TaxTMI 
TaxTMI 
2026 (1) TMI 797
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....ods under 23099090 schedule to the Custom Tariff Act, 1975. 1.1 APPLICANT'S ELIGIBLITY FOR ADVANCE RULING AND WHY IT IS MAINTAINABLE BEFORE THE HON'BLE CAAR S. No Requirement under the Customs Act How it is met in the present case 1. Section 28E(b) defining advance ruling The Applicant in the present case is seeking a written decision on the questions as referred to in Section 28H of the Customs Act, 1962, in terms of Section 28E(b). 2. Section 28E(b) read with Section 28H enabling the nature of questions for which answer is sought The present application is being made in prescribed format and the question on which advance ruling is sought is with respect to the classification of "Danisco Phytase" under the First Schedule to the Customs Tariff Act, 1975. 3. Section 28E(c) defining applicant The applicant holds a valid IEC Code granted under Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992). 4. Section 281(2) (proviso) baring in certain cases application is not maintainable The question of classification of "Danisco Phytase" is not pending in the Applicant's case before any officer of custom....
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....own of 'Phytate', thereby releasing phosphorous and other nutrients which were bound to Phytate, in order to enable and enhance the poultry animals' absorption of these vital nutrients. Phytase, in granular form, is administered to these animals, mixed with their feed. This Phytase, which is added to the feed of poultry animals including swine and chicken, is not a pure enzyme, but is the preparation of an active ingredient i.e. 'Pure Phytase Enzyme' with other chemicals/elements which are detailed hereinbelow: 1.9 The said preparation includes various non-active ingredients which act as stabilizers, carriers, and granulating agents. These are necessary to be mixed with 'Phytase' enzyme for enabling it to be used as a pre-mix for final use in the poultry animals' feed. the Phytase enzyme is only to be used at a rate of 0.025-0.4 kg/tonne (0.0025-0.04%) of the finished feed. Administration of the enzyme in such miniscule quantity poses many issues including the possibility of not reaching the desired place inside the animals' body, thus, ingredients that act as carriers and stabilizers are required to be prepared/mixed with the enzymes so as to....
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....kaged and proposed to be sold to foodstuff manufacturers, traders and poultry farmers. The subject product is designed for exclusive use in animal feed 1.12 The Ld. Customs Authority for Advance Ruling, New Delhi (hereinafter referred to as "Ld. CAAR") is apprised of the fact that the subject product has been specifically developed and is actually to be used as a premix in the feed of poultry animals. It is further highlighted that the subject product has no use other than being used as an additive in the feed of poultry animals. 1.13 In this regard, your attention is invited to the paper titled "Exogenous Enzymes as Zootechnical Additives in Animal Feed: A Review" by Brianda Susana Velaquez-DeLucio and others, dated 15.07.2021, published in Catalysts, MDPI Basel, Switzerland. In the aforementioned research paper, at Table 1 on Page 3, it has been specifically mentioned that the enzyme Phytase is mainly used as an animal feed additive. Further, in Para 3.1 of the research paper, it has been mentioned that phytase enzyme is most commonly used in animal feed supplementation. The relevant portion of table of the research paper has been extracted as follows: "Table 1-....
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.... herein has been granted a valid Importer-Exporter Code Number (IEC) under Section 7 of the Foreign Trade (Development and Regulation) Act, 1992. The same is 0599001780. iv) Clause (b) of Section 28E of the Customs Act defines 'advance ruling' as: (b) "advance ruling" means a written decision on any of the questions referred to in section 28H raised by the applicant in his application in respect of any goods prior to its importation or exportation; v) The questions on which an application for an advance ruling can be made have been provided under Section 28H of the Customs Act. As per the said Section 28H (2) of the Customs Act, an applicant may make an application for advance ruling in respect of questions relating to: (a) classification of goods under the Customs Tariff Act, 1975; (b) applicability of a notification issued under sub-section (1) of section 25, having a bearing on the rate of duty; (c) the principles to be adopted for the purposes of determination of value of the goods under the provisions of this Act. (d) applicability of notifications issued in respect of tax or duties under this Act or the Customs Tar....
