TMI Blog2020 (7) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... only a nutritional supplement to the cattle feed and cannot be considered as cattle feed in isolation. The subject product is a complete animal feed supplement manufactured out of molasses mixed with 15 other ingredients to increase the nutrition value of the feed supplement. From the submissions made by the applicant and view of the above Chapter Notes, it is found that the subject product is nothing but prepared animal feed and therefore the same would fall under the said Chapter Heading 23.09 - the subject product has been rightly classified by the applicant under Chapter Heading 23.09 and the said product, falling under TSH 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST, attracts NIL rate as per Sr. No. 102 of Notification No. 02/2017 - Central Tax (Rate) dated 28.06.2017. Whether the goods falling under TSH 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST can be treated as waste of sugar manufacture, whether or not in the form of pellets under heading 2303 attracting 5% GST per Schedule I, Sr. No. 104 of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 or not? - HELD THAT:- The question is general in nature and does not appear to be connected to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in supply of Shatamrut Chyavan (hereinafter referred to, as the subject product) which is a complete animal feed supplement and is used as a supplementary product to increase the nutritional value of molasses. In other words, it is a nutrition supplement to the cattle feed but cannot be treated as cattle feed in isolation. 2.2 The Applicant has furnished a detailed plant drawing cum flow chart of the manufacturing process to understand how the subject product is produced out of sugarcane molasses and has stated that to manufacture the product, other than molasses, 15 other ingredients are also mixed in the molasses (input) to increase the nutrition value of the molasses. 2.3 Applicant has classified the subject product, till the date of application, under Chapter 2309 90 10, attracting NIL rate of GST. 2.4 Notification No. 2/2017 - C.T. (Rate) dated 28.06.2017, as amended, specifies GST rate schedules and classification of subject product under Schedule. Schedules applicable to the applicant s goods are as follows: List of Exempted Goods as per Notification No. 2/2017-C.T.(Rate) Sr.No. Chapter/Heading/ Sub-he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2302, 2304, 2305, 2306, 2308 and 2309 and supplied as cattle feed, shall attract 0% GST. 2.8 Applicant also submits that the very purpose of Sr. No. 104 (Schedule I) is to set aside the exemption (Sr. No. 102) under the Notification No. 2/2017 C.T. (Rate) dated 28.6.2017 attracting the NIL rate of GST. Hence, applicant has a belief that their product will attract 5% GST under Sr. No. 104 of Notification No. 1/2017 C.T. (Rate) dated 28.6.2017 (Sch. I). 2.9 Shatamrut Chyavan is attracting GST at 5% because the relevant entry of Sr. No. 102 of Notification No. 2/2017 C.T. (Rate) dated 28.6.2017 is a general entry for cattle feed having no nutritional value/base to cover subject product manufactured by the applicant. 2.10 Vide letter dated 22.01.2020, the applicant made further submissions with respect to the manufacturing process involved in making the impugned product and the proportion of raw materials/ingredients used. They have also stated that, to avoid fermentation of molasses, anti-fermenting agents are also added along with preservatives. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submissions made by the applicant is as under:- 3.1 The taxpay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se byproducts molasses bagasse are more valuable raw materials used in different manufacturing industries. In the process of manufacturing of sugar, bagasse emerges as residue / waste of sugarcane which is neither a manufactured product nor final product of sugarcane industry therefore classified under subheading 2303 20 00, as bagasse other waste of sugar manufacturing. In sugar manufacturing molasses is an intermediary product, or by product. It is not waste, as waste is never manufactured it only emerges in the manufacture of final product. Hence Molasses attracts specific rate of duty under Tariff Heading 1703 of 1000 of the GST Tariff. Though the major residual mixture of the subject product is molasses, it does not fall under Chapter No. 2309 90 10 therefore not treated as waste of sugar manufacture under Heading 2303. 04. HEARING Preliminary hearing in the matter was held on 17.12.2019. Shri Devendra Aathavle Advocate appeared and requested for admission of their application. Jurisdictional Officer Shri Abhijit Padekar, S.T.O. (C-012) Ahmednagar also appeared and made written submissions. The application was admitted and called for final hearing on 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieve a suitable daily diet by supplementing the basic farm produced feed with organic or inorganic substances (supplementary feed) and (3) for use in making complete or supplementary feeds. The Explanatory Notes further states that The Heading includes products of a kind used in animal feeding, obtained by processing vegetable or animal materials to such an extent that they have lost the essential characteristics of the original material . 5.3.4 The Explanatory Notes at (I) under Chapter 23.09 states that Sweetened Forage is a mixture of molasses or other similar sweetening substances (generally more than 10% by weight), with one or more other nutrients. It is used mainly for feeding cattle, sheep, horses or pigs. Besides being highly nutritive, molasses enhances the palatability off foodstuffs and thus extends the use of products of low nutritive value such as straw, cereal husks, linseed flakes and fruit pomace which the animals would otherwise be reluctant to accept. As a rule, these sweetened preparations are fed directly to the animals. However, some of them combine molasses with highly nutritive foods, such as wheat bran, palm kernel or copra, oil-cake, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld only cover residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste. 5.5 From the above discussions we observed that, while Chapter 23.03 covers only residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste, Chapter Fleading 23.09 specifically covers preparations of a kind used in animal feeding. 5.6 In view of the above, we hold that the subject product has been rightly classified by the applicant under Chapter Heading 23.09 and the said product, falling under TSH 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST, attracts NIL rate as per Sr. No. 102 of Notification No. 02/2017 - Central Tax (Rate) dated 28.06.2017. 5.7 The second question raised by the applicant is whether the goods falling under TSH 2309 90 10 of Customs Tariff Act, 1975 as adopted to GST can be treated as waste of sugar manufacture, whether or not in the form of pellets under heading 2303 attracting 5% GST per Schedule I, Sr. No. 104 of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 or not. 5.7.1 ..... 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