TaxTMI 
TaxTMI 
2024 (10) TMI 1789
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....try diets. It is a multi-strain probiotic which helps to improve litter quality leading to improved performance and reduced environmental impact. The product brochure is enclosed as Exhibit-B. The process of manufacture of Enviva Provalen is enclosed herewith as Exhibit-C. Composition of Enviva Provalen A.4. The composition of Enviva Provalen is as follows: Sr No. Ingredients Quantum (weight concentration) Role/purpose of the ingredient 1 Bacillus amyloliquefaciens fermentation product 01-05% Active strain - Helps in pathogenic bacterial growth and enhancing nutrient assimilation 2 Bacillus licheniformis fermentation product 01-02% Active strain - Improves growth performance, diarrhoea incidence and regulates the gut microflora composition in broilers and weaning piglets 3 Calcium carbonate 90-99% Carrier 4 Mineral oil 0-1% Preservative 5 Sodium aluminosilicate 0-1% Preservative The technical datasheet of Enviva Provalen is enclosed as Exhibit-D. Benefits of using Enviva Provalen A.5. Enviva Provalen offers the following benefits: i. Improves litter quality by reducing undigested nutrien....
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....8H raised by the applicant in his application in respect of any goods prior to its importation or exportation; 1.5 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; 1.6 The present application is being made by the Applicant to confirm classification of Enviva. 1.7 Therefore, it flows that in the present case, the Applicant is satisfying the following conditions required for filing the application for advance ruling, namely: a. have been granted a valid Importer-Exporter Code Number (IEC) under section 7 of the Foreign Trade (Development and Regulation) Act, 1992; b. Application for advance ruling is in relation to clause (a) of Section 28H (2) of the Customs Act, 1962. Non-Applicability of Bar under Section 28I 1.8 Section 28I of the Customs Act, 1962 is set out below: "SECTION 28-I. Procedure on receipt of application. - (1) On receipt of an applic....
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....SSIFICATION OF ENVIVAR PROVALEN PLUS 201 GT (Submission by the applicant) 2.1 The Tariff is aligned, up to the 6-digit level, with the Harmonized System of Nomenclature ("HSN") issued by the World Customs Organization ('WCO'). It has been held by the Hon'ble Supreme Court in the case of Collector of Customs, Bombay Vs. Business Forms - 2002 (142) ELT 18 that the HSN Explanatory Notes aid in the interpretation of the Headings of the Tariff and may be used as a safe guide for the same. 2.2 The classification of the goods imported into India is to be determined based on the General Rules of Interpretation (hereinafter referred to as the "GRI") set out in the Tariff. As per Rule 1 of the GRI, classification of the imported products 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 remaining Rules of the GRI. 2.3 The product in question i.e., Enviva Provalen is a preparation used in animal feed. Such products i.e. preparations for use in animal feeding, are specifically covered under Heading 23.09. Thus, this Heading may be examined at t....
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.... (3) for use in making complete or supplementary feeds. The heading includes products of a kind used in animal feeding, obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristics of the original material, for example, in the case of products obtained from vegetable materials, those which have been treated to such an extent that the characteristic cellular structure of the original vegetable material is no longer recognisable under a microscope. (I) SWEETENDED FORAGE **** (II) OTHER PREPARATIONS (A) PREPARATIONS DESIGNED TO PROVIDE THE ANIMAL WITH ALL THE NUTRIENT ELEMENTS REQUIRED TO ENSURE A RATIONALAND BALANCED DAILY DIET (COMPLETE FEEDS) The characteristic feature of these preparations is that they contain products from each of the three groups of nutrients described below: (1) "Energy" nutrients, consisting of high-carbohydrate (high-calorie) substances such as starch, sugar, cellulose, and fats, which are "burned up" by the animal organism to produce the energy necessary for life and to attain the breeders' aims. Examples of such substances incl....
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....nerally 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 such as vitamins or provitamins, amino- acids, antibiotics, coccidiostats, trace elements, emulsifiers, flavourings, and appetisers, etc. (2) Those designed to preserve the feeding stuffs (particularly the fatly components) until consumption by the animal such as 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, middling's, 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....
