of Central Excise, Pune Vs. Abhi Chemicals & Pharmaceuticals Pvt. Ltd
 Insc 109 (21
Variava,Dr. Ar. Lakshmanan & S.H. Kapadia Dr. Ar. Lakshmanan, J.
civil appeal is directed against the judgment and final order No. 243/99-D in
Appeal No. E/2546/93-D dated 11.03.1999 passed by the Customs, Excise &
Gold (Control) Appellate Tribunal (for short 'the CEGAT') at New Delhi.
respondent is the manufacturer of Dailymix. Four show cause notices were issued
alleging that they had mis-classified their products under C.S.H. No. 2302.00
and cleared at nil rate of duty. The show cause notices added that these
products are intermixture of vitamins and, therefore, correctly classifiable
under C.S.H. No. 2936.00 and as such chargeable to duty at the rate of 15%
advance (BED) + 5% BED (SED).
Assistant Commissioner in his order dated 24.01.1991 held that the products Dailymix
and Briplex were correctly classifiable under Chapter Sub-heading 2302.00. He,
however, confirmed the demand of Rs.2,04,129.18. In respect of 'RECOVIT'with
which we are concerned in this appeal, he held that it is classifiable under
Chapter Sub-heading 2936.00 as animal feed supplement. The conclusion of the
Assistant Commissioner was arrived at on the basis of Dy. Chief Chemist's
report which stated that Recovit may be considered as an organic chemical
(intermixture of vitamins) marked as Annexure-P2. The assessee filed an appeal
before the Commissioner (Appeals) who, by his order dated 27.07.1993, set aside
the order of the Assistant Commissioner and held that Recovit was correctly
classifiable under Chapter Sub-heading 2302.00 as animal feed. The revenue
filed an appeal against the order of the Commissioner (Appeals) which has been
decided by the CEGAT vide its order dated 11.03.1999. The Tribunal has
dismissed the appeal of the Department relying upon the decision of a larger
Bench of the Tribunal in the case of Tetragon Chemie dated 13.11.1998. The
Tribunal has further held that the contention of the revenue that Recovit is
merely a mixture of vitamins alone is not borne out on facts. The Tribunal held
that such a product, however, if it contains other things such as
anti-oxidants, solvents, stabilisers and used as animal feed will not be
classified under Chapter sub-heading 2936, but will be correctly classified
under Tariff heading 23.02. Aggrieved by the order of the Tribunal, the Revenue
has come up in appeal.
stated earlier, we are concerned in this appeal in regard to the classification
of a product known as Recovit. Now the question is whether animal feed (Recovit)
is classifiable under Tariff Heading 29.36 as intermixture of vitamins or under
Tariff heading 23.02 as animal feed.
heard Mr. R.Venkataramani, learned senior counsel for the appellant and Mr. Makarand
D.Adkar, learned counsel for the respondent.
senior counsel appearing for the appellant invited our attention to the show
cause notices issued and the orders passed by all the authorities including the
Tribunal and submitted that both the Commissioner (Appeals) and the CEGAT have
totally ignored the Dy. Chief Chemist's report dated 06.12.1990 in respect of
Daily mix, Recovit etc. and that Recovit should be treated as animal feed
supplement containing vitamins and minerals. He would further submit that both
the Commissioner (Appeals) and the CEGAT have erred in placing total reliance
on the judgment of Tetragon Chemie (P) Ltd. (supra). According to the learned
senior counsel, the product in that case consists of a mixture of vitamins,
minerals and various other ingredients which is not similar to the product 'Recovit'
as the same consists of only intermixtures of vitamins and, therefore, it is
correctly classifiable under Chapter Sub-heading 2936.00.
proceeding further in considering the submission made by learned senior counsel
for the appellant, it is better to reproduce both the entries.
Sub- Description of goods Rate of No. heading No. duty (1) (2) (3) (4) 23.01
2301.00 Residues and waste from the food 12% industries, including bagasse,
other waste of sugar manufacture and oil cakes 23.02 2302.00 Preparations of a
kind used in Nil animal feeding, including dog and cat food XI. PROVITAMINS,
VITAMINS AND HORMONES 29.36 2936.00 Provitamins and vitamins, natural or 15%
reproduced by synthesis (including natural concentrates), derivatives thereof
used primarily as vitamins, and intermixtures of the foregoing, whether or not
in any solvent" The assessee has declared these three products in that
classification list which had been approved by the Assistant Collector. They
Daily mix :- ..
