COLLECTOR OF CUSTOMS AND CENTRAL EXCISE, GUNTUR, ETC. ETC.versusM/S SURENDRA COTTON OIL MILLS AND FERT. CO. ETC. ETC.

       COLLECTOR OF CUSTOMS AND CENTRAL EXCISE,                                    A
                   GUNTUR, ETC. ETC.
                          v.
  MIS SURENDRA COTTON OIL MILLS AND FERT. CO. ETC. ETC.

                            DECEMBER 15, 2000
                                                                                   B
          [UMESH C. BANERJEE AND BRIJESH KUMAR, JJ.]


      Customs Tariff Act, 1975-Tariff Heading No. 21-Animalfeed-Export
duty on de-oiled rice bran extraction, niger seed extraction of topicoa chips      C
and sesame seed extractions-Ingredients of animal feed-Held, ingredients
of animal feed are not animal feed by themselves and not liable to export duty
under the Heading.

      Tariff Heading No. 21 of the Second Schedule to the Customs Tariff
Act, 1975 deals with 'animal feed' for levy of export duty. Respondents export     D
de-oiled rice bran extniction, niger seed extraction of topioca chips and sesame
seed extractions. Revenue classified the products under Tariff Heading No.
21 treating them as 'animal' feed' on the ground that they are ingredients or
supplements to the animal feed. On appeal, Customs, Excise and Gold (Control)
Appellate Tribunal held that the products are only ingredients of animal feed
and not 'animal feed' by themselves and therefore are not liable to export duty    E
under the Heading.

      In appeal to this Court, Revenue contended that the products, being
ingredients or supplements to the animal feed, would fall within the scope of
the Heading and further contended that either the Heading or the entire Tariff
Act does not differentiate the ingredients of animal feed with animal feed and     F
that the products, being a part of the whole, are liable to export duty.

      Dismissing the appeals, the Court

       HELD: 1.1. In IS 9703-1980 the Indian Standard Institution recognises
a distinction between the feeding stuffs (ingredients) and animal feed. The        G
understanding of the Indian standard Institution 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
                                       701                                         H
    702                     SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A 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 ingredients 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
B   the mix and not any specific item as such. The oil cakes and rice bran exported
    by the respondents cannot be termed to be animal feed warranting invocation
    of Heading No. 21 of the export tariff under the Customs Act.
                                                             (703-F, G, II; 705-H)

          Sun Export Corporation, Bombay v. Collector of Customs, Bombay &
C Am:, (1997) 6 SCC 564, distinguished.
         Glaxo Laboratoreis (India) Ltd. v. State of Gujarat, (1979) 43 STC 386
    Gujarat, referred to.

         CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3732-3760,
D   3762-3774of1989.

          From the Judgment and Order dated 8.8.1988 passed by the Customs,
    Excise and Gold (Control) Appellate Tribunal, New Delhi in Order No. 514/88-
    D ofCD/2211/86-D.).
                                           WITH
E
          Civil Appeal Nos. 1685-1691of1997.

          Mukul Rohtagi, Addi, Solicitor General, K.K. Dhawan, B.K. Prasad,
    Harishankar, Pradeep Mishra, P. Parmeshwaran, V. Balachandran, Subramanium
    Prasad, Rakesh K. Sharma, Ms. Janaki Ramachandran and Rajesh Prasad
F   Singh for the appearing parties.

          The Judgment of the Court was delivered by

            BANERJEE, J. This batch of appeals against the order of Customs,
    Excise and Gold (Control) Appellate Tribunal (CEGAT) pertain to classification
G   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
H   within the ambit of the term 'animal feed' as detailed in the statute.
   COLLECTOR OF C C.E ' SURENDRA COTTON OIL MILLS AND FERT CO ETC. ETC. [BANERJEE, J J   703

       Shri Mukul Rohtagi, the learned Additional Solicitor General, appearing A
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 B
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 C
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                   D
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 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                E
        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 F
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, G
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.                    H
    704                     SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A   Reference has been made to the decision of this Court in Sun Export
    Corporation, Bombay v. Collector ofCustoms, Bombay & Am:, [I 997] 6 SCC
    564 wherein this Court recorded with concurrence the observations of the
    Gujarat High Court in the case of G/axo Laboratories (India) ltd. v. State
    of Gujarat, [I 979] 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
B   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
C   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 Mis 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:
D
                "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
E          Corporation paid the duty. Later on, it claimed refund of the duty paid
           as countervailing duty contending inter a/ia that the goods imported
           were classifiable under Item 23.01/07 as "Animal Feed" and as per
           Notification No.234/82-CE dated I .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
F
           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 I .11.1982 was of no
G          avail to the Corporation.

           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
H          claim of the appellant and granted the relief holding that the goods
   COLLECTOR Of C.C E ,. St:RENDRA COTTON OIL \!ILLS AND FERT. CO. ETC HC. [BANERJEE, J.)   705

         imported were in the nature of"Animal Feed Additives" and as such                        A
         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:                                                                                B

          "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                      C
          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                   D
         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/                      E .
         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 (Born)]. Since we have already extracted in extenso
         the decision of the Bombay High Court, we do not think it necessary                      F
         to repeat the same."

      While it is true that the decision in Sun Exports Corporation's 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                    G
any assistance in the matters 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.                                                                                      H
                            ..
    706                   SUPREME COURT REPORTS (2000) SUPP. 5 S.C.R.

A          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.

    B.S.                                                    Appeals dismissed.