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.... Heading 3002.The relevant extract from Heading 3002 is reproduced below: Tariff Item Description of goods 3002 HUMAN BLOOD; ANIMAL BLOOD PREPARED FOR THERAPEUTIC, PROPHYLACTIC OR DIAGNOSTIC USES; ANTISERA, OTHER BLOOD FRACTIONS, AND IMMUNOLOGICAL PRODUCTS, WHETHER OR NOT MODIFIED OR OBTAINED BY MEANS OF BIOTECHNOLOGICAL PROCESSES; VACCINES, TOXINS, CULTURES OF MICRO- ORGANISMS (EXCLUDING YEASTS) AND OTHER SIMILAR PRODUCTS; CELL CULTURES, WHETHER OR NOT MODIFIED - Antisera, other blood fractions and immunological products, whether or not modified or obtained by biotechnological processes: 300212 -- Antisera and other blood fractions **** - Vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products: **** --- Mixed vaccines for: **** 300249 -- Other 30024910 --- Cultures of micro-organisms (excluding yeast) 2.15 The relevant part of the HSN explanatory notes to the Heading 3002 is reproduced below for ready reference: 'This heading covers: (A) .... (B) ... (C) ... (D) Vaccines, toxins, cultures ....
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....derstanding: Not Applicable. 4. COMMENTS OF THE COMMISSIONERATE 4.1 In this regard comments has been sought, the same are produced pointwise as below: Point 3 i) Eligibility of the applicant, in terms of section 28-E (c) of the Customs act, 1962 to seek such advance ruling. -In this regard it is submitted that the importer is holding a valid Importer Exporter code (0599001780) Point 3 ii) Applicability of proviso (1) of section 28-I (2) of the Customs Act, 1962 regarding the question raised in the application. As per available records, SCN No. 396/2023-24/Commr/NSI/CAC/JNCH dated 22.05.2023 was issued by the Commissioner of Customs, NS-I, JNCH, to M/s Danisco India Pvt. Ltd., wherein the importer was asked to show cause as to why the import of item Enviva Pro 201 BA under CTH 30029030 be rejected and re-classified under CTH 23099000. It has been checked with the concerned adjudication cell and found that above mentioned SCN has not been adjudicated yet. Point 3 iii) Specify whether the claim of the applicant regarding the nature of activity, i.e. it is ongoing/ proposed is correct .- No Comments. Point 3 iv) Comments on th....
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.... classifiable under Heading 2309. However, regarding maintainability of the application, the Comments seem to indicate that the application is not maintainable as SCN has earlier been issued for the product Enviva Pro 201BA. A.4 It is submitted that the comments provided do not act as a bar to the present application, and in fact support the Applicant's stand for classification under Heading 2309 for the following reasons: a. SCN dated 22.05.2023 (Enclosed herewith as Annexure-1) was issued disputing the classification numerous products including of the product 'Enviva Pro 201BA'. The SCN was not issued regarding Enviva Provalen Plus. b. SCN issued contended that Enviva Pro 201BA is rightly classifiable under Heading 2309 and not under Heading 3002. Enviva Pro 201A and Enviva Provalen Plus are completely different products A .5 It is pertinent to note that the product covered by the SCN is completely different from the one covered in the present application. The difference is evident from the table below: Particulars Enviva Pro 201BA Enviva Provalen Plus Active strain/ ingredient 1. Dried Bacillus Amyloliquefaciens 1. Bacillu....
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....oms or] Commissioner of Customs. (2) The Authority may, after examining the application and the records called for, by order, either allow or reject the application : Provided that the Authority shall not allow the application where the question raised in the application is - (a) already pending in the applicant's case before any officer of customs, the Appellate Tribunal or any Court; A.10 The question raised in present application is for classification of "Enviva Provalen Plus 201 GT", whereas the SCN is dealing with classification of the product "Enviva Pro 201BA", which is a altogether different product. Thus, the question raised now is definition not pending in Applicant's own case. Thus, the bar will not apply. Present classification A.11 The SCN dated 22.05.2023, was issued contending that Enviva Pro 201BA is classifiable under Heading 2309 and not under Heading 3002. In this regard, it is also submitted that consequent to such SCN disputing the classification of the product Enviva Pro 201BA, the Applicant had started importing the same by adopting classification under Heading 2309. The illustrative copy of Bill of Entry for the pr....
