ORDER
G.A. Brahma Deva, Member (J)
1. This appeal arises out of and is directed against the Order-in-Original dated 7-3-1994 passed by the Collector of Customs, New Custom House, Bombay.
2. The point to be considered in this case is whether the goods “Prawn Feed Supplement” imported by the appellants are exempted in terms of Notification No. 17/93-Cus., dated 28-2-1993.
3. The relevant Notification No. 17/93-Cus. is as follows :-
“Effective rate of duty for prawn feed and fish meal. – In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts prawn feed falling under sub-heading No. 2301.20 or 2309.90 and fish meal falling under sub-heading No. 2301.20 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate of 15% ad valorem.
{Notification No. 17/93-Cus., dated 28-2-1993S.”
4. Shri V.S. Nankani, learned Advocate appearing for the appellants submitted that the appellants imported Prawn Feed Supplement as can be seen from the Bill of Entry dated 19-8-1993. He admitted that the goods, Prawn Feed Supplement is different from Prawn Feed. But there is no dispute as regards classification of the goods since they fall under Tariff Heading 2309.90. Referring to the Tariff Entries 23.01 and 23.09, he said that Heading 23.01 covers flours, meals and pellets, of meat or meat offal, of fish or crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption; greaves and sub-heading 2301.20 covers flour, meals and pellets, of fish or of crustaceans, molluscs or other aquatic invertebrates whereas Heading 23.09 covers preparation of a kind used in animal feeding and sub-heading 2309.10 covers dog or cat food, put up for retail sale and Heading 2309.90 covers ‘other’ respectively. He said that Notification exempts ‘Prawn Feed’ falling under sub-heading 2301.20 or 2309.90 and accordingly Prawn Feed used in Notification is only qualifying and in substance items falling under Heading 2301.20 or 2309.90 are exempted in terms of Notification as the Notification is unconditional one. He contended that since the goods had been classified under Tariff Pleading 2309.90, there is no justification for denying the benefit in terms of Notification, Notification cannot be read in isolated manner to deny the benefit and if it is denied it would render that part of the Notification which refers to Tariff Heading 2309.90 as redundant and no notification can be interpreted so as to render a part of it redundant. He said that as can be seen from the tariff entries, Prawn Feed is classifiable under sub-heading 2301.20 and accordingly no other item except Prawn Feed Supplement is classifiable under sub-heading 2309.90 as ‘other’. He also referred to the explanatory notes in HSN under Heading 2309 where preparation for use in making complete feed or supplementary feed known in the trade as ‘pre-mixes’ are also classifiable under Tariff Heading 2309. He said that technical opinion of the Deputy Chief Chemist also confirms that the goods in question have the essential characteristics of ‘pre-mixes’. He contended that expression ‘Prawn Feed’ referred to in the notification includes Prawn Feed Supplement and intention of the notification is not only to exempt Prawn Feed falling under Tariff Item 2301.20 but also Prawn Feed Supplement falling under Heading 2309.90 referring to the decision in the case of Jain Engineering Co. v. Collector of Central Excise, Bombay -1987 (32) E.L.T. 3 (SC), and particularly in support of his contention that Prawn Feed Supplement is covered by the term ‘Prawn Feed’ he relied upon the decision in the case of Glindia Ltd. v. Union of India reported in 1988 (36) E.L.T. 479 (Bombay) as well as the decision of the Tribunal in the case of Collector of Central Excise, Chandigarh v. Punjab Bone Mills – 1988 (38) E.L.T. 389 (Tribunal) wherein it was held that animal feed supplement is covered by the term ‘animal feed’ and eligible for exemption under Notification No. 55/75-C.E., dated 1-3-1975 even prior to inclusion of specific item ‘animal feed supplement’ in the Notification No.. 55/75-C.E. by amending Notification 6/84-C.E., dated 15-2-1984.