:- It is a mixture of vitamins but it contains stabilisers and anti-oxidants
also, in addition to solvents.
to the assessee, the classification list for these products has already been
approved by the Assistant Collector and, therefore, the Assistant Collector is
not competent to change his own decision. The assessee had claimed the
classification of these products under Chapter sub- heading 2302 as animal feed
supplement and the Department had claimed that the correct classification would
be under Chapter sub-heading 2936 as organic chemicals. It is stated that the
product is used as animal feed only and is meant for consumption by animals. It
is not fit for human consumption. It basically consists of mixture of vitamins,
minerals, anti- oxidants and stabilisers. The Assistant Collector has wrongly
classified the product under Chapter 29 as intermixture of vitamins merely
because it consists of solvents, stabilisers and anti-oxidants. It was further
stated that once powder is meant for use as an animal feed supplement, it
should be classified under Chapter Sub-heading 2302. In our view, the products
which have mixture of vitamins and minerals with addition of other ingredients
and which are used for animal feed and are not fit for human consumption are to
be classified as animal feed supplement under Chapter Heading 2302 and not
under Chapter 29.
senior counsel for the Department sought to place reliance upon the report of
the Dy. Chief Chemist which has been annexed. It has come on record that the
product Recovit basically consists of mixture of vitamins, solvents,
anti-oxidants and stabilisers. It has also come on record that Recovit is used
as animal feed only and is being consumed by animals only. It is a finding of
fact recorded by the Commissioner (Appeals) and also by the Tribunal. It may
not be out of place to mention that the composition of product was argued
before the Tribunal. However, the Department could not contradict or dislodge
the findings recorded by the Commissioner (Appeals). Both the Commissioner
(Appeals) and the Tribunal examined the facts of the case and decided the
matter in favour of the assessee.
was invited to the reply affidavit filed by the assessee in this appeal. It is
seen that a trade notice No. 34/1990 was issued by the Collector of Central
Excise and Customs, Pune whereby it was clarified by the Department that the
product having vitamins, stabilisers, anti-oxidants and solvents merits
classification under Chapter 29 Heading 29.36 and not under Heading 23.02 of
the schedule to the Central Excise Tariff Act, 1985.
based on the above trade notice, a show cause notice was issued which led to
the present appeal. Trade notice No. 34 of 1990 reads as follows:- "OFFICE
OF THE COLLECTOR OF CENTRAL EXCISE & CUSTOMS, PUNE PMC'S COMMERCIAL
BUILDING, HIRABAUG, TILAK ROAD, PUNE 2.
PUNE CENTRAL EXCISE & CUSTOMS, COLLECTORATE TRADE NOTICE NO. 34 / 1990 (
1/Ch. 23 / 90) Sub :- Central Excise Classification of intermixtures of
Vitamins used as animal feed supplements whether classifiable under Heading
23.02 or in Chapter 30 or Chapter 29 regarding.
doubt has been raised regarding the correct classification of products which
consists of only different vitamins in definite proportions and no other
ingredients except the solvents or stabilisers or anti-oxidants. Such products
are generally used as animal feed supplements. The doubt raised is whether the
such products which are mixtures of vitamins are classifiable under heading
23.02 or as medicaments under heading 30.03 or an inter mixture of vitamins
under heading 29.36.
matter has been examined and it is observed that such animal feed supplements
which are just inter mixture of vitamins only and that there are no other
ingredients except solvents, stabilisers or anti-oxidants are specifically
covered under heading 29.36 of C.E.T. as inter mixture of vitamins. Even though
they are used as animal feed supplements, they can be classified under heading
23.02 as preparations of kind used in animal feeding, because this is a general
heading. Inter mixture of vitamins are specified in so many words in heading
29.36 and accordingly products of the type referred above are correctly
classifiable under heading 29.36.
Trade Associations and Chambers of Commerce and Industries are requested to
bring the contents of this Trade Notice to the notice of their member
version is enclosed.
Sd/- SUPERINTENDENT (TECH) (L. Joyaseelan) C. EX & CUS. PUNE 2 Additional
Collector Central Excise & Customs Pune.
