The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no excise duty payable on animal feed supplements.
The bench of Suvendu Kumar Pati (Judicial Member) and Anil G. Shakkarwar (Technical Member) has observed that the animal feed supplements were used for growth treatment, maintaining and removing certain deficiencies from the animals and safeguarding their health and they were held to be classifiable under Heading 2302 which is now restructured to 2309.
The appellant/assessee is in the business of manufacturing of excisable goods viz. pharmaceutical products falling under Heading No. 3003 and animal feed supplements falling under Heading No. 2309 of First Schedule to Central Excise Tariff Act, 1985.
The animal feed supplements manufactured by the appellant are having various names such as Mifex Oral Suspension, Sancal Vert Forete, Sancal Pet 200 ml, Gold Boost Tonic, Vetoliv etc. Appellant is clearing animal feed supplements by classifying the same under Heading 2309 of Central Excise Tariff Act, 1985.
Chapter note of Chapter 23 reads “Heading 2309 includes “products of a kind used in animal feeding, not elsewhere specified or included, 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.”
The department noted that the composition of the animal feed supplements which contains ingredients such as calcium, magnesium, phosphorus, vitamin B12 and vitamin D3, the same should get classified under Heading 3003 or 3004 of Schedule to Central Excise Tariff Act, 1985 depending on whether put up in major doses for retail sale or otherwise and shall attract appropriate central excise duty.
Therefore, a show cause notice was issued to the appellant stating that the goods under question are prima facie classifiable under Heading 2309 and 3003 or 3004 and, therefore, by applying General Rules for Interpretation of First Schedule to Central Excise Tariff Act, 1985, they should be classified under Heading 3003 or 3004 and through the said show cause notice, central excise duty applicable to Heading 3003/3004 of Rs.1,66,27,016/- was demanded by invoking extended period of limitation provided under the provisions to sub-section (1) of Section 11A of Central Excise Act, 1944 for the period upto 07.04.2011 and for the period after 08.04.2011 by invoking sub- section (4) of Section 11A of Central Excise Act, 1944.
The period for which the demand was raised was for the financial year 2008-09 to 2011-12. Appellant contested the said show cause notice by stating that the products manufactured by the appellant were classified under Tariff Item No. 23099090 of First Schedule to Central Excise Tariff Act, 1985 because they were used as animal feed supplements and that the onus is on Revenue to show that the said products were medicaments for their being classified under Chapter Heading 3003 or 3004 of the said Schedule as held by Hon’ble Supreme Court in the case of Puma Ayurvedic Herbal (P) Ltd. vs. Commissioner of Central Excise, Nagpur reported at 2006 (196) ELT 3 (SC).
Appellant further submitted before the original authority that medicaments require drug licence issued by FAD under Drugs and Cosmetics Act, 1940 and such licences are to be displayed on the labels of the manufactured medicaments and the said case is not with the animal feed supplements manufactured by them and, therefore, the goods in question were not medicaments classifiable under Heading 3003 or 3004 of the said Schedule.
The tribunal held that the animal feed supplements mainly contains calcium, magnesium, phosphorus, vitamin B12 and vitamin D3 and certain microbial culture and the same are not specified in the index in British Pharmacopoeia and Indian Pharmacopoeia except few salts of calcium and few salts of calcium which are specified therein are in injectable form. The goods manufactured by the appellant are not covered as medicines. The goods are not requiring FDA licence for manufacture and the same are not prescribed medicines for curing any diseases, the same should be classified under Heading 2309 as claimed by the appellant.
Case Details
Case Title: Emil Pharmaceutical Industries Pvt. Ltd. Versus Commissioner of Central Excise, Thane-II
Case No.: Excise Appeal No. 89273 of 2013
Date: 12.12.2024
Counsel For Appellant: CA S.S. Gupta
Counsel For Respondent: Vinod S. Chettiparambil, Assistant Commissioner