5. While countering the arguments, Shri P.K. Jain, learned SDR for the Revenue submitted that the only point to be considered in this case is with reference to eligibility of exemption under Notification 17/93 in respect of the commodity imported by the appellants. Admittedly the appellants imported Prawn Feed Supplement and not Prawn Feed as such. Prawn Feed is different from Prawn Feed Supplement and even in commercial parlance they are understood as different commodity since they are not one and the same. He said that 2309.90 – ‘other’ covers only Prawn Feed Supplement is not correct as argued by the other side. But it covers not only supplementary feed but also complete feed and in support of his contention he referred to the Entry 23.09 as appeared in page 175 of Explanatory Notes (HSN). The relevant Heading is as under :-
"23.09 Preparations of a kind used in animal feeding.
2309.10 - Dog or cat food, put up for retail sale
2309.90 - Other
This heading covers sweetened forage and prepared animal feeding stuffs consisting of a mixture of several nutrients designed :
(1) to provide the animal with a rational and balanced daily diety (complete feed);
(2) to achieve a suitable daily diet by suplementing the basic farm-produced feed with organic or inorganic substances (supplementary feed); or
(3) for use in making complete or supplementary feeds.
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, for example, in the case of products obtained from vegetable materials, those which have been treated to such an extent that the characteristic cellular structure of the original vegetable material is no longer recognisable under a microscope.”
He said that the decisions referred to by the other side in the case of Glindia Ltd. as well as in the case of Punjab Bone Mills are not applicable to the facts of this case as it was held with reference to Notification No. 55/75 amended by Notification 6/84 which had undergone various changes and in the context of that Notification it was held that animal feed includes animal supplement.
6. We have carefully considered the arguments advanced on both sides and perused the records including citations. It is clear from the wordings of the Notification 17/93 that it exempts Prawn Feed falling under sub-heading 2301.20 or 2309.90. We are not convinced with arguments advanced on behalf of the appellants that only supplementary feed is falling under Heading 2309.90 and not any other item. On going through the Heading 23.09 in the Explanatory Notes (HSN), it is clear that heading covers not only supplementary feed but complete feed, supplementary feed and for use in making complete feed or supplementary feed and the latter item was imported by the appellants as it was rightly argued by the Departmental Representative. It is settled law that Notification should be construed strictly and the benefit cannot be extended to the item which is not specifically mentioned therein. The Collector in his order correctly observed that Notification requires two conditions to. be satisfied i.e. that the goods should be classifiable under Tariff Heading 2309 and they must be Prawn Feed to be eligible for benefit of exemption under the said Notification in denying the benefit of exemption in terms of Notification No. ’17/93 as per wordings. Since the issue has been rightly considered, we do not find any infirmity in the impugned order in denying the benefit of exemption in terms of aforesaid Notification. Accordingly we uphold the impugned order by dismissing appeal filed by the party.
Sd/-
(G.A. Brahma Deva)
Dated 3-5-1995 Member (J)
K. Sankararaman, Member (T)]
7. I have very carefully gone through the order recorded by my learned Brother, Shri G.A. Brahma Deva. As I do not agree with the conclusion drawn by him that the benefit of exemption under Notification 17/93, dated 28-2-1993 is not admissible to the appellants, 1 am recording my separate dissenting order.
8. It was the case of the learned Counsel for the appellants, Shri VS. Nankani that as the aforesaid notification exempts Prawn Feed falling under sub-heading No. 2301.20 or 2309.90, the benefit of exemption would cover not only Prawn Feed but Prawn Feed Supplement also. The former sub-heading would cover, according to him, Prawn Feed proper while the latter sub-heading would cover Prawn Feed Supplement. Any other interpretation, according to him, would render the specific mention of sub-heading 2309.90 redundant and nugatory. This contention was controverted by Shri P.K. Jain, learned Senior Departmental Representative by stating that the latter sub-heading would cover Prawn Feed as well as Prawn Feed Supplement but the benefit of exemption is, however, limited to only Prawn Feed. Since, as admitted by the learned counsel himself, the two items, namely, Prawn Feed and Prawn Feed Supplement are different products, the benefit of exemption will extend only to Prawn Feed which is the item specified in the notification. In support of his contention Shri Jain referred to the Notes under Heading 23.09 in the HSN, relevant extracts of which he made available. He referred to the test report of the material in question and submitted that it is in the nature of premixes. These extracts of the Notes under Heading 23.09 in the HSN have been reproduced in para 5 of Shri G.A. Brahma Deva’s order. I agree with his finding that the contention of the learned counsel for the appellants that sub-heading 2309.90 is limited to only Prawn Feed Supplement and would not cover Prawn Feed proper and that such Prawn Feed itself would stand covered by the sub-heading 2301.20 is not correct. This sub-heading 2301.20 covers flours,’ meals and pellets of fish or of crustaceans, molluscs or other aquatic invertebrates. Thus the Prawn Feed which is covered in the exemption notification with reference to this classification will be only of the type mentioned in this sub-heading. Other types of Prawn Feed from other sources (not specified in 2301.20) will fall under 2309.90. In that view of the matter, there is no merit in the contention raised by the learned counsel that because the latter sub-heading is also included in the exemption notification that will apply to Prawn Feed Supplement only. I reject this contention of the learned counsel.
