2025 (3) TMI 585 - AT - Customs

Classification of imported Squid Liver Powder - to be classified under Customs Tariff Heading (CTH) 2301 2011 or under CTH 2309 9090? - request to keep the hearing and decision pending in the present Appeal. Request to keep the hearing and decision pending in the present Appeal - HELD THAT - Hon ble Supreme Court in UNION TERRITORY OF LADAKH ORS. Vs JAMMU AND KASHMIR NATIONAL CONFERENCE ANR 2023 (9) TMI 1407 - SUPREME COURT has laid down the position in law that Courts will proceed to decide matters on the basis of the law as it stands. It is not open unless specifically directed by the Apex Court to await an outcome of a reference or a review petition as the case may be. The matter is also proceeded which would also be advantageous to the appellant as they have raised an additional point of law. Imported product merit classification under CTH 2301 20 11 of the Customs Tariff Act 1975 or under CTH 2309 90 90 of the Customs Tariff Act 1975? - HELD THAT - The issue decided in the case of M/S. AVANTI FEEDS LIMITED AND M/S. GODREJ AGROVET LIMITED VERSUS COMMISSIONER OF CUSTOMS (IMPORT) CHENNAI 2023 (6) TMI 960 - CESTAT CHENNAI where it was held that the classification of the Squid Liver Powder has been correctly done under CTH 23099090 and hence the impugned orders are upheld. As the goods are a mixture it should be classified only by supplying essential character as mandated under Rule 3(b) or not? - HELD THAT - It is the appellants contention that the essential issue in the present Appeal is a classification dispute with respect to the item under import. In such view of the matter the General Rules of Interpretation of Tariff would have to be factored and taken into account for a correct decision. This cannot be done only with reference to Rule 1. Rule 3 should also be applied. As the goods are a mixture it should be classified only by applying essential character as mandated under Rule 3(b). As per the Rules classification of a product is required to be done based upon the major constituent of the product or which gives it the essential character. When the OIO and OIA relies only upon the Chemical Examiner report (which was not provided to the Appellant) and the earlier consignments cleared by the appellant under 2309 and on both these contentions the findings in the Final order are in favor of the Appellant the said order ought not to have upheld the / on some extraneous basis which were never part of the original or appellate proceedings below - when the data as per the appellants own documents was made the bed rock of the discussion they were not at a disadvantage and no fault could be found on the final discussion and decision on this score. Conclusion - i) The classification under CTH 2309 90 90 upheld. ii) The classification under CTH 2309 was clear based on the Customs Tariff and HSN making the application of Rule 3(b) unnecessary. There are no fresh merit in the averments made by the appellant - appeal dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The Tribunal considered the following core legal questions:

(A) Whether the hearing and decision in the present appeal should be kept pending until the resolution of a related case before the High Court of Madras.

(B) Whether the imported product, Squid Liver Powder, should be classified under Customs Tariff Heading (CTH) 2301 20 11 as claimed by the appellant.

(C) Whether the imported product falls under CTH 2309 90 90 as determined by the Revenue.

(D) Whether the classification of the goods should be determined by the essential character of the mixture under Rule 3(b) of the General Rules of Interpretation of the Tariff (GRI).

2. ISSUE-WISE DETAILED ANALYSIS

(A) Request to keep the hearing and decision pending

The Tribunal referred to the Supreme Court's decision in UNION TERRITORY OF LADAKH & ORS. Vs JAMMU AND KASHMIR NATIONAL CONFERENCE & ANR, which established that courts should decide matters based on the current law and not await outcomes from other pending cases unless specifically directed by the Apex Court. Thus, the Tribunal proceeded with the case, finding it advantageous for the appellant to address the additional point of law raised.

(B) Classification under CTH 2301 20 11

The appellant argued that Squid Liver Powder should be classified under CTH 2301 20 11, which covers flours, meals, and pellets of fish or crustaceans, molluscs, or other aquatic invertebrates. The Tribunal examined the Customs Tariff and noted that CTH 2301 20 11 does not cover products containing plant-origin ingredients. Since Squid Liver Powder contains both animal and plant-origin ingredients, it does not fall under this heading.

(C) Classification under CTH 2309 90 90

The Tribunal considered whether Squid Liver Powder should be classified under CTH 2309 90 90, which includes preparations used in animal feeding. The Tribunal noted that CTH 2309 covers products used in animal feeding, including feed ingredients that are not end products themselves. Squid Liver Powder, being a preparation used for aqua feed and animal diets, fits this classification. The Tribunal also referenced the Harmonized System Nomenclature (HSN) to support this interpretation.

(D) Application of Rule 3(b) of GRI

The appellant contended that the classification should be based on the essential character of the mixture under Rule 3(b) of GRI. The Tribunal found that Rule 3(b) applies only if classification under Rule 1 and 2 is ambiguous, which was not the case here. The classification under CTH 2309 was clear based on the Customs Tariff and HSN, making the application of Rule 3(b) unnecessary.

3. SIGNIFICANT HOLDINGS

The Tribunal upheld the classification of Squid Liver Powder under CTH 2309 90 90, aligning with previous decisions and the HSN. The Tribunal emphasized that products used in animal feeding, including feed ingredients, fall under this heading. The Tribunal rejected the appellant's arguments regarding the application of Rule 3(b) and the need to wait for the High Court's decision, citing legal precedents that support proceeding with the current law.

The Tribunal also addressed the appellant's reliance on previous classification practices and test reports, stating that wrong classifications cannot be perpetuated, and test reports not provided at the Show Cause Notice stage cannot be relied upon. The Tribunal found that the Revenue had effectively demonstrated the correct classification under CTH 2309.

Ultimately, the Tribunal rejected the appeal, affirming the classification under CTH 2309 90 90, and upheld the orders of the lower authorities.