and aquaculture. I further find that the presence of corn cob powder renders the product dust-free, flowable, and easier to mix into feed formulations and makes the product suitable for bulk handling, packaging, and storage in agricultural settings. This product is exclusively used in the animal feed industry, particularly for poultry, swine, ruminants, and aquaculture. 7.8 After understanding the product, I come to the question of classification of product i.e. Choline Chloride 60% on Corn Cob. I observe that for a product to be able to classify under Chapter 29 "Organic Chemicals", The product needs to satisfy the criterion laid down in Note 1 of the Chapter. The same is reproduced below for ease of reference: "1. Except where the context otherwise requires, the headings of this Chapter apply only to : (a) separate chemically defined organic compounds, whether or not containing impurities; (b) mixtures of two or more isomers o....
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....anatory Note to heading 29.25). The separate chemically defined compounds of this Chapter may contain impurities (Note 1 (a)). An exception to this rule is created by the wording of heading 29.40 which, with regard to sugars, restricts the scope of the heading to chemically pure sugars." 7.8.2 From the above, I gather that only pure chemically defined compounds are to be classified under this chapter. Further, I find that addition of any other substance deliberately into a pure chemically defined compound would render the same out of the purview of this chapter. In the instant case, Choline chloride liquid is sprayed on Corn Cob Powder deliberately with a view to make it suitable as Animal Feed. Since the addition of Corn Cob Powder as an inert carrier renders the product suitable for a specific use i.e. as Animal Feed, the same gets excluded from the purview of the Chapter 29 as it fails to satisfy the criterion laid down in the Note 1 to the Chapter 29. Therefore, I find that the product cannot be classified under Chapter 29 and more specifically under Heading 2923 as it is not a separate chemically defined compound. 7.9 I have further gone through the relevant Sec....
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....es) 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-oxidants, etc. (3) Those which serve as carriers and which may consist either of one or more organic nutritive substances (manioc or soya flour or meal, middlings, yeast, various residues of the food industries, etc.) or of inorganic substances (e.g., magnesite, chalk, kaolin, salt, phosphates). The concentration of the substances described in (1) above and the nature of the carrier are determined so as to ensure, in particular, homogeneous dispersion and mixing of these substances in the compound feeds to which the preparations are added." 7.9.4 Further, I find that although the exclusions mentioned in HSN explanatory notes ment....
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.... 7.13 Further, I have also gone through the Final Findings of the Directorate General of Trade Remedies issued vide Notification dated 25.08.2020 under Case No. ADD-OI-12/2019 in Anti- dumping investigation concerning imports of "Choline Chloride in all forms" originating in or exported from China PR, Malaysia and Vietnam. Para 12 of above referred Final Findings observes that: "As regards customs classification, the Authority notes that dry Choline Chloride is under Chapter 23 only because it is an animal compound feed, and considering the application, it is classifiable under Chapter 23. The customs classification is essentially for the facilitation of imports and the mere fact that liquid Choline Chloride is classifiable under 29231000 while dry Choline Chloride is classifiable under 23099010 does not render them dislike articles for the present purposes. Both the customs classifications were considered in the previous two investigations as well. " 7.14 From the above, I observe that a distinction has been made by the authority while discussing the Customs Classification between the dry Choline Chloride and liquid Choline Chloride on the basis of their use as an a....