9. The above decision of mine does not, however, lead to the conclusion that 2309.90 does not cover Prawn Feed Supplement. This would become clear on a perusal of the Notes in the HSN under the said sub-heading. According to these Notes which are equally applicable to the customs tariff as the wording therein is exactly as per the wording of the corresponding HSN entry the Heading 23.09 covers Sweetened Forage and prepared animal feeding stuff consisting of a mixture of several nutrients designed, inter alia, to achieve a suitable daily diet by supplementing the basic farm produced feed with organic or inorganic substances (supplementary feed). The further explanation of the entry, “other preparations” as given in the HSN Notes is extracted below :-
“(II) OTHER PREPARATIONS
(A) PREPARATIONS DESIGNED TO PROVIDE THE ANIMAL WITH ALL THE NUTRIENT ELEMENTS REQUIRED TO ENSURE A RATIONAL AND BALANCED DAILY DIET (COMPLETE FEEDS)
The characteristic feature of these preparations is that they contain products from each of the three groups of nutrients described below :
(1) “Energy” nutrients, consisting of high carbohydrate (high calorie) substances such as starch, sugar, cellulose and fats, which are “burned up” by the animal organism to produce the energy necessary for life and to attain the breeders’ aims. Examples of such substances include cereals, half sugar mangolds, tallow, straw.
(2) “Body-building” protein-rich nutrients or minerals. Unlike energy nutrients, these nutrients are not “burned up” by the animal organism but contribute to the formation of animal tissues and of the various animal products (milk, eggs, etc.). They consist mainly of proteins or minerals. Examples of the protein-rich substances used for this purpose are seeds of leguminous vegetables, brewing drugs, oil-cake, dairy byproducts.
The minerals serve mainly for building up bones and, in the case of poultry, making egg-shells. The most commonly used contain calcium, phosphorus, chlorine, sodium, potassium, iron, iodine, etc.
(3) “Function” nutrients. These are substances which promote the assimilation of carbohydrates, proteins and minerals. They include vitamins, trace elements and antibiotics. Lack or deficiency of these nutrients usually causes disorders.
The above three groups of nutrients meet the full food requirements of animals. The mixing and proportions depend upon the animal production
(B) PREPARATIONS FOR SUPPLEMENTING (BALANCING) FARM PRODUCED FEED (FEED SUPPLEMENTS)
Farm produced feed is usually rather low in proteins, minerals or vitamins. The preparations devised to compensate for these deficiencies, so as to ensure a well-balanced animal diet, consist of proteins, minerals or vitamins plus additional energy feeds (carbohydrates) which serve as a carrier for the other ingredients.
Although qualitatively, these preparations have much the same composition as those described in paragraph (A), they are distinguished by a relatively high content of one particular nutrient. This group includes.
(1) Fish or marine mammal solubles in liquid or viscous solutions or in paste or dried form, made by concentrating and stabilising the residual water (Containing water-soluble elements, viz proteins, vitamins B salts, etc.) and derived from the manufacture of fish or marine mammal meal or oil. (2) Whole green leaf protein concentrate and green fraction leaf protein concentrate, obtained from alfalfa lucernel) juice by heat treatment."