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.... out in Section 281 are satisfied as: a. The question raised in the present application regarding the classification of the subject product is not pending in the applicant's own case before any officer of customs, the Appellate Tribunal, or any Court; b. The question raised in the present application regarding the classification of the subject product is not a matter already decided by the Appellate Tribunal or any Court. 1.22 Therefore, it flows that in the present case, the Applicant satisfies all the criteria required for the filing of the application for advance ruling, namely: (a) The Applicant has been granted a valid Importer-Exporter Code Number (IEC) under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; (b) The Applicant is filing the Application in respect of subject product prior to its importation into India; (c) The application for advance ruling is in relation to clause (a) of Section 28H (2) of the Customs Act, 1962; and (d) The application is not barred under Section 281 of the Customs Act, 1962. 1.23 Thus, the present application must be allowed to be proceeded with. CLASSIFIC....
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.... 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". 1.30 Chapter Note to Chapter 23, gives an inclusive and wide scope to CTH 2309 owing to the use of the expression "includes". The scope of the expression "includes" makes CTH 2309 not limited only to the products obtained by processing vegetable or animal materials, but is inclusive enough to include products obtained by processing like substances including micro-organisms/molds, i.e., fungi (Trichoderma Reesei) in the present case. 1.31 Reliance is placed on the judgement of the Hon'ble CESTAT, New Delhi in the case of M/s Tetragon Chemie (P) Ltd. vs. Collector of Central Excise, Bangalore 2001(138) ELT 414 (Tri. - LB) affirmed at 2001 (132) ELT 525 SC [Para 83] to submit that the Chapter Note referred to hereinabove cannot have a restrictive meaning. The relied upon case law was maintained by the Hon'ble Supreme Court in the case of Ranbaxy Laboratories Ltd. v. Collector - 2003 (152) E.L.T. A92 (S.C.)] . The relevant excerpt of the cited ....
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....farmers for the product to be sold by them to poultry farms in the following models: i. Either the animal-feed manufacturers themselves mix the subject product in animal feeds and sell the final product to poultry farmers; or ii. The animal-feed traders sell the pre-mix packages of the subject product to poultry farmers along with the regular food products, to be added to regular feed by the farmers themselves; or iii. The poultry animal farmers directly purchase the subject product and mix it in the regular feed of the animals. In either of the scenarios, the subject product is finally used as an additive in the feed of the poultry animals. 1.36 The HSN Explanatory Notes, published by the World Customs Organization, aids in the interpretation of the Headings of the Customs Tariff. Therefore, the HSN Explanatory Notes are a safe guide to determine the scope of Heading 23.09. Relevant extracts of the same have been reproduced below: 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 ....
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....g process obtained by simply drying the mass, i.e. the entire contents of the fermentation vessel (essentially mycelium, the culture medium and the antibiotic). The resulting dry substance, whether or not standardised by adding organic or inorganic substances, has an antibiotic content ranging generally between 8% and 16% and is used as basic material in preparing, in particular, "premixes". The preparations of this group should not, however, be confused with certain preparations for veterinary uses. The latter are generally identifiable by the medicinal nature and much higher concentration of the active substance and are often put up in a different way. 1.37 From a perusal of the above-extracted Explanatory Notes to CTH 2309, the following conditions appear for the subject product to satisfy, so as to be able to be classified under CTH 2309: a. The subject product must be a 'preparation'; b. The subject product must be known as a 'pre-mix' in trade parlance; c. The subject product must be a compound composition, consisting of a number of substances; d. The subject product must improve digestion in the poultry animals ....
