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CASE NO.: Appeal (civil) 3732-3760  of 1997         Appeal (civil)  3762-3774        of 1989         Appeal (civil)  1685-1691        of 1997

PETITIONER: COLLECTOR OF CUSTOMS & CENTRAL EXCISE, GUNTUR ETC.  ETC.

       Vs.

RESPONDENT: M/S.  SURENDRA COTTON OIL MILLS & FERT. CO.  ETC.  ETC.

DATE OF JUDGMENT:       15/12/2000

BENCH: British Kumar, U.C.Banerjee

JUDGMENT:

L.....I.........T.......T.......T.......T.......T.......T..J

     J U D G M E N T

     BANERJEE,J.

     This  batch  of appeals against the order of  Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) pertain to  classification  of de-oiled rice bran extraction,  niger seed extraction of topioca chips and sesame seed extractions as  animal  feed falling under Tariff Heading No.21  of  the Second  Schedule to the Customs Tariff Act, 1975.  The  core question  thus  relates to the factum of export  duty  being leviable  thereon  during  the relevant period   CEGAT  has answered  that since these products are only ingredients  of animal  feed  and not animal feed by themselves, the  same would not come within the ambit of the term animal feed as detailed  in  the statute.  Shri Mukul Rohtagi, the  learned Additional  Solicitor General, appearing for the  appellant, very strongly contended that differentiation, there might be as  regards the product, but the factum of the product being an  ingredient  or  a supplement to the  animal  feed  would definitely  bring it within the scope of Heading 21 of the Customs  Tariff  Act    Heading 21  does  not,  in  fact, differentiate  between the ingredients of animal feed and an animal  feed neither the entire Tariff Act introduced such a differentiation  but the factum of the same being a part  of the  whole,  the  same  cannot   escape  the  export   duty. Admittedly.   the  contextual  facts depict that  these  are ingredients  of  animal  feed and it is on  this  score  the Tribunal came to the conclusion that the ingredient does not by themselves become an animal feed unless the same is mixed with some other elements and since the statutory requirement for levy of duty is animal feed, in order to have the export duty  attributed  thereto,  question of the same  being  not within  the ambit of the item does not and cannot arise.  Be it recorded that the term animal feed has not been defined in  the  Tariff  Act  and  as  such  we  are  left  with  no alternative excepting noting the ordinary dictionary meaning of  the  word or the user and understanding of the  word  in

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common parlance.  In IS 9703-1980 it is found in para 0.2 as below:- In the field of animal feeds manufacturing industry a large number of feeding stuffs (ingredients) are utilised, which  may  be  by- products of other  industries  and  also subjected to certain processing before utilisation.

     IS  9703  thus  recognises a distinction  between  the feeding   stuffs  (ingredients)  and   animal   feed.    The understanding  of  the  Indian   Standard  Institution,   as referred  in IS 9703, thus goes to suggest that  ingredients by themselves cannot be termed to be animal feed - It may be a component or ingredient or a basic stuff, but it cannot be termed  to  be animal feed.  A very common example  on  this score remains that of oil cakes  whereas oil cakes are used as  protein  supplement in livestock food stuffs  and  mixed with  the  animal  feed, oil cakes by themselves  cannot  be termed  to  be  an animal feed, since animal feed  not  only consists  of  its  ingredients but the total bulk  in  form, shape and size which would feed an animal.  Animal feed thus cannot  be  an ingredient or a part of the feed but  in  its entirety  and  as a whole taken together with even  vitamins and calcium mix.