V.Ch. 23 (8)2/TC/90 Pune, the 30th June, 1990." Trade Notice No. 34 of 1990 seems to have been issued on the
basis of the Board Circular No. 1 of 1990 dated 01.01.1990. The Central Board
of Excise and Customs vide its circular No. 188/22/96-CX dated 26.03.1996 has
clarified that when premix contains in addition to active substances, stabilisers,
anti-oxidants etc. and if such preparations are of a kind used in animal
feeding the same is classifiable under Heading 23.02. The said circular reads
as follows:- "Animal Feed Supplements Circular No. 188/22/96-CX Dated
26/3/96 Government of India Ministry of Finance Department of Revenue Central
Board of Excise and Customs, New Delhi Subject: Classification of Animal Feed
Supplements under Sub-heading No. 23.02 or 29.36 or Chapter 30 Instructions Regarding.
been brought to the notice of the Board that a large number of products with
supplements'/additives/premixes etc. but are being classified either under
heading 23.02 or heading 29.36 or under Chapter 30 of the Central Excise Tariff
in various Commissionerates.
would be recalled that in its Circular No.1/90 dated 1.1.1990, issued from
F.No.15/20/89-Cx.I, Board had observed that animal feed supplements which are
just inter-mixtures of vitamins only without other ingredients, except
solvents, stabilizers or anti-oxidants, cannot be classified under heading
23.02 even though they are used as animal feed supplements. Board had observed
that such inter-mixtures of vitamins are specifically covered under heading
Trade interests have however represented that animal feed supplements use
vitamins, pro-vitamins, amino-acids, anti-biotics, 'Coccidiostats' etc. in very
small quantities (micro-quantities) and that the feed supplements contain other
organic and in- organic feed ingredients as well. They have also represented
that such micro-nutrients do not have any independent identity as pure
chemicals, that they cannot be easily separated into individual pure chemicals:
nor do they conform to standard laid down for medicaments. As such, it is
claimed that animal feed supplements cannot be classified under Chapter 29 or
Chapter 30 of the Central Excise Tariff merely because they contain the said
matter has been further examined by the Board in consultation with the Chief
Chemist, Central Revenue Chemical Laboratory (CRCL), New Delhi.
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 composition consisting of
a number of substances each type of these substances being present in the
'premix' in varying propositions 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-acid, 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.
this view of the matter, it would appear that preparations containing the
active substances (vitamins or provitamins, amino-acid, antibiotics, coccidiostats
etc.) along with the said carriers would fall under Heading 23.02 of the CET
provided such preparation are of a kind used in animal feeding. It may however
be noted that Heading 23.098 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 are ordinarily of
commonly known to the trade as products for a specific use in animal feeding.
view of the foregoing discussions, the classification of each product being
claimed as animal feed supplements may be decided on merits in the light of the
above and in accordance with the explanatory notes to Heading 23.09 or the HSN
read with Chapter Note 1 of Chapter 23 of the CET.
Board's Circular No.1/90 dated 1.1.1990 stands modified to the extent indicated
(S.C. Bhatia) F.No.23/1/94-CX.1 Under Secretary to the Govt. of India" It
may be extremely relevant to point out that the Board's Circular No.
1990 dated 01.01.1990 stands modified accordingly. Similarly, the Dy.
General of Foreign Trade vide its policy Circular No. 44 (RE 99/1997-2002 dated
25.11.1999 has re-confirmed that if such pre-mixes are for use exclusively for
animal feed as supplements, the same continued to be classified under Heading
23.09 of the Customs Tariff Act, 1975. Policy circular No. 44 runs as follows:-
"POLICY CIRCULAR No.44(RE-99)/1997-2002 Dated 25th November, 1999
Attention is invited to Policy Circular No. 22(RE-99)/1997-2002 dated 27.7.99,
regarding classification of animal feed supplements.
this regard it is further clarified that 'Pre-mixes' containing vitamins or
pro-vitamins, aminoacids, coccidiostats etc. for use exclusively in animal feed
as supplements continue to be classified under the Heading 23.09, as per
Explanatory Notes to Harmonized Commodity Description and coding system.
issues with the approval of DGFT.
(O.P. Hisaria) Deputy Director General of Foreign Trade
F.No.01/89/180/00072/AM99/PC I-A Dated 25th November, 1999 Issued by:
of Commerce Directorate General of Foreign Trade New Delhi." It may also
be relevant to point out that on 27.09.1990, the Central Excise Department has
drawn a sample of the product Recovit and the same was sent for chemical
analysis to the Deputy Chief Chemist at Mumbai.
drawing the sample, a test memo was prepared by the Inspector under F. No. BR
II/CL/Abhi/90 dated 27.09.1990. It can be seen from the said test memo that the
said product Recovit had in addition to the intermixture of vitamins other
ingredients such as anti-oxidants, solvents and stabilisers and that the
product prepared cannot, therefore, be called as only intermixture of vitamins.