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....xed herewith as Annexure - F. Thus, the subject product is preparations. ii. The subject product is known as a 'pre-mix' in trade parlance The subject product is sold to animal feed manufacturers, traders and poultry farmers as a pre-mix. The subject product is sold and recognised as a 'pre-mix'. Reference is made to para 2.10 above and to the Product Label and Sales Invoices of the subject product (annexed herewith as Annexure-G), wherein, the subject product has been purchased by various animal-feed manufacturers /traders / farmers. Reliance is further placed upon Board's Circular No. 34/2022-Cus. (Instruction) dated 30.12.2022 which covers 'Phytase' under the 'List of recommended animal feed additives, premix and feed supplements for Import into India.' iii. The subject product must be a compound composition, consisting of a number of substances; Reliance is placed on the Product Description Sheet (annexed herewith as Annexure-E) and Material Safety Datasheet of the subject product, enclosed herewith as Annexure - F, both of which contain a list of ingredients of the subject product. From a perusal of the same, it is apparent....
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....ote to Chapter 23 and of the description of CTH 2309. Accordingly, on the basis of GRI 1, the subject product is correctly classifiable under CTH 2309. The subject product is also in compliance with the conditions of CTH 2309 as enunciated under the HSN EN to CTH 2309 which have been held to be a safe guide for determination of classification of a product under the Customs Tariff Act. Accordingly, the subject product merits classification under CTH 2309. 1.40 It is submitted that Heading 23.09 is an end-use base heading and that the subject product, in its 'as-imported' condition can only be used and is actually used in animal feed as pre-mixes, more specifically in the feed of poultry animals including chicken and swine. 1.41 In the present case, DANISCO PHYTASE, i.e., the subject product has a very specific use, i.e., to be used in animal feeding by mixing them into the animal feed in the proportion as prescribed. It does not have any other use. 1.42 It is submitted that the subject products are exclusively used for animal nutrition. They are neither used in the manufacture of pharmaceutical products nor do they have any other use. This is supported by the End-us....
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....lement for animals and not capable of any general use." iii. Circular No. 188/22/96-CX, dated 26-3-1996 issued by Central Board of Indirect Taxes and Customs. Relevant para is extracted below: "5. Heading 23.02 of Central Excise Tariff i.e. "preparations of a kind used in animal feeding including dog and cat food" corresponds to Heading 23.09 "Preparations of a kind used in animal feeding" of the HSN. As per Explanatory notes under Heading 23.09 of the HSN, the said heading covers complete animal feeds, supplementary animal feeds 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 "premixes". These preparations are compound compositions consisting of a number of substances - each type of these substances being present in the 'premix' in varying proportions to serve a particular purpose. The explanatory notes under Heading 23.09 of HSN (pp. 177-178) further indicate that pre-mixes contain, in addition to the active substances (vitamins, amino-acids, anti-biotics, coccidiostats etc.) and stabilizers, anti-oxidants etc., certain organic....
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....the terms of sub-headings. In view of the above, reference must be made to the description mentioned at sub-heading level. 1.49 It is also pertinent to mention that, descriptions of the goods provided under "-" (single dash) are first to be considered for sub-classification under a heading first, before proceeding to further classify under "- - " (double dash). Articles whose description are preceded by a " --- " (triple dash) or " ---- " (quadruple dash) are sub-classifications of the immediately preceding single dash or double dash, as the case may be. 1.50 The classification of the subject product must be determined at the single-dash level. In this regard, the relevant single-dash entries are extracted below: CTH/CTSH/CTI Description 2309 Preparations of a kind used in animal feeding 2309 10 00 - Dog or cat food, put up for retail sale 2309 90 - Other: 1.51 It is apparent that CTH 2309 has been further categorized into 2 single-dash entries. The subject product evidently falls under the second category, i.e., CTSH 2309 90 covering "preparations of a kind used in animal feeding other than dog or cat food, put up for retail sale....