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....References ASPERGILLUS oryzae - - Daskiran et al., 2012; Shim et al., 2012 niger - - Seo et al., 2010 BACILLUS amylolique- faciens CECT 5940 H57 Ecobiol Norel Animal Nutrition, Madrid, Spain Ortiz et al., 2013 toyonensis BCT-7112 Toyocerin Rubinum S.A., Barcelona, Spain Taras et al., 2005; Kantas et al., 2015 coagulans ATCC 7050 ZJU0616 - Adami and Cavazzoni, 1999; Hung et al., 2012 licheniformis DSM 5749 Microguard, PeterLab Holdings, Negeri Sembilan, Malaysia, LSP 122 Alpharma, Vega Baja, Puerto Rico, BioPlus 2B Chr Hansen, Horsholm, Denmark, Probios Chr Hansen, Hørsholm, Denmark, BioPlus YC Evonik Industries, Essen, Germany Alexopoulos et al., 2004a; Rahman et al., 2013 Probiotic application in different livestock production systems PROBIOTICS IN POULTRY NUTRITION Poultry are the cheapest source of animal protein, contributing significantly to supplying the growing demand for animal food products around the world (Farrell, 2013). The consumption and trade in poultry products is increasing rapidly as the human population increases, making it the second largest source of....
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.....6 Digestion and poultry litter management are connected as bird digestion affects the manure composition. The necessity of keeping litter dry is a critical part of overall management on every poultry farm. Litter conditions influence bird performance, which in turn affects profits of growers and integrators. Dry litter helps control ammonia levels, provides a healthy flock environment, and reduces condemnations due to hock and footpad burns and breast blisters. B.7 In order to summarize, proper management of poultry litter is necessary for the following reasons: a. Reduces ammonia production and bacterial challenge b. Footpad quality improvement c. Increases litter amendment activity d. Increases fuel efficiency during preheating and brooding e. Maintains healthy floor moisture f. Reduces health risk g. Compliance with nutrient management guidelines h. Reduces environmental impact Premix under Heading 2309 B.8 As elaborated in the present application dated 25.06.2024, Heading 2309 covers three kinds of preparations: i. complete feeds (Para (II) (A) of the Explanatory Notes) j. Feed s....
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....Thus, a preparation containing active ingredient for improving digestion, with a carrier is covered under Heading 2309. Why is premix necessary? B.11 As per Author D.V. Reddy in his book titled "Principles of Animal Nutrition and Feed Technology", micro-ingredients i.e. nutritional adducts, are added to feed at very low levels, and the dispersion of such low concentrations of active ingredients poses a challenge to the manufacturers. The relevant portion of the book is extracted below: Microingredient Premixing Microingredients Microingredients are nutritional adducts or drugs that are added to the feed at very low levels. Dispersion of such low concentrations of active ingredients presents a challenge to the manufacturers of the compound feed. This challenge can be met by the premix-the dilution of an active component with a suitable carrier. Physical characteristics of microingredients such as particle size, particle shape, specific weight, hygroscopicity, susceptibility to electrostatic charges, adhesiveness of the particles due to physical properties, such as rough surfaces or additions of adhesives such as oils influence mixing them wi....
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....iformly in feed. The mixing properties of the original ingredients are not drastically altered. Carrier is an edible material to which ingredients are added to facilitate uniform incorporation of the latter into feeds. The active principles are absorbed, impregnated or coated into the edible material in such a way as to physically carry the active ingredient. When a carrier is used with a micro ingredient the mixing properties are drastically altered. B.14 Reference is also made to the European Feed Manufacturers' Federation (FEFAC)'s article titled 'What is a premix?' which states that in order to ensure that micro- ingredients are mixed with macro-ingredients (in a homogeneous way), an intermediate dilution step is required via a 'premix'. The relevant portion is extracted below: What is a premix? Premixes are complex mixtures of vitamins, minerals, trace elements and other feed additives that are incorporated at levels between 0.2 and 0.5% in the compound feed. Adequate nutrition requires feed compositions consisting of macro ingredients and micro ingredients, sometimes incorporated at ppm levels (e.g. vitamins). To secure th....