said test memo reads as follows:- "OFFICE OF THE SUPERINTENDENT OF CENTRAL
EXCISE, BHOSARI RANGE II, BHOSARI, PUNE 411 039 TEST MEMO F.No.BR
II/CL/ABHI/90/ Bhosari, the 27.09.1990 The Deputy Chief Chemist, Central Excise
Laboratory, Estrella Batteries Compound, Dharawi Road, Matunga, BOMBAY 400
Sir, A sample of Recovit has been sent by hand delivery dated 27.09.90 for
Name of the factory & address : Abhi Chemical & Pharmaceutical Pvt. Ltd.
T3638, MIDC, Bhosari, Pune26.
Description of sample : Animal Feed Supplement Recovit.
Identification mark, if any : Batch No. 338-A.
Date of Drawal and Batch No. : 27-9-90 Batch
No.338-A 5. No. of containers : 4 Nos.
: 100 ml.
sample is to be tested for : The party has classified this product under
Chapter Heading 2302.00. The classification may please be confirmed.
Chemical nature & %age of : As per separate sheet attached. ingredients in
Brief outline of manufacturing : As per separate sheet attached. Process
Mode of its application : Animal feed supplement (and use)
Any printed literature if : Label enclosed.
may be sent.
For Abhi Chemical & Pharmaceutical Pvt. Ltd. Inspector of Central Excise Sd/-
Bhosari Range II, Bhosari (Authorised signatory) PUNE 39 DECLARATION Four
representative samples of Recovit at Abhi Chemical & Pharmaceutical Pvt.
Ltd. have been drawn by the Inspector of Central Excise, Bhosari Range II, Bhosari,
Pune 411039 and these have been sealed in our presence. One of the sealed
samples have been given to us. We are perfectly satisfied with the manner of
Chemical & Pharmaceutical Pvt. Ltd.
NATURE AND PERCENTAGE OF INGREDIENTS IN RECOVIT AS FOLLOWS:
Name of ingredients Chemical nature % in product
80 (Polysorbate) Brownish yellow oily liquid 34.97%
Hydroxy Anisol Crystalline powder 0.02%
Hydroxy Toulene Crystalline powder 0.02%
Vitamin A Palmitate Yellow oily substance 2.57%
Vitamin B3 White powder 0.01%
Vitamin B 12 Red orange powder 0.0026%
Vitamin E Acetate Pale yellow golden 4.37% Viscuss liquid
Colourless viscuss liquid 26.85%
Sodium Ascorbate White crystalline powder 9.62%
Acetic Acid Colourless liquid 0.34%
OF MANUFACTURING PROCESS
1. Mix Vit A, Vit E, Vit D3, BHA & BHT completely in vessel.
2. Warm Tween 80 upto 40 degree C and add to it mixture No.1 in a thin stream.
Stirr it well.
3. Add Glycerine in a think stream with stirring in 2.
4. Take 60 Ltrs water (D'mineralised) add to it Sodium Ascorbate dissolve it completely
adjust FH to 6.0 with Glacial Acetic Acid add this soln. To main soln. Stir for
15 minutes. And filter then add vit B12 (Prepare with small qty. of D.M. water
and add to main soln.) Product is kept over night & ready for filling.
Chemical & Pharmaceutical Pvt. Ltd.
signatory)" The order passed by the larger Bench of the CEGAT dated
13.11.1998 was also placed before us. We have gone through the same and we
approve the classification laid down by the CEGAT in regard to the
subject-matter of controversy and the principles laid down therein. In fact,
the said order of the larger bench was challenged before this Court. This Court
in Collector of Central Excise, Bangalore vs. Tetragon Chemie P. Ltd. reported
in 2001 (132) E.L.T. 525 (Three-Judge Bench) upheld the view taken by the
Tribunal that the products in question are animal feed supplements and that the
animal feed supplements were rightly included in Tariff Item 23.02 being
preparation of a kind used in animal feeding including dogs and cats food. The
Bench has agreed with the conclusion of the Tribunal that even food supplements
like the products of the respondents therein which are used in animals feeding
would fall under Heading 23.02. This Court while affirming the decision of the
Tribunal dismissed the civil appeals.
the foregoing reasons, we are of the opinion that the contentions in the civil
appeal are apparently contrary to the stand taken by the Department in the
circulars mentioned supra and we, therefore, have no hesitation in dismissing
the appeal as bereft of any merits. However, we say no costs.