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.... supplements are preparations meriting classification under Heading 23.09 specifically under Tariff Item 2309 9090 as 'Preparations of a kind used in animal feeding; Other'. 2. Comments of The Port Commissionerate :- 2.1 The comments in respect of this application have been received from the concerned port Commissionerate i.e. Office of the Principal Commissioner of Customs, Air cargo complex(Import), New Custom House, New Delhi-110037 vide letter F.No. Cus/AG/Misc/1469/2025-GR 1/2 O/o Pr Commr-CUS-ACC(I)-Delhi dated 12.09.2025 2.2 The point wise comments to para 3 (i) to (v) of the aforementioned letter issued by the CAAR. New Delhi is as under: 3(i) Eligibility of the applicant, in terms of Section 28E(c) of the Customs Act, 1962 to seek such advance ruling: * Yes, M/s Danisco India Pvt Ltd. is a valid applicant within the meaning of Section 28E(c) (i) of the Customs Act, 1962, having IEC Code 0599001780. 3(ii) Applicability of proviso (1) of section 28-1 (2) of the Customs Act, 1962 regarding the question raised in the application: * As per records available in the Section, no such case of the applicant is pending with any off....
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....al rennet 10% - 3507.10 19 - Other 10% - Other: 3507 10 91 - Animal rennet 10% - 3507 10 99 - Other 10% - 350790 - Other: 3507 90 10 - Industrial enzymes (textile assistant) 10% - 3507 90 20 Pancretin pure (excluding medicament) 10% - 3507 90 30 - Pepsin (excluding medicament) 10% - 3507 90 40 - Pectin esterases pure 10% - 3507 90 50 - Pectolytic enzyme (pectimase) 10% - --- Other enzymes of microbial origin: 3507 90 61 - Streptokinase 10% - 3507 90.62 - Amylases enzymes 10% - 3507 90 69 Other 10% - --- Enzymes for pharmaceutical use, other than streptokinase: 3507 90 71 Papain, pure, of pharmaceutical grade 10% - 3507.90 79 Other 10% - - Other: 3507 90 91 - Enzymatic preparations containing food stuffs 10% - * The applicable rate of IGST under CTI 35079091 is 18% under SI. No. 70 of Schedule-III of IGST Notification no. 01/2017 dated 01.07.2017. ....
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....ning food stuffs". The relevant Tariff Entries under CTH 3507 are extracted hereunder for ready reference: Tariff Item Description of goods (1) (2) 3507 Enzymes; prepared enzymes not elsewhere specified or included 3507 10 - Rennet and concentrates thereof: 3507 90 - Other: -- Other 3507 90 91 ---- Enzymatic preparations containing food stuffs 3507 90 99 ---- Other 4.5 The Ld. DC, in this regard relies upon the Applicant's submission in the AAR that the subject product is used as an additive enzyme in animal food preparations, to suggest that the subject product merits classification under CTI 3507 90 91 as "Enzymatic preparations containing food stuffs". 4.6 It is submitted at the outset that the comments provided by the Ld. DC on the Applicant's AAR are incorrect as they are based on an erroneous understanding of the subject product and incorrect interpretation of the Tariff Act. Hence, the said comments are liable to be rejected. The subject product is correctly classifiable under CTH 2309 and not under CTH 3507. Detailed submissions with rebuttals to the....
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....s clear that headings read with relative section notes and chapter notes are of paramount importance to determine classification of goods. A.3 The Additional Notes to GRI define heading as follows: "(1) (a) "heading", in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all sub-headings of tariff items the first four-digits of which correspond to that number;" A.4 Further, heading is denoted by single dash (-). As per General Explanatory Notes to GRI double dash ( -- ) is a sub-classification of single dash (-) and triple dash ( --- ), quadruple dash ( ---- ) is a sub-classification of immediately preceding single dash (-) or double dash ( -- ). Thus, only entries at same level are comparable. The relevant extract has been reproduced below: "Where in column (2) of this Schedule, the description of an article or group of articles under a heading is preceded by "-", the said article or group of articles shall be taken to be a sub-classification of the article or group of articles covered by the said heading. Where, however, the description of an article or group of articles is preceded by " -- ",....