It would thus be seen from the scope of Heading 23.09 in the HSN which is equally applicable to the corresponding entry in the Customs Tariff with which, we are concerned, that the latter covers not only animal feed but animal feed supplement also. That would, however, leave for decision the other question raised by the learned SDR that while Tariff sub-heading 2309.90 would cover both prawn feed and prawn feed supplement, the exemption notification is, however, restricted to only prawn feed. It was on this [scope] (Sic.) that the benefit of exemption has been denied to the material imported which is admittedly prawn feed supplement. This question, however, stands resolved by two High Court decisions with reference to the entry animal feed which appeared in Notification No. 55/75 covering the then existing Central Excise Tariff Item 68.
10. The judgment of the Bombay High Court in Glindia Limited v. Union of India reported in 1988 (36) E.L.T. 479 (Bom.) had been relied upon by the learned Counsel for the appellants for his preposition that the term Prawn Feed would itself cover Prawn Feed Supplement also. He had also cited a Tribunal decision in the case of Collector of Central Excise v. Punjab Bone Mills reported in 1988 (38) E.L.T. 389. In the former case decided by Honourable Bombay High Court, it was held that animal feed concentrate are animal feed and in the same manner products which supplement animal feed and are generally added to animal feed are also covered by the generic term animal feed. Para 8 of the High Court judgment is extracted below :-
“8. It was submitted by the respondents that the subsequent amendment expressly refers to “animal feed supplements”. This suggests that animal feed supplements were not previously included in the exemption notification. This reasoning must be rejected. The amendment appears to be clarificatory in nature. For example, the amendment now expressly refers also to animal feed concentrates which were not expressly referred to earlier. It cannot be said that animal feed concentrates are not animal feed, to the same manner products which supplement animal feed and are generally added to animal feed are also covered by the generic term “animal feed”.
11. There is another judgment on a related issue which is of the Honourable High Court of Gujarat in the case of Glaxo Laboratories India Limited v. The State of Gujarat reported in 1979 (43) STC 386. In that case the Court had examined the scope of the term cattle feed and poultry feed, in the context of whether vitamin blends could be considered as animal feed or poultry feed. Relevant observations of the High Court, which are extracted in the Tribunal decision in Collector of Central Excise, Chandigarh v. Punjab Bone Mills, which was the second case relied upon by Shri Nankani are reproduced below :-
“The foregoing discussion would show that on a true and correct interpretation of the words ‘cattle-feed’ and ‘poultry-feed’, those terms must include not only that foods which is supplied to domestic animals or birds as an essential ration for the maintenance of life but also that feed which is supplied over and above the maintenance requirements of growth or fattening and for production purposes such as for reproduction, for production of milk, eggs, meat, wool or feathers and, in the case of animals, also for efficient output of work. In addition to roughages, that have a high value because they are rich in easily digested nutrients and feed supplement. Amongst the feeds which are considered essential for the proper nutrition of animals and birds, which are to be kept in a state of efficient production, are included vitamins and, morel particularly, vitamins A & D, which have been found to have a profound effect upon live-stock farming by increasing the efficiency of animal production and preventing serious nutritional disease. Vitamin-A, which is required for growth, reproduction, production and even for maintenance and Vitamin D, which is needed to enable the animal to assimilate and use either important elements of its feed, are most apt to be lacking in natural live-stock feeds and that they are included as additives in mixed feeds so as to make good the deficiency.
Against this background, let us now turn to the products in question and ascertain what their properties are. At serial Nos. (1) and (2) are items cattle-feed. According to the literature pertaining to those products, which is on record, Vitablend ADS [Serial No. (1) consists of Vitamins A and D3 enveloped in a protective gelatin-glucose matrix as uniform beadlets. It is used in cattle breeding programme for cows and buffaloes. It is also used to preserve the reproductive efficacy of the bulls and as essential feed of calves. Vitablend AD 3 Forte [SI. No. (1)] is the same thing as Vitablend ADS, but in more concentrated form. Products Nos. (3) and (4) are items of poultry feed. According to the literature pertaining to these products, which is on record, Vitablend AD 2D 3 consists of vitamins A, 132 and D3 enveloped in a gelatin-glucose matrix in the form of minute beadlets and it is used as a carefully blended and properly balanced feed for growth of healthy profitable birds. It has to be mixed in the feeds, either mechanically or manually and thereupon the granules will disperse easily and evenly. Vitablend WM Forte is the liquid feed supplement of Vitamin A. It is mixed with drinking water for increasing resistance through better nutrition, improved health, increased production and to avoid production slumps and blood spots in the eggs. It consists of Vitamin A only in a concentrated form. In our opinion, having regard to the meaning which we have assigned to the words ‘cattle feed’ and ‘poultry-feed, these products would necessarily fall with the converage of the concerned appropriate term”.
