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2022 (9) TMI 738 - AT - Central ExciseClassification of foods - micronutrients - classifiable under Chapter subheading No.38089340 of the Central Excise Tariff Act, 1985 or not - demand of duty alongwith interest and penalty - extended period of limitation - HELD THAT:- Clearly, macronutrients, micronutrients and plant growth regulators are three distinct known to agricultural experts, as known in the market and as clarified by the CBEC. The show cause notice proposed to classify the micronutrients manufactured by the appellant as plant growth regulators. Learned Authorized Representative for the Revenue also admits that such classification is not sustainable. Therefore, the impugned order upholding such classification and demanding differential duty cannot be sustained and needs to be set aside. One of the basic principles of natural justice is that “no man shall be condemned unheard”. If the proposal is to classify the goods under a different tariff heading than one proposed in the show cause notice, a show cause notice must be issued and adequate opportunity should be provided to the appellant to explain why such classification should not be adopted. The argument of the learned Authorized Representative is that although they were present in these formulations they were not essential. There are no basis to hold as to which of these elements in the products are essential and which are not. It is his submissions that they were only chelating agents. Nothing is found in the Chapter note 6 to Chapter 31 which says that Nitrogen, Phosphorous & Potassium cannot be part of chelating agents or the chelating agents are not essential ingredients. There are no reason to go merely by the assertion of the learned Authorized Representative in this regard. Since one of these elements is available, the classification of the goods under Chapter heading 3105 is clearly sustainable. The alternative classification as plant growth regulators is not sustainable. Extended period of limitation - penalty - HELD THAT:- There are considerable force in the argument of the learned counsel for the appellant that the dispute is regarding classification viz., opinion of the assessee versus the opinion of the Revenue and it is not a case of fraud or collusion or wilful misstatement etc. No ground, whatsoever, exists for invoking extended period of limitation. Similarly, there is no ground, whatsoever, to impose any penalty. There are favour of the assessee both on merits and on limitation - appeal allowed.
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