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.... CTH 2309 is inapplicable, the Ld. DC cannot classify the subject product under CTH 3507 and specifically as an enzymatic preparation under CTI 3507 90 91. A.10 It is trite law that specific entry is to be preferred over a residuary entry. As submitted hereinabove, CTH 3507 is residuary in nature as it covers the enzymatic preparations which are not covered elsewhere. In this regard, reliance is placed upon the following judgements wherein specific entry has been preferred over the residuary entry: * Mauri Yeast India Pvt. Ltd. Vs. State of UP, [2008 (225) ELT 321 (S.C.)]; * Dunlop India Ltd. & Madras Rubber Factory Ltd. Vs. Union of India and Ors., [1983 (13) E.L.T. 1566 (S.C.)]; * CC (Import) Vs. Abbott Healthcare Pvt. Ltd., [2015 (2) TMI 740]. A.11 Reliance is also placed upon the decision of the Hon'ble CESTAT, Chennai in the case of Commissioner of Customs, Chennai vs. Lalchand Bhimraj - 2007 (220) ELT 189 (Tri. Chennai) which specifically holds that a product, when specifically used in animal feeding is to be classified under CTH 2309. Applying the said principle to the present facts, the Applicant submits that the subject product should b....
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....ified under CTH 3507 at the four-digit level itself. A.15 To further buttress its submissions, the Applicant also places reliance on the Explanatory Notes to CTH 3507. B. THE EXPLANATORY NOTES TO CTH 3507 ALSO STATE THAT ENZYMATIC PREPARATIONS COVERED ELSEWHERE CANNOT FALL UNDER THIS HEADING. B.1 The HSN Explanatory Notes to CTH 3507 are extracted hereunder for ready reference: "This heading includes : (A) "Pure" (isolated) enzymes. These are generally in crystalline form, and are mainly intended for use in medicine or in scientific research. They are not as important in international trade as enzymatic concentrates and prepared enzymes. (B) Enzymatic concentrates. These concentrates are generally obtained from either aqueous or solvent extracts of animal organs, of plants, of micro-organisms or of culture-broths (the latter derived from bacteria, moulds, etc.). These products, which may contain several enzymes in various proportions, can be standardised or stabilised. It should be noted that certain standardising or stabilising agents may already exist in the concentrates in variable quantities, deriving either from the fermentation ....
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....trate'. After the enzymatic concentrate is obtained, it is further diluted with various stabilisers and carriers including Calcium Carbonate, Starch, Sucrose, and Talc. Thereafter, granulating agents are added to make the product suitable for addition in feed. B.7 It is submitted that the subject product is different from enzymatic concentrates which are obtained by adding stabilisers and granulating agents and such stabilisers and granulating agents may continue to be present in such enzymatic concentrate. In applicant's case, the stabilisers, carriers and granulating agents etc. are added after obtaining the concentrate and therefore, it is no longer a concentrate but becomes a preparation (mixture) which is 'of a kind' which is used in animal feeding only. Prepared enzymes not covered elsewhere are included under CTH 3507. B.8 Having established that the product in question is a prepared enzyme, we will now discuss whether it is covered under CTH 3507. B.9 CTH 3507 covers 'prepared enzymes not elsewhere specified or included'. As per the HSN Explanatory Notes, this category covers the following two types of products: a. Products which....
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....the product Danisco Phytase is an animal feed additive specifically developed to aid and enhance the digestibility of phytin-bound phosphorous, calcium, energy and amino acids in pig and poultry diets. Phytase, in granular form, is administered to poultry animals, mixed with their feed. Phytase, is not a pure enzyme, but is the preparation of an active ingredient i.e. 'Pure Phytase Enzyme' with other chemicals/elements. The said preparation includes various non-active ingredients which act as stabilizers, carriers, and granulating agents 5.3 They submitted a detailed composition structure of the product, as tabulated below: Name of the ingredient Weight - % Function EC No. (EU Index No.) Calcium Carbonate [471-34-1] 30-60 Carrier 207 - 439 - 9 Phytase [9001-89-2] 1-15 Active Ingredient 232 -630 - 9 Starch [9005-25-8] 0-10 Stabilizer 232 -679- 6 Talc [14807 - 96-6] 0-10 Carrier 238 - 877 - 9 Sucrose [57-50-1] 0-5 Stabilizer 200 - 334 - 9 5.4 The manufacturing flow placed on record is as follows: Issue of classification: 5.5 The applicant has sought an advance ruling on the classification of "....