The aforesaid findings of the Honourable Gujarat High Court were followed by the Tribunal in the said case for holding that Di-calcium phosphate which was of animal feed grade and given in small quantities mixed in the total feed given to the animals was eligible for benefit of exemption, under Notification 55/75 application to “animal feed”. Paras 10 and 11 of the Tribunal decision are extracted below :-
* * * * * * *
12. Though the Bombay High Court decision and the Tribunal decision were in the context of Central Excise exemption Notification No. 55/75 for animal feed falling under Tariff Item 68 of the Central Excise Tariff and had taken note of the fact that the aforesaid exemption notification was amended subsequently to provide specifically for animal feed supplement also in addition to animal feed proper, the ratio of the decisions will apply to the present case also. It was held in these decisions that the amendment introducing the entry animal feed supplement in the parent notification would have retrospective effect as it was [clarificatory] in nature. As had been held by the Bombay High Court in the former case, even the unamended entry “animal feed” itself covered animal feed supplement. To the same effect were the observations of the Honourable Gujarat High Court in the sales tax case decided by them. It is noteworthy that in this case they were not concerned with any amendment of the original entry expanding its scope. What fell for decision in that case was the scope of the entries cattle feed and poultry feed. The same view taken by the Courts would hold good in the present case also. In that view of the matter, the expression Prawn Feed referred to in the exemption notification in question would cover Prawn Feed Supplement also which undoubtedly falls within sub-heading 2309.90. Accordingly I hold that the appellants are entitled to the benefit of the exemption notification in question.
Sd/-
(K. Sankararaman) Dated 9-6-1995
Member (T)
DIFFERENCE OF OPINION
13. In view of the aforesaid difference of opinion between the Judicial Member and the Technical Member, the matter is submitted to the Honourable Vice President (I/C) for referring the question to a Third Member for resolution of the difference on the following question :-
“Whether the product imported by the appellants Animal Prawn Feed Supplement is eligible for the benefit of exemption Notification No. 17/93-Cus., dated 28-2-1993 as held by the Technical Member or the said exemption is not admissible as held by the Judicial Member.”
Sd/- Sd/-
(G.A. Brahma Deva) (K. Sankararaman)
Member (J) Member (T)
Dated 12-6-1995 Dated 9-6-1995
14. [Order per : R. Jayaraman, Member (T)]. - Under Misc. Order No. 225/95-D, dated 12-6-1995, the following point of difference of opinion has been referred to the third Member.
"Whether the product imported by the appellants 'Animal Prawn Feed Supplement' is eligible for the benefit of exemption Notn. No. 17/93-Cus., dated 28-2-1993 as held by the Technical Member or the said exemption is not admissible as held by the Judicial Member."
15. Heard Shri VS. Nankani, the Id. Advocate on behalf of the appellants and Shri K.M. Moncial, the lei. SDR on behalf of the Department. The following are the rival contentions pleaded during the hearing.
16. Shri Nankani's main tenets of arguments are as below :
(i) It is not disputed by him. that Prawn Feed Supplement is a component of prawn feed and it is a premix for preparation of prawn feed. He refers to the opinion of Dy. Chief Chemist in this regard.
(ii) If the intention is to cover only prawn feed per se, there is no need to specify in the Notn, prawn feed falling under 2301.20 and 2309.90. Prawn feed is covered under Heading 2301.20. Heading 23.09 covers all preparations of a kind used in animal feeding and 2309.90 seeks to cover ‘others’ – other than dog or cat food put up for retail sale. Because of specifying both the tariff headings after prawn feed, the legislature seeks to cover prawn feed as also something more than prawn feed, which would be covered by Heading 2309.90. Legislature cannot be presumed to use words resulting in tautology. By specifying both Headings 2301.20 and 2309.90, something more than the prawn feed is sought to be covered.