     The  whole  substance  thus  is the mix  and  not  any specific  item  as  such.  Reference has been  made  to  the decision  of this Court in Sun Export Corporation, Bombay v. Collector  of  Customs,  Bombay & Anr.  [1997 (6)  SCC  564] wherein   this   Court  recorded    with   concurrence   the observations  of the Gujarat High Court in the case of Glaxo Laboratories  (India) Ltd.  v.  State of Gujarat [1979  (43) STC  386 Gujarat] to the affect that it cannot be said  that animal  feed concentrates are not animal feed.  In the  same manner  products  which  supplement animal  feed  and  which generally  added  to  animal feed are also  covered  by  the generic  term animal feed.  The situation however, is  not the  same in the instant matter.  In the case of Sun Exports Corporation  (supra), it was animal feed and animal  feed supplements and by reason of the exemption notification for animal  feed, this Court came to a definite conclusion  that animal feed includes animal feed supplements and as such M/s Sun  Exports  Corporation  was declared to  be  entitled  to refund under the relevant exemption notification.  The brief facts  as appears from the decision (at page 565) leading to these  appeals  are as follows:  The appellant  Corporation imported  six consignments of goods [Pre-mix of Vitamin AD-3 Mix  (feed  grade)]  at  Bombay and  seven  consignments  of similar goods at Calcutta.  These consignments were assessed to duty under the heading 29.01/45(17) of the Customs Tariff Act,  1975  read with Item 68 of the Central  Excise  Tariff Act,  1985.   The Corporation paid the duty.  Later  on,  it claimed  refund  of  the duty paid  as  countervailing  duty contending   inter  alia  that   the  goods  imported   were classifiable under Item 23.01/07 as Animal Feed and as per Notification  No.234/82-CE dated 1.11.1982, those goods were exempted  from levy of duty.  Accordingly, applications were filed  for refund of the countervailing duty/additional duty paid  on  such imports.  The Assistant  Collector  (Refunds) concerned  rejected the claim of the appellant holding  that the goods imported were assessable to duty under the heading 29.01/45(17)  of  the then prevailing First Schedule to  the Customs  Tariff Act read with Item 68 of the Central  Excise Tariff  and  therefore,  the  Exemption  Notification  dated 1.11.1982 was of no avail to the Corporation.

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     3.   Aggrieved by the rejection of refund applications the  appellant  preferred  separate appeals one  set  before Collector  of  Customs  (Appeals), Bombay  and  another  set before  Collector  of  Customs   (Appeals),  Calcutta.   The appellate  authority  at  Bombay accepted the claim  of  the appellant  and  granted  the relief holding that  the  goods imported  were in the nature of Animal Feed Additives  and as  such  fall  under the heading  23.01.07.   However,  the appellate  authority  at Calcutta rejected the claim of  the appellant  and  dismissed the appeal accepting the  view  of Assistant Collector (Refunds).

     It is on this factual backdrop this Court in paragraph 14 of the report observed as below:  14.  We have carefully gone  through  the  minority and the majority views  of  the Tribunal.   We find that Shri K.  Gopal Hegde who has  dealt with  the issue in extenso, has taken note of the ratio laid down  by  the  Bombay and Gujarat High Courts as well  as  a subsequent decision of the Tribunal itself in CCE v.  Punjab Bone Mills (1988) 38 ELT 389 (Trib) (Appeal No.615/85-C with E/Cros/64/1988-C)  for coming to a conclusion that the goods imported  by the appellants are eligible for exemption under Notification No.234/82.  However, this view was the minority view  and, therefore, the exemption claimed by the appellant was  denied.  The majority view, it appears, was  influenced by  the  fact  that  a decision of  the  Tribunal  in  Aries Agro-Vet  Industries  (P)  Ltd.   v.    CCE  (1984)  16  ELT 467(Trib)  taking  a similar view, was challenged by  filing Civil  Appeal  No.17 of 1984 and that was dismissed  at  the admission  stage.   It  must be noted  that  presumably  the amendment   to  Exemption  Notification   No.234/82   by   a subsequent  Notification  No.6/84-C.E.  dated 15.2.1984  was not  before the Court for consideration.  The majority  view also  failed to take note of the subsequent amendment to the main  exemption  notification as well as the effect  of  the amendment  as  noticed by the Bombay High Court  in  Glindia Ltd.  case [(1988) 36 ELT 479 (Bom)].  Since we have already extracted  in extenso the decision of the Bombay High Court, we do not think it necessary to repeat the same.

     While  it  is  true that the decision in  Sun  Exports Corporations  case  (supra) delved into animal feed but  by reason  of the factual situation as noticed above, the  same is  clearly distinguishable and, in fact, does not lend  any assistance in the matter in issue.

     It  is on this perspective it can not but be held that the  oil cakes and rice bran as exported by the  respondents cannot  thus  be  termed  to   be  animal  feed   warranting invocation  of  Heading  21 of the export tariff  under  the Customs Act.  The Judgment of the Tribunal cannot be faulted in  any  way.  This batch of appeals therefore fail and  are dismissed without however any order as to costs.