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....ases pure 3507 90 50 --- Pectolytic enzyme (pectimase) --- Other enzymes of microbial origin: Streptokinase: 3507 90 61 ---- Streptokinase 3507 90 62 ---- Amylases enzymes 3507 90 69 ---- Other --- Enzymes for pharmaceutical use, other than streptokinase : 3507 90 71 ---- Papain, pure, of pharmaceutical grade 3507 90 79 ---- Other --- Other: 3507 90 91 -- Enzymatic preparations containing food stuffs 3507 90 99 -- -- Other 5.9 On going through the submissions from both sides, I find that to decide the classification issue, these two entries require to be examined :- * Heading 2309 - preparations of a kind used in animal feeding * Heading 3507- enzymes; prepared enzymes not elsewhere specified or included 5.9.1 I find that the issue for consideration is the proper classification of the product under import, namely an animal feed additive, presented in granular form, including various non-active ingredients which act as stabilizers, carriers, and granulating agents and is intended for sale to foodstuff manufacturers, traders and poultry fa....
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.... (ii) Enzymatic concentrates and (iii) Prepared enzymes not elsewhere specified or included. The jurisdictional Commissionerate has urged that the product's fundamental nature as a prepared enzyme, its composition dominated by an active enzyme and its manufacturing process, make it classifiable under heading 3507 as a prepared enzyme. Whereas, the applicant has taken the plea that the subject product is a preparation, as it is a mixture of an active ingredient i.e. Phytase Enzyme with Calcium Carbonate, Talc and Starch, Sucrose which act as carriers and stabilizers. It is a preparation used in animal feeding and hence is classifiable under CTH 2309. I note that to be a prepared enzyme under 3507, the product must not be elsewhere specified or included. In the present case, the active ingredient present in the subject goods is in the range of 1-15%. The product apart from enzymes also includes carriers and stabilizers. The inclusion of such additives makes the impugned products suitable for specific use. While classifying, the product as a whole needs to be considered rather than only the active ingredient present in the specific product. The product is specificall....
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....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, antioxidants, 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. 5.11.4 I find that the subject goods are a combination of active ingredients and inactive ingredients such as carriers and stabilizers. As per HSN Explanatory....
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....dog and cat food" corresponds to Heading 23.09 "Preparations of a kind used in animal feeding" of the HSN. As per Explanatory notes under Heading 23.09 of the HSN, the said heading covers complete animal feeds, supplementary animal feeds 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 "premixes". These preparations are compound compositions consisting of a number of substances - each type of these substances being present in the 'premix' in varying proportions to serve a particular purpose. The explanatory notes under Heading 23.09 of HSN (pp. 177-178) further indicate that pre-mixes contain, in addition to the active substances (vitamins, amino-acids, anti-biotics, coccidiostats etc.) and stabilizers, anti-oxidants etc., certain organic or in-organic 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. In this view of the matter, it would appear that preparations containing the....
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....ow 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 and the products in question were animal feed. 5.11.10 As per the HSN explanatory note, the heading 2309 excludes protein substances of Chapter 35. However, the impugned product contains 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 and carriers. Therefore, the product does not appear to be hit by the above-mentioned exclusion clause. 5.11.11 The applicant submitted that the product is commonly known in the trade as products for specific use in animal feeding. The safety data sheet provided by the manufacturers mentions the use of these products as animal feed. The end-use declaration of the Applicant's supplier declares that the said enzyme in dry form is intended for use as a feed additive in animal feed only and not for use in any other industry. Therefore, on the basis of trade parlance and the declaration of the supplier, it ....