Avanti Feeds Limited Vs Commissioner of Customs (CESTAT Chennai)
CESTAT Chennai held that ‘Squid Liver Powder’ being a high-quality feed ingredient for aqua feed and all type diet for animals, the product which is not for exclusive use for fish, prawn etc. has been correctly classified under CTH 23099090.
Facts- The issue involved is one related to the classification of ‘Squid Liver Powder’. Squid Liver Powder is a raw material used in the manufacture of shrimp feed formulation and is derived from internal organs of squid. The supplier in their website have stated that the product is made from fresh by-product of squid and consists of squid liver paste 50% and the well-fine soyabean meal 50%. While the appellants claim the classification of the goods under Customs Tariff Heading (CTH) 2301 2011, the same was reclassified by the department under CTH 2309 9090 and duties were demanded accordingly.
Commissioner (A) confirmed the orders of the lower authorities. Being aggrieved, the present appeal is filed.
Conclusion- We find that CTH 230120 preferred by the appellants covers ‘flours, meals and pellets, of fish or of crustaceans, molluscs or other aquatic invertebrates’. The heading does not cover products containing ingredients of plant origin. Since ‘squid liver powder’ contains a mix of ingredients both of molluscs and plant origin, from a plain reading of the heading, squid liver powder does not fall under the heading.
A plain reading of the Customs Tariff the classification of squid liver powder under 2309 also satisfies the relevant notes (A) and (C) of II ‘Other Preparations’ given in the HSN, extracted above. Hence squid liver powder merit classification under the CTH 2309. Since the product is described as being a high-quality feed ingredient for aqua feed and all type diet for animals, the product which is not for exclusive use for fish, prawn etc. has been correctly classified under CTH 23099090.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The issue involved is one related to the classification of ‘Squid Liver Powder’. Squid Liver Powder is a raw material used in the manufacture of shrimp feed formulation and is derived from internal organs of squid. The supplier in their website have stated that the product is made from fresh by-product of squid and consists of squid liver paste 50% and the well-fine soyabean meal 50%. While the appellants claim the classification of the goods under Customs Tariff Heading (CTH) 2301 2011, the same was reclassified by the department under CTH 2309 9090 and duties were demanded accordingly. Aggrieved by the orders of the lower authorities, the appellants have taken up the matter before the Commissioner (Appeals) who vide Order in Appeal C. Cus. No. 664/2013 dated 4.4.2013 and Order in Appeal C. Cus. No. 846 to 849/2013 dated 20.6.2013 (impugned orders) confirmed the orders of the lower authorities. Aggrieved by the impugned orders, the appellants are before the Tribunal.
1.1 No cross-objections have been filed by the department.
2. We have heard Shri B.V. Kumar, learned counsel for M/s. Avanti Feeds Ltd. and Shri Rohan Muralidharan, learned counsel for M/s. Godrej Agrovet Ltd. We have also heard Shri R. Rajaraman and Shri S. Balakumar, learned Assistant Commissioners (AR) for the department.
3. The learned counsel Shri B.V. Kumar for M/s Avanti Feeds Ltd. has stated that the department has relied upon the test report dated 22.1.2010 which did not pertain to them. Further, the copy of the said report was also not given to the appellant. This amounts to gross violation of principles of natural justice. He stated that the appellant submits that squid liver powder is manufactured from the Viscera, Skin and Eyes of squid which belongs to the family of Cephalopods of Phylum molluscs. The viscera of squid is rich in amino acids, minerals vitamins etc. and therefore it forms a good constituent for poultry and aqua feed. The squid liver is cooked at 70 degrees centigrade for 30 minutes and oil is separated for further refining. From the resultant squid water soluble, water is evaporated and soyabean meal is added. The mixture is dried, cooled and grounded. Anti-oxidants are added for retention of freshness. The residual squid oil is found to contain a very large amount of unsaturated fatty acids. The squid liver soluble derived during the process is sticky and unless a carrier such as soya bean meals is mixed with it, squid liver powder cannot be extracted. The soyabean meal is preferred as a carrier compared to products such as rice bran for the reason that soya protein has a property of increased water solubility, emulsifying capacity, foaming properties towards oil and that is the reason why squid oil industry uses soyabean meal as a carrier and the resultant product is squid liver powder. The appellant after importation of squid liver powder mix the same with fish meal, wheat flour and soyabean meal along with minerals, vitamins and attractants to make an ideal blend of all nutrients essential for growth of the shrimp / prawn. The squid liver powder cannot by itself be used either as a complete prawn feed nor can it be used for human consumption. It is only one of the important raw materials for the manufacture of prawn / shrimp feed. The product composition given by the Hyundai Special Feed Ind. Co. Ltd. Korea shows the following composition:-
