TMI Blog2001 (5) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... 055 is by the Company and appeal Nos. 2056 and 2057 are by Shri A.K. Dhanuka and Shri R.G. Agarwal respectively. 2.We have carefully examined the records. The material averments in the appeal memo are that M/s. Northern Minerals Ltd. (hereinafter referred to as 'the Company') were engaged in the manufacture of pesticides and insecticides falling under Chapter Heading 38.08 since 1980; that, besides such manufacture, the Company obtained from M/s. Samruddhi Farmachem Marketing Pvt. Ltd., (in short, Samruddhi) and M/s. Wockhardt Ltd. (in short, Wockhardt) a product viz. Biozyme (described as Bio-fertiliser) in bulk quantities (mainly 200 litre) under the brand names "Sampdazyme" and "Wokazim" respectively and repacked the same into smaller packings of 1000 ml, 500 ml, 180 ml, 90 ml and 30 ml and sold such packings under its own brand name "Dhanzyme"; that the bulk products supplied by Samruddhi and Wockhardt to the Company were classified under CSH 3101.00 and were chargeable to Nil rate of duty; that the Department had never proposed to change the classification of those goods; that the aforesaid activity of repacking the product supplied by Samruddhi and Wockhardt did not amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner in classifying the "Dhanzyme" brand goods under a Chapter Heading different from 31.01. Ld. Counsel, further, questioned the correctness of the reliance placed by the Commissioner on Chapter Note 2 of Chapter 38. That Chapter Note could be relied on for holding any activity of repacking of a bulk product to be "manufacture", only if the bulk product fell in Chapter 38. In the appellants' case, the bulk product was classified by Samruddhi and Wockhardt under Chapter 31 and not under Chapter 38 and such classification had the approval of the Department. It was without applying his mind to this aspect of the matter that the Commissioner placed the appellants' products under CSH 3808.20. Counsel further submitted that it was the Department's burden to show that the appellants' product was different from the bulk product supplied by Samruddhi and Wockhardt and had resulted from a manufacturing activity, but the Department did not successfully discharge that burden. There was not even any attempt on the part of the Department to rebut the appellants' contention that the Department had never proposed to revise the classification of Biozyme manufactured by Samruddhi and Wockhar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form its essential function (as a fertiliser) of promoting the growth and development of plants without any aid from the said hormones. Ld. Advocate heavily relied on literature in support of his contention that "Dhanzyme" was classifiable as a Bio-fertiliser. 5.Ld. Advocate submitted that the demand of duty raised in the SCN dated 8-1-1999 for the period 1995-96 to September, 1998 was barred by limitation. The longer period of limitation under the proviso to Section 11A(1) of the Central Excise Act was not invokable in the appellant's case inasmuch as there was no suppression, on their part, of any material information from the Department, nor any intention for evading payment of duty on the impugned goods. The appellants had, in their declaration filed with the Department on 15-9-1995, clearly indicated that their product "Dhanzyme" was being classified as bio-fertiliser and used as fertiliser. They also provided a list of raw-materials with their Classification List. In their letter annexed to the proforma, the appellants had clearly stated that "Dhanzyme" was a biologically derived plant growth promoter containing certain natural trace elements as well as precursors, enzymes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the same should be classified only under Chapter 31. 7.1We have carefully examined the submissions. We are primarily concerned with the classification of the appellants' goods branded "Dhanzyme". The goods cleared by the appellants under the said brand name were in two forms, one in liquid form and the other in granular form. The liquid product was admittedly smaller packings of "Biozyme", a bio-fertiliser supplied in bulk quantities to the appellant-company by M/s. Samruddhi and M/s. Wockhardt under the brand names "Sampdazyme" and "Wokazim" respectively. It is the appellant's consistent claim that the said bulk products branded "Sampdazyme" and "Wokazim" were classified by the manufacturers thereof under CSH 3101.00 and that the Department had never proposed to revise such classification. We note that this claim of the appellants has not been rebutted by the department. What the appellants did was simply to repack the bulk products of "Sampdazyme" and "Wokazim" brand received from Samruddhi and Wockhardt into smaller packings of 1000 ml, 500 ml, 180 ml, 90 ml and 30 ml and sell the same under their own brand name "Dhanzyme". In the absence of any Chapter Note in Chapter 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulates various activities of the plants from vegetative to reproductive stages. (iii) It enhances photosynthesis in plants and also helps in Cell growth. (iv) It does not appear to increase the fertility of soil as is in the case of fertilizers. It works directly on the plants. (v) Significantly it is not covered as a fertilizer in Fertilizer Control Order, 1985, where the fertilizers are covered. It is, therefore, obvious that statute does not recognise Dhanzyme as a fertilizer". The Commissioner appears to have held plant growth promoter to be synonymous with plant growth regulator. He has fallen into a patent error here. A plant growth promoter will only promote growth of the plant and will not inhibit it. On the other hand, a plant growth regulator can inhibit, promote or otherwise alter physiological processes in plants. The relevant HSN Note is clear to this effect. Kirk-Othmer "Encyclopaedia of Chemical Technology" (3rd Edition - Volume 18) introduces PGRs as follows : "Plant-growth regulators, other than nutrients, usually are organic compounds. They are either natural or synthetic compounds and are applied directly to a plant to alter its lif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacturers or formulated by the appellants themselves from the imported seaweed extract powder, the 'Dhanzyme' liquid used for spray over Bentonite clay granules had a seaweed origin. 7.4In the case of Leeds Kem [2000 (41) RLT 674], we had occasion to examine the question whether seaweed was a bio-fertilizer or not. In that case, after consulting technical authorities on fertilizers, we held that 'plantozyme' manufactured mainly from seaweed extract was a bio-fertilizer classifiable under Heading 31.01. We also held that the mere presence of small amounts of cytokinins in a bio-fertilizer would not detract from the latter's character of bio-fertilizer. It was further observed, in that case, that a product to be classified as plant growth regulator under CH 38.08 must be a separate chemically defined compound, on which basis we found that the decision in Unique Farmaid (supra) holding 'floramin' to be a PGR did not help the Revenue in Leeds Kem's case. We may, contextually, observe that the DR's reliance on the decision in Northern Minerals Pvt. Ltd. v. CCE - [1998 (102) E.L.T. 182] wherein 4.5% aqueous solution of Alpha-Naphthyl Acetic Acid (Trade name: "Dhanumon") was held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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