TMI Blog2023 (2) TMI 674X X X X Extracts X X X X X X X X Extracts X X X X ..... g No. CAAR/Mum/ARC/22/2022 in Application No. CAAR/CUS/APPL/32/2022 - - - Dated:- 7-7-2022 - Shri M.R. Mohanty, Authority for Advance Rulings, Customs Shri T. Viswanathan, for the Assessee. RULING M/s. BASF India Limited filed an application on 20-4-2022 seeking an advance ruling on the classification of the omega-6 fatty acid product, namely Lutalin. 2. The applicant is in the business of trading and manufacturing chemicals and animal feed. They are a part of the renowned BASF group, a global supplier of innovative feed additives for livestock, aquaculture and companion animals. The applicant imports and trades in various categories of products used in the preparation of animal feed supplements. One such group of products are carotenoids imported from the parent company (BASF Germany) and other third parties for use in the manufacture of animal feed/supplements. The applicant intends to import the following product : TABLE : 1 Sr. No. Product Name Composition Purpose, the form of import manner of usage 1. Lutalin 28% Omega-6 fatty ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes covers the preparations used in animal feeds - including products which contribute to the overall health of the animals. Therefore, these products can be classified under sub-heading 2309 90 90 as Other . The applicant also submitted a certificate issued by the German Government s certifying agency stating that these products are feed supplements and are generally used for animals. They have also referred to the instructions issued by the Department of Animal Husbandry, Dairying and Fisheries listing out the animal feed additives/supplements permitted to be used in India. 3. The applicant, in their CAAR-I form, declared that they intend to import the impugned goods from the seaports of Nhava Sheva, Mumbai, Chennai and Kolkata and ACC, Mumbai. The application was forwarded to the jurisdictional Commissioners of Customs for comments. However, no reply has been received, though reminders have also been sent. 4. The application along with the other 4 applications of the applicant was listed on 1-6-2022 for a hearing. Sh. T. Vishwanathan and others appeared on behalf of the applicant. No one appeared on behalf of the Commissioners of Customs. Sh. Viswanathan explained the tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cis conformation. CLA are a family of geometrical isomers of LA found mostly in meat and dairy products from ruminants. The double bonds of CLA are conjugated and separated by a single bond. Therefore, CLA is a term for specific isomers of linoleic acid with conjugated double bonds (double bonds adjacent to each other C=C-C=C). The most biologically relevant isomers are c9,t11 C18:2 and t10,c12 C18:2. The active substance CLA (t10,cl2)-ME (Methyl Ester) is marketed in liquid and solid formulations, named Lutalin and Lutrell Pure, respectively by M/s. BASF. The applicant has filed an application in respect of the product Lutalin. The applicant has mentioned that the product contains 28% Omega-6 fatty acid (C18:2) methyl ester. The product brochure states that Lutalin contains CLA (Conjugated Linoleic Acids) based on non-GMO sunflower oil. The technical data sheet of the product mentions the following content-conjugated linoleic acid methyl esters (C18:2) min. 56% (Isomer t10, c12 min. 28% (omega-6) and Isomer c9,t11 min. 28%). The applicant failed to submit detailed compositions along with a manufacturing flow chart of the product, as assured during the personal hearing. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in effects are expected to consist of a reduction in fat synthesis and a consequent improvement in the performance and reproduction of pigs for fattening, sows and dairy cows. Omega-6 fatty acids are stated to influence the fat metabolism in mono-gastric animals. As per the applicant, feeding the said product to cows reduces milk fat production, increases milk yield and improves blood glucose levels in lactating cows. The benefit of supplementation of CLA in swine diets is stated to be the improvement of pork quality by reducing fat content and increasing fat firmness and fat CLA content. The recommended use level, as per the product brochure, for pigs, is 5 g./kg. feed and for cows is 17-34 g. per head per day. The animal feed is covered under Heading 2309. 5.2 GRI-1 provides that the classification of goods shall be determined according to the terms of the headings and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI-1, and if the headings and legal notes do not otherwise require, GRIs-2 through 6 may be applied in order. The relevant headings for classifications are reproduced below : 2309 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.0-33.1%)]. Therefore, the question arises whether the remaining components can be considered as permissible impurities. 5.3.1 HSN explanatory notes to Chapter 29 state that Separate chemically defined compounds containing other substances deliberately added during or after their manufacture (including purification) are excluded from this Chapter ...The separate chemically defined compounds of this Chapter may contain impurities [Note 1(a)]...The term impurities applies exclusively to substances whose presence in the single chemical compound results solely and directly from the manufacturing process (including purification). These substances may result from any of the factors involved in the process and are principally the following : (a) Unconverted starting materials, (b) Impurities present in the starting materials, (C) Reagents used in the manufacturing process (including purification), (d) By-products. It should be noted, however, that such substances are not in all cases regarded as impurities permitted under Note 1(a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or minerals and function nutrients. The second type of animal feedstuff, i.e., secondary feed, is the preparations devised to compensate for deficiencies, so as to ensure a well-balanced animal diet, consisting of proteins, minerals or vitamins plus additional-energy feeds. The preparations of the third category, also known as premixes, are used in making the complete feed or supplementary feed. The products in question are stated to belong to this category of premix. 5.4.2 The HSN explanatory Note II(C) to Heading 2309 further elaborates on premixes as below : These preparations, known in the trade as premixes ', are, generally speaking, compound compositions consisting of a number of substances (sometimes called additives) the nature and proportions of which vary according to the animal production required. These substances are of three types : (1) Those which improve digestion and, more generally, ensure that the animal makes good use of the feeds and safeguard its health: vitamins or provitamins, amino acids, antibiotics, coccidiostats, trace elements, emulsifiers, flavourings and appetisers, etc. (2) Those designed to preserve the feeding stuff (part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory notes under heading 23.09 of HSN further indicate that pre-mixes contain, in addition to the active substances (vitamins, amino-acids, anti-biotics, coccidiostats etc.) and stabilizers, anti-oxidants etc., certain organic or inorganic nutritive substances known as carriers which help in homogeneous dispersion and mixing of the active substances in the compound feed to which the preparations referred to in the said explanatory notes are added. 6. In this view of the matter, it would appear that preparations containing the active substances (vitamins or provitamins, amino acids, antibiotics, coccidiostats etc.) along with the said carriers would fall under Heading 23.02 of the CET provided such preparations are of a kind used in animal feeding. It may however be noted that Heading 23.09 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 churned to be animal feed supplements, it may be necessary to ensure that the said animal feed supplements are ordinarily or commonly known to the trade as products for specific use in animal feeding. According to the Board, the preparation containin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent's contention for ignoring any type of reference to technical literature, On a commutative reading of the record, we reply in the affirmative. We certainly also take into consideration the principles laid down by the Hon ble Supreme Court in the Sun Exports Corporation s case. There is a treasure of valuable wealth placed on record by the Appellants to support the view that preparations in dispute are preparations squarely falling in those preparations given under Heading 23.09 of HSN which corresponds to Heading 23.02 of CETA, 1985. We feel that Explanatory notes to the HSN are representative and symbolic of the common trade parlance and these notes particularly those under Heading 23.09 also throw light on the question that pre-mixes including those containing mineral substances and vitamins or provitamins, trace elements, appetisers, soya flour or meal, yeast, etc. are covered by it. We think that the test laid down by the Hon ble Bombay High Court in the case of Chemical Fibres [1982 E.L.T. 917] is a safer and reliable test where the evidence of trade usage is not beyond doubt, then a reference to technical literature cannot be precluded. In regard to Niger Seed/Rice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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