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.... The product in question is a combination of active ingredients i.e., Bacillus amyloliquefaciens and Bacillus licheniformis with a carrier i.e., Calcium carbonate. This is evident from the very inception of the product, as the carriers are added in it for the specific end use in mind and for the reason of ensuring homogenous dispersion and mixing of the complete animal feeds. The benefits of the calcium carbonate as carriers is as follows: a. It is non-reactive and helps in uniformly distributing the additives b. Good absorbency, reducing dust and moisture c. Supports animal health d. Maintains the optimal pH of the feed B.17 A carrier is usually an inactive accessory substance (vehicle) or a substance (such as a catalyst) by whose agency some element or group is transferred from one compound to another. B.18 Therefore, the carrier absorbs or coats the micro-ingredient in order to physically carry the micro-ingredient, thereby facilitating the uniform mixing of the product into the feed. B.19 Thus, the preparing of "premix" is not just for convenience but is an essential necessity to ensure that the active strains/probiotics are uniforml....
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....mal feed supplements, it may be necessary to ensure that the said animal feed supplements are ordinarily or commonly known in the trade as products for a specific use in animal feeding." ii. Circular No. 80/54/2018/GST dated 31.12.2018 - The Board clarified that as per the Explanatory Notes, the Tariff Heading 2309, inter alia, covers vitamins and pro vitamins which improve digestion and more generally ensure that the animal makes good use of the feeds and safeguards its health. It has also been stated in the said Circular that to claim products as animal feed supplements, it is necessary to ensure that such products are commonly known to trade as products for a specific use in animal feeding. The relevant portion of the circular is reproduced herein as under - "5. Applicable GST rate on Animal Feed Supplements/feed additives from drugs: 5.1 Representations have been received seeking clarification regarding GST rate applicable on Animal Feed Supplements/feed additives from drugs. The dispute is in classification of Animal Feed Supplements/feed additives from drugs between tariff heading 2309 and 2936. 5.4 Thus while deciding the classification of....
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.... be satisfied - (a) The product is an animal feed/supplement/additive. (b) The products should be used in animal feeding purposes. (c) It is known in the trade as products for use in animal feeding. C.3 The product in question satisfy all the above conditions and the same is also evident from the composition of the same. Therefore, the product is rightly classifiable under Heading 2309. 7. I have gone through the submissions made in detail during the filing of the application, and also during the hearing and as additional inputs after the hearing, the comments of the Port Commissionerate and proceed to examine the details and issue the Ruling accordingly. 7.1 Enviva(r) Provalen Plus 201 GT is a probiotic feed additive for poultry diets. It is a multi- strain probiotic which helps to improve litter quality leading to improved performance and reduced environmental impact. The composition of Enviva Provalen is as follows: Sr No. Ingredients Quantum (weight concentration) Role/purpose of the ingredient 1 Bacillus amyloliquefaciens fermentation product 01-05% Active strain - Helps in pathogenic bacterial enhancing nutrient assi....
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....ector of Customs, Bombay Vs. Business Forms - 2002 (142) ELT 18 that the HSN Explanatory Notes aid in the interpretation of the Headings of the Tariff and may be used as a safe guide for the same. The classification of the goods imported into India is to be determined based on the General Rules of Interpretation (hereinafter referred to as the "GRI") set out in the Tariff. As per Rule 1 of the GRI, classification of the imported products 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 remaining Rules of the GRI. 7.6 The product in question i.e., Enviva Provalen Plus 201 GT is a preparation used in animal feed. Such products are specifically covered under Heading 23.09. Thus, this Heading may be examined at the outset. Classification under Heading 2309 The relevant extract of Heading 2309 is extracted hereunder: Tariff Item Description of goods 2309 PREPARATIONS OF A KIND USED IN ANIMAL FEEDING 23091000 - Dog or cat food, put up for retail sale: 230990 - Other: 23099010 --- Compound animal feed 23099020 --- ....