(iii) Referring to the judgment of Bombay High Court in the case of Glindia -1988 (36) E.L.T. 479 (Bombay) and Gujarat High Court judgment in a sales tax case reported in 1979 (43) STC, he would plead that both the High Courts have given meaning to cattle feed, animal feed and poultry feed by holding that such feed would cover feed supplement also. Hence, even if a strict interpretation is taken on the term ‘prawn feed’, going by these judgments, the term ‘prawn feed’ would cover prawn feed supplement. Though these judgments are not in the context of the present notification under consideration, they have a greater significance, viewed in the context of HSN 2309 seeking to cover both complete feed and feed supplement. There is nothing to exclude prawn supplement provided for in the notification. Hence, there is no ambiguity in the Notn. for taking a view favourable to the Revenue.
17. Shri K.M. Mondal, the Id. SDR’s main contentions are as below :
(i) There is no dispute from the other side that prawn feed supplement is only a component of prawn feed and not prawn feed itself. It is also not disputed that it is a premix for preparation of prawn feed. Hence, in the context of this admitted position, wording in the Notn. in question is to be looked into. Notn. specifies only prawn feed falling under subheading 2301.20 or 2309.90. Prawn feed would fall for classification. under both sub-headings. It is not for including prawn feed supplement. The Id. advocate’s argument that it cannot be presumed that the legislation have resorted to using words amounting to tautology, has no significance, viewed in the following context.
(ii) When both the sub-headings seek to cover prawn feed and the legislative intention is to give exemption only to prawn feed, it is necessary to specify both the sub-headings and on that ground, it cannot be accepted that because sub-heading 2309.90 is specified, even prawn feed supplement would came under its sweep nor can it be construed that something more is contemplated in the exemption.
(iii) leading the notification in the manner as pleaded by the Id. advocate is not in accordance with the settled law on the subject. The Supreme Court in several decisions have held that exemption is an exception to the levy and in the case of an exception wordings are to be construed strictly, as they are and words cannot be imported. In this case, acceptance of the Id counsel’s arguments would lead to read ‘prawn feed supplement’ also in the purview of the notification. What was not sought to be included for exemption, need not be specifically excluded.
(iv) Illustrating his point, by way of an example, if ‘cereals’ are covered by a sub-heading – and only wheat is mentioned in the exemption, it cannot be pleaded that rice also being a cereal would qualify for exemption because it is grouped in the same sub-heading or tariff item, Likewise, wheat flour or maida cannot be held to be eligible for exemption.
(v) Even presuming that two views are possible on the scope of the term ‘prawn feed’, benefit of ambiguity would go in favour of Revenue, as held by the Supreme Court in the case of Novopan India Ltd. reported in 1994 (73) E.L.T. 769 (SC).
(vi) Hence, when the notification seeks to cover only prawn feed falling either under sub-heading 2301.20 or 2309.90, and the plain and strict reading of the notification does not allow inclusion, of prawn feed supplement, there is no question of including it in the exemption, merely based on the interpretation given by Bombay and Gujarat High Courts in some other context. Those decisions do not say nor cannot say that wherever ‘animal feed’ is figuring in any statute it should be deemed to cover animal feed supplement. Even if a doubt arises in. view of these judgments, benefit of ambiguity should go to the State, because exception to levy has to be extended to those clearly covered by the exemption notification and not to those, who try to avail of the ambiguity. Hence, the principle emphasised in the case of Novopan India Ltd. by the Supreme Court followed by it in yet another judgment in the case of Liberty Oil Mills – 1995 (75) E.L.T. 13 (SC) should be adopted in this case also.
18. Shri V.S. Nankani, the Id. advocate reiterates that there is no ambiguity in this case, if one goes by the interpretation of ‘animal feed’ given by Bombay and Gujarat High Courts in regard to taxing provision. In the case of Bombay High Court judgment, it is given in the context of an exemption notification only. Hence such an interpretation of the term ‘animal feed’ as. including animal feed supplement cannot leave any ambiguity, for giving the benefit of ambiguity to the State.
