The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that imported vitamin and enzyme premixes intended exclusively for use in animal feed are classifiable under Customs Tariff Heading (CTH) 2309.
The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) rejected the Customs Department’s attempt to classify the vitamin premixes under CTH 2936 and enzyme preparations under CTH 3507.
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The appellant/assesee is engaged in importing preparations containing vitamins, enzymes and other ingredients for use in animal feeding. The products were imported from a related overseas supplier, the appellant.
The disputed products broadly belonged to two categories: Vitamin premixes sold under different “Rovimix” product names; and Enzyme preparations sold under the “Ronozyme” product range.
The company classified these products under CTH 2309, which covers preparations of a kind used in animal feeding.
Since the imports were made from a related party, their assessments had remained provisional from October 2010. The appellant was required to execute bonds and furnish security through revenue deposits or Extra Duty Deposits.
The Special Valuation Branch subsequently completed its proceedings through an order dated October 26, 2016. It accepted the declared value of the imported goods and held that the relationship between the importer and supplier had not influenced their price.
Separate investigations were conducted by the Central Intelligence Unit and the Special Investigation and Intelligence Branch concerning the classification of the products.
The Department took the position that Vitamin and vitamin premixes were classifiable under CTH 2936; and Enzyme preparations were classifiable under CTH 3507.
Due to this classification dispute, the provisional assessments for imports made between October 2010 and December 2020 were not finalised.
The appellant repeatedly approached the Customs authorities between 2018 and 2020 seeking finalisation of the assessments and refund of the deposits made during provisional assessment. As no decision was taken, the company approached the Bombay High Court in 2021.
The High Court directed the Department to finalise the provisional assessments. Following several personal hearings, the Assistant Commissioner passed an order on September 22, 2023, rejecting classification under CTH 2309.
The authority classified the vitamin products under CTH 2936 and enzyme products under CTH 3507, confirmed differential customs duty with interest and ordered its appropriation from the deposits made by the importer.
The CESTAT noted that the operative part of the adjudication order did not specify the precise amount of duty demanded, confirmed or appropriated.
The Commissioner of Customs (Appeals) upheld the adjudication order on May 8, 2024, prompting the appellant to approach the Tribunal.
The appellant argued that the products were vitamin and enzyme premixes intended exclusively for animal feed and were not fit for human consumption.
The imported products contained vitamins or enzymes as active ingredients along with carriers, fillers, stabilisers, anti-caking agents and other additives. These additional ingredients were included considering the intended use of the products in manufacturing animal feed.
The company further submitted that the imported preparations were used to manufacture composite premixes containing vitamins, minerals and enzymes. These composite preparations were also used only for animal feeding.
Reliance was placed on the Larger Bench ruling in Tetragon Chemie (P) Limited v. Collector of Central Excise, Bangalore, which held that premixes meant for animal feeding were classifiable under the heading corresponding to CTH 2309. That ruling was upheld by the Supreme Court.
The appellant also relied upon the Tribunal’s ruling in Venkateshwara B.V. Bio Corp Private Limited v. Commissioner of Customs (NS-I). According to the company, that case arose from the same investigation and involved products supplied by the same Singapore-based supplier.
The Tribunal had classified the products involved in that case under CTI 2309 9090. The Supreme Court dismissed the Department’s appeal against that ruling on February 7, 2025.
The appellant pointed out that the test reports issued by the Deputy Chief Chemist in its case were comparable to those considered in the Venkateshwara B.V. Bio Corp matter.
The Commissioner (Appeals) had reasoned that vitamins and provitamins were specifically covered by Heading 2936, irrespective of whether they were used in manufacturing or animal feed.
Applying Rule 3(a) of the General Rules for Interpretation, the Commissioner held that a specific tariff entry must prevail over a general or residual entry.
As regards enzyme products, the Commissioner concluded that the preparations fell under CTH 3507, which covers enzymes and prepared enzymes not elsewhere specified or included.
The appellate authority held that the presence of anti-caking agents, stabilisers, thickeners, coating agents and preservatives did not alter the essential character of the products as enzyme preparations.
It consequently upheld the classification of the Rovimix vitamin premixes under CTH 2936 and the Ronozyme enzyme preparations under CTH 3507.
No Comprehensive Tariff Analysis by Lower Authorities
The CESTAT found that the original and appellate authorities had not undertaken a detailed analysis of the scope of the rival tariff headings and the relevant Harmonised System of Nomenclature explanatory notes.
According to the Tribunal, such an examination was necessary to arrive at the proper classification under the Customs Tariff Act, 1975.
The Commissioner had primarily relied on the principle that a specific tariff entry must prevail over a general entry and on the ingredients contained in the products.
The Bench held that the appellate order was prima facie unsustainable because it lacked a comprehensive examination of the competing tariff entries.
Larger Bench Ruling Covers Vitamin Premixes
The Tribunal referred to the Larger Bench decision in Tetragon Chemie, which held that premixes containing mineral substances, vitamins or provitamins, trace elements, appetisers, soya flour, meal or yeast were covered under Heading 2309 of the HSN.
In that decision, the Larger Bench had examined whether preparations used in animal feeding, consisting of vitamins mixed with diluents and other substances, should be classified under the vitamin heading or under the heading for animal-feed preparations.
The dispute was decided in favour of the assessees. The Supreme Court subsequently upheld the Larger Bench ruling by dismissing the Department’s appeal.
Product Literature Established Exclusive Animal-Feed Use
The CESTAT also relied on the decision in Indian Trading Bureau Private Limited v. Commissioner of Customs (Port), Kolkata.
In that case, vitamins and enzymes used as animal-feed additives were classified under CTH 2309. The product literature showed that the goods formed part of animal feed and were neither fit for human consumption nor intended for preparing medicines.
The Supreme Court also dismissed the Department’s appeal against that ruling.
The Bench found that the classification dispute in the appellant’s appeals was identical to the controversy decided in the Venkateshwara B.V. Bio Corp case.
Significantly, the appellant was also one of the suppliers involved in that case.
The earlier ruling had examined:
- The provisions of the Customs Tariff Act;
- The General Rules for Interpretation;
- The scope of CTH 2309 and CTH 2936;
- The HSN explanatory notes;
- CBEC Circular No. 188/2/96-CX dated March 26, 1996; and
- The law laid down by the Supreme Court in the Tetragon Chemie and Abhi Chemicals & Pharmaceuticals cases.
After examining these authorities, the Tribunal had held that the imported animal-feed preparations were classifiable under CTH 2309 and not under CTH 2936. That decision also attained finality after the Supreme Court dismissed the Department’s appeal.
Classification Under CTH 2309 Upheld
Following the binding judicial precedents, the CESTAT held that the appellant’s imported vitamin and enzyme premixes were classifiable under CTH 2309 of the First Schedule to the Customs Tariff Act, 1975.
The Tribunal ruled that the Commissioner (Appeals)’ order upholding classification under CTH 2936 and CTH 3507 could not withstand legal scrutiny.
The Bench set aside the appellate order dated May 8, 2024 and allowed all 39 appeals with consequential relief, if any, in accordance with law.
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