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....cteristic cellular structure of the original vegetable material is no longer recognisable under a microscope. XXXXXXXXXXXXXXXXX Provided they are of a kind used in animal feeding, this group also includes: (a) Preparations consisting of several mineral substances. (b) Preparations consisting of an active substance of the type described in (1) above with a carrier, for example products of the antibiotics manufacturing 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. ............... 7.11 As seen from the above explanatory no....
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.... These include ferments such as lactic ferments used in the preparation of milk derivatives (kephir, yogurt, lactic acid) and acetic ferments for making vinegar; moulds for the manufacture of penicillin and other anti-biotics; and cultures of micro-organisms for technical purposes (e.g. for aiding plant growth).' 7.15 Therefore, probiotics as 'cultures of microorganisms' are covered under Heading 3002. The HSN Explanatory Notes state clearly that cultures of microorganisms for technical uses, like aiding in plant growth, will be classified under Heading 30.02. By extension, the Enviva Provalen, which contains cultures of microorganism for aiding in animal growth, too is classifiable under Heading 3002 as cultures of microorganism. 7.16 However, Chapter Note 1 (a) to Chapter 30 states as follows: 1. This Chapter does not cover: (a) foods or beverages (such as dietetic, diabetic, or fortified foods, food supplements, tonic beverages, and mineral waters), other than nutritional preparations for intravenous administration (Section IV); 7.17 Thus, food supplements are excluded from Chapter 30. The product in question is an animal feed supplemen....
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....tion by the birds. It helps to strengthen gut of the birds. Product is to ensure that the quality of the bird litter is better. The litter is more hygienic, so that the bedding. 7.20 From the above table, it is evident that the composition of the product covered in the SCN vis a vis the composition of the product covered in the present application is different. Further, the purposes of the products too are different: while Enviva Pro is for the birds to achieve better nutrition from the feed, Provalen Plus is for improving the quality of the bird litter to ensure that the same is better for environment and the bird health. 7.21 Further, the SCN dated 22.05.2023, was issued contending that Enviva Pro 201BA is classifiable under Heading 2309 and not under Heading 3002. In this regard, the applicant has submitted that consequent to such SCN disputing the classification of the product Enviva Pro 201BA, the Applicant had started importing the same by adopting classification under Heading 2309. 7.22 The product Enviva Provalen Plus is a probiotic feed additive for poultry diets. It is a multi-strain probiotic (containing Bacillus amyloliquefaciens and Bacillus licheniformis) ....
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.... of the antibiotics manufacturing 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". 7.25 Reference is also made to the European Feed Manufacturers' Federation (FEFAC)'s article titled 'What is a premix?' which states that in order to ensure that micro- ingredients are mixed with macro-ingredients (in a homogeneous way), an intermediate dilution step is required via a 'premix'. From the above extracts, it is evident that for undertaking such supplements for poultry litter management, the micro-ingredients like bacillus are first prepared into the form of premix, and the premix is then added to animal feed. Thus, such supplementation is necessarily done through a two-step process: 1) preparing of the premixes and 2) addition of premix to animal feed. Thus, "premixes" are an essential and an indispens....
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.... 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 in the trade as products for a specific use in animal feeding." ii. Circular No. 80/54/2018/GST dated 31.12.2018 - The Board clarified that as per the Explanatory Notes, the Tariff Heading 2309, inter alia, covers vitamins and pro vitamins which improve digestion and more generally ensure that the animal makes good use of the feeds and safeguards its health. It has also been stated in the said Circular that to claim products as animal feed supplements, it is necessary to ensure that such products are commonly known to trade as products for a specific use in animal feeding. iii. M.F. (D.R.) Instruction No. 34/2022-Cus., dated 30-12-2022 - The instruction set out consolidated list of animal feed additive/supplement permitted for im....