19. Before analysing the rival contention from both the sides, I must put in a word of appreciation by saying that both the sides have provided me delicious and appetising food (or shall I say, in this case, ‘feed’) for thought and not a mere ‘supplement’ to the feed, provided to the original refering Bench.
19.1 Notification No. 17/93-Cus., dated 28-2-1993 exempts “prawn feed falling under sub-heading 2301.20 or 2309.20 and fish meal falling under subheading 2301.20.” On a plain and straight reading of this notification, it would appear that prawn feed falling either under sub-heading 2301.20 or 2309.90 would qualify for exemption. On going through HSN 23.09, it is observed that it not only covers preparations for supplementing (balancing) farm produced feed but also preparations for use in making the complete feeds or supplementary feeds and also complete feeds. HSN 2301 seeks to cover flour, meals and pellets of meat or meat offal of fish or crustaceans or molluscs or other aquatic invertebrates, unfit for human consumption; greaves. In the context of the. above position, I am unable to accept the contention of the Id. counsel Shri Nankani, that by including 2309.90 the notification seeks to extend the scope of exemption to prawn feed supplement; because complete feeds of different kinds are covered by both the sub-headings. Hence, if the intention is to cover ‘prawn feed’ irrespective of whether it falls under 2309.90 or 2301.20, it ought to specify both the headings. That cannot give room for presuming that something more than prawn feed is being given in the Notification.
19.2 There is no need to presume tautology if we read the HSN for 23.01 and 23.09 together. I would, therefore, accept the plea of Shri Moneial, that prawn feed, being covered by both the headings, in order to give effect to the exemption being extended to prawn feed, irrespective of its classification being under 2301,20 or under 2309.90, both the sub-headings have to be specified. That cannot lead me to a conclusion that something more than prawn feed is to be given exemption.
19.3 But then, the Id. counsel Shri Nankani pleads that going by the meaning given to animal feed by the two High Courts, there is no escape from holding that prawn feed would also include prawn feed supplement. Hence, I would like to go into these two judgments elaborately. In the case of Glindia Ltd. -1988 (36) E.L.T. 479 (Bom.), Bombay High Court mainly relied on the decision of the Gujarat High. Court in Glaxo Laboratories case reported in 1979 (43) Sale Tax Cases 386. In that case decided by the Gujarat High Court, the question of classification of certain vitamin products used for supplementing cattle and-poultry feed fell for consideration. It was held by the Gujarat High Court that the terms ‘cattle feed’ and ‘poultry feed’ must include not only that food, which is supplied to domestic animals or birds, as essential ration for the maintenance of life, but also the feed, which is supplied over and above the maintenance requirements for growth or for fattening or for production purposes such as reproduction, for production of milk, eggs, meat etc. The same reasoning has been adopted by the Bombay High Court in the case of Glindia for construing the term ‘animal feed’ in the Notn. No. 55/77 prior to its amendment by Notn. No. 6/84-C.E., dated 15-2-1984, while taking this view, Bombay High Court rejected the contention of the Revenue that the amendment can be effective only prospectively. In that context, the Bombay High Court (vide para 8) observed that the amendment is clarificatory in nature and that products, which supplement animal feed and are generally added to animal feed are also covered by the term ‘animal feed’. On. a plain reading of the two judgments, one might be tempted to agree with Shri Nankani that both, the High. Courts have given an interpretation for the term ‘animal feed’ so as to include animal feed supplement. But then,, both the judgments did not have an occasion to consider the term ‘animal feed’ or in this case ‘prawn feed’ falling under either of the two sub-headings 2301.20 and 2309.90, out of which one would cover prawn feed and the other covering prawn feed as also supplements or premixes. I would not like to be carried away only by this razor edge distinction, but for the fact that both the above two High Courts had no occasion to take into account the decision of the Supreme Court in the case of Novopan.
