New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (3) TMI 1043 - CESTAT CHENNAI

2016 (3) TMI 1043 - CESTAT CHENNAI - 2016 (337) E.L.T. 412 (Tri. - Chennai) - Classification - 1. Allwin Gold, 2. Allwin Top, 3. Allwin Top plus, 4. Allwin Wonder, 5. Allwin Wonder Plus, 6. Allwin Legume, 7. Allwin Elixer, 8. Ramdoot, 9. Bolt, 10. Dosth. Out of these 10 products, appellant claimed classification 3105 9090 whereas the Revenue classified them under 3824 9090 as plant growth regulators - Held that:- We find that Allwin Wonder plus and Allwin wonder contains potassium and nitro benz .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

om the test reports and confirms that both nitrogen and phosphorous or nitrogen and potassium or either one of the above are present in these mixtures and the usage as folio spray is not under dispute. Therefore, the adjudicating authority relying Fertilizer Control Order (FCO) for deciding the classification under 3105 is not justified and not substantiated. Accordingly, we hold that these products (sl.no. 3 to 9) qualified to be considered as other chemical fertilizers and contain either nitro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ase here that the appellants are clearing nitro benzene as such but it is used as one of the raw materials for manufacture of the product which is Allwin Gold. Both urea and nitrobenzene contains nitrogen which is essential ingredient for fertilizers. Therefore, the Revenue classifying them as plant growth regulators is not justified. We also find from the test reports and noticed that it does not contain any hormone ie., auxins, gibberellins or cytokinins. These are chemical hormones whether na .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it was cleared separately but kept in the packets as a combi-pack. On perusal of the sample packet of Allwin wonder plus, we find that Dosth is a wetting agent and kept inside the pack of Allwin wonder plus as 20 ml sachet. It is an option to the user to use this wetting agent comes with combi-pack. There is no dispute that that the appellants are not clearing the wetting agent separately. But it is packed inside Allwin Wonder plus and sell it as a combi-pack. Accordingly, we hold that "Dosth" i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r for disposal as the issue involved in these appeals are identical in nature. Appeals No. E/510/2010, E/208/2011, filed by Sree Ramcides Chemicals Pvt. Ltd., are arising out of two OIO No. 7/2010 dated 14.07.2010 and 1/2011 dated 27.01.2011. Revenue appeal No. E/365/2011 is filed against the Order-in-Appeal No. 47/2011 dated 29.03.2011 passed by the Commissioner (Appeals) and Appeals No. E/40915 - 41918/2015 (appellant + three others) are filed against the OIO No. 3/2015 dated 11.02.2015, passe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ertilizers (or) bio-fertilizers. The department issued SCNs proposing to classify them under CETSH 3824 9090. The adjudicating authority in his orders classified the following goods under chapter 38 as under:- S. No. Name of the Product CETSH 1. Allwin Top powder, 3824 90 90 2. Allwin Wonder powder, 3824 90 90 3. Rhino powder, 3808 99 90 4. Allwin XL-Liquid, 3808 99 90 5. Rishab 3808 99 90 6. Rock 3808 99 10 7. Allwin gold 15 G Granules, 3808 93 40 8. Allwin XL granules, 3808 93 40 9. Allwin gol .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ants Chennai unit they manufacture 10 items and the Commissioner of Central Excise, Chennai II commissionerate classified all the goods ie., Allwin Top, Allwin Top plus, Allwin Wonder, Allwin Wonder plus, Allwin Gold, Allwin Legume, Allwin Elixier and Ramdoot under 3824 9090 except Allwin Gold which is classified under 3808 9340 and Dosth (Agrowet) under 3402 9049 and confirmed the demand of ₹ 5,73,43,232/- and imposed equal penalty under Section 11AC of the Central Excise Act, 1944, and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the products. The Ld. Commissioner (appeals) has allowed the assesse s appeal and set aside the impugned order. He upheld the classification of the products as bio-fertilizers under 3101 0099. 5. Heard both sides extensively. These appeals were heard on 07.01.2016. Ld. Sr. Counsel Shri. N. Venkataraman supported by Shri Hari Radhakrishnan appeared on behalf of the appellants and also submitted written synopsis. He submits that out of the total demand confirmed by the Commissioner of Central E .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d the contents of the goods but only rejected the classification under CETH 3105 purely based on the reasoning that their goods are not covered under Fertilizers Control Order, 1995 (FCO). Sr. Counsel drew attention of the Bench to the Board s Circular dated 24.05.1990 at page 87 and another Circular dated 21/11/1994 at page 88 and Circular dated 19.05.1998 at page 86. He also drew attention to chapter note 2 to chapter 61 and HSN explanatory note 6 annexed at page 6 & page 22 and submits th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ity erroneously came to a conclusion that these are Plant Growth Regulators. 7. Further he submits that these goods are not classifiable under 3824 and drew attention to the Explanatory Note sl.No. 47 at page 80 of the paper book and submits that in order to classify the goods as plant growth regulators, the goods should be consisting of products classifiable under chapter 25 ie. they are sand and clay, whether or not they contain small quantity of fertilizing elements nitrogen, phosphorous and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fertilizers. Therefore, these products are rightly classifiable under 3105 as they are other fertilizers as classified by Board s Circular read with chapter note6. 8. As regards the items Allwin gold, the Sr. Counsel submits that the department classified the goods under 3808 as plant growth regulators. As per the chemical contents of Allwin Gold, it contains nitro-benzene (11% nitrogen and urea) also contains nitrogen. They used nitro benzene in the mixture which contains nitrogen, along with o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

etc. He also drew our attention to the list of GFR, and as per the literature of TN Agricultural University (TNAU) at page 96 where the list of PGRs are brought out. He also drew attention to the product marketed by their competitors (at page 89) manufactured by Devi Crop science Pvt. Ltd., and the product (Boom flower) containing nitrobenzene, which is sprayed on the foliage. He relied on the Hon ble High Court order in the case of Blossom products Vs, Salestax (page 125) order dated 29.08.2011 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.), where the Tribunal held that the goods are not covered under 38.08. He also drew our attention to HSN explanatory note at page 50 and also SCN para 13.1.4 (page 144 & 145), where the department concedes in the SCN that the composition of Allwin Gold is a mixture and not separate chemically defined compound. He submits that Allwin Gold is not classifiable under 38.08 and classifiable under 31.05. 10. Regarding Dosth, he submits that this product is supplied along with Allwin wonder plus, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on of fertilizer means any substance used or intended to be used as a fertilizer of the soil and/or crop and specified in Part A or Schedule I and includes a mixture of fertiliser, the appellant s products are not figuring in the schedule. Therefore, adjudicating authority has rightly held that these are not fertilizers as per FCO. She relied on the Tribunal s decision in the case of Himgiri Metals Pvt. Ltd. - 2014 (308) ELT 735 (Tri.-Del.) and in the case of CCE, Bangalore Vs. Karnataka Agro Ch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of nitrogen to classify as fertilizer and pleaded for remand of the case to the adjudicating authority. She also submits that as per the Notification No. 4/2006-CE dated 13.3.06 related to exemption of imported goods which are used in the manufacture of fertilizers and the said notification allows exemption of fertilizers as per the meaning under FCO and she submits that exemption is only allowed for fertilizers covered under FCO and not for any other items. Therefore, the adjudicating authority .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at particulars specially fertilizers. He further submits that the Revenue s plea for remand is not justified as there is no dispute as far as contents of the test reports and samples were duly drawn and tested and the test report is available clearly shows that the contents nitrogen, phosphorous and potassium. Therefore, the facts are very clear and the matter need not be remanded and no longer res intergra. He has also countered that the Board s Circular dated 19.05.98 clearly shows that FCO is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d confirmed on the products such as Rishab, Allwin XL, Rock, Agrowet, Rhino in appeal E/510/2010, E/365/2011 are containing some insecticidal property but they are contesting only the products ie. 1. Allwin Gold, 2. Allwin Top, 3. Allwin Top plus, 4. Allwin Wonder, 5. Allwin Wonder Plus, 6. Allwin Legume, 7. Allwin Elixer, 8. Ramdoot, 9. Bolt, 10. Dosth. Out of these 10 products, appellant claimed classification 3105 9090 whereas the Revenue classified them under 3824 9090 as plant growth regula .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t these products are not figuring under schedule to FCO, 1995. This was the sole ground for rejecting classification under Chapter 31. We also find that there is no dispute on the facts relating to the description of the contents, chemical composition etc., which has been admitted by the adjudicating authority as these goods are not mixtures and chemically defined. Having the department accepted the appellants plea that these are only mixtures but choose to classify them under 3824 as plant gro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lar to chapter note 6 of chapter 31. It is seen from the above, in order to classify the goods under 3105 as other fertilizers, two condition are stipulated under chapter note the conditions to be