19.4 Hence, it would be incumbent on me to go into the decision of the Supreme Court in the case of Novopan reported in 1994 (73) E.L.T. 369 (SC) for considering whether the principle enunciated could be applied in this case, notwithstanding the interpretation given by the Bombay High Court and Gujarat High Court. In the case of Novopan India Ltd. the Supreme Court had to consider the question whether unveneered particle board specified in Central Excise Exemption Notn. No. 55/79 would also cover Malamine faced particle boards. The Supreme Court was presented with an argument that according to Encyclopaedia Britanica, particle board may be covered with resin integrated paper, plastic or other finishes. It was pleaded that Malamine faced plastic boards would also be covered by the description ‘unveneered particle boards’. The Supreme Court rejected the contention that in commercial parlance, unveneered particle boards are different from melamine faced particle board and that lamination takes place in situ and particle board in a marketable condition does not come into existence.
The Supreme Court approvingly quoted its earlier observation in Plasmac Machine Manufacturing Co. Pvt. Ltd. v. CCE, Bombay reported in 1991 (51) E.L.T. 161 (SC) to the effect that it is well-settled that the commercial meaning has to be given to the expression in tariff items. Where definition of a word has not been given, it must be construed in its popular sense. Popular sense means that sense which people conversant with the subject matter, with which the statute is dealing, would attribute to it. Going by the principle, the Supreme Court held that nobody in trade circle or in the market would consider both the products as one and the same. In para 14 of this judgment, the relevant principle adopted in Mangalore Chemicals & Fertilizers v. Dy. Commissioner of Commercial Taxes & Ors reported in 1991 (55) E.L.T. 437 (SC) was approvingly quoted as below :
“Shri Narasimhamurthy again relied on certain observations in CCE v. Park’ Exports (P) Ltd. 1989 (1) SCC 345, in support of strict construction of a provision concerning exemptions. There is support of judicial opinion to the view that exemptions from taxation have a tendency to increase the burden on the other unexempted class of tax payers and should be construed against the subject in case of ambiguity. It is an equally well known principle that a person who claims an exemption has to establish his case. Indeed, in the very case of Parle Exports (P) Ltd. relied upon by Shri Narasimhamurthy, it was observed :
“While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoided.”
The choice between a strict and a liberal construction arises only in case of doubt in regard to the intention of the legislature manifest on the statutory language. Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute. If the words are plain and clear and directly convey the meaning, there is no need for any interpretation. It appears to us the true rule of construction of a provision as to exemption is the one stated by this Court in Union of India v. Wood Paper Ltd. 1990 (4) SCC 256:
“… Truly speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification, then full play should be given to it and it calls for a wider and liberal construction …”
19.5 When this principle approved by the Supreme Court is to be applied to the present case, I find that there is no dispute that prawn feed is different from prawn feed supplement, apart from distinction in HSN and even going by the commercial parlance. It is not disputed that prawn feed supplement is only a component or premix of prawn feed and not prawn feed itself. In the case of malamine faced particle board, the major component is the core of particle board, which is laminated in situ with particles mix. Even then going by the test of commercial parlance and noticing that they are two distinct products, the Supreme Court held that exemption given to unveneered particle board cannot be given to Malamine faced particle board. On the same analogy; prawn feed supplement, which is only a component of prawn feed cannot be equated with prawn feed referred to in the Notification. When the description itself blocks its entry into the notification, where a strict view is to be adopted, there is no scope for adopting a liberal view to include prawn feed supplement to give effect to the Notification. No material has been brought before me that it was the intention of the Government to give benefit to prawn feed supplement also, as is reflected from any subsequent amendment to the Notification, so that going by the amendment, it can be held to be clarificatory having regard to the Government’s intention. A person claiming exemption must clearly establish that he is covered by the said provision. He cannot enter into exemption, where his argument is based on possibility or ambiguity. The Supreme Court observed that in such a case, benefit of ambiguity should go to the State. Following this principle, it appears to me inevitable that ‘prawn feed’ referred to in the notification cannot extend to another distinct commercially known item ‘prawn feed supplement’ unless expressly included.
19.6 In the result, I agree with the order recorded by the Id. Judicial Member, in preference to the one, proposed by the Id. Technical Member. The papers may be put up by the Registry to the referring Bench for deciding on the appeal finally.
Sd/-
(R. Jayaraman)
Dated : 12-1995 Member (T)
20. In view of the majority opinion, the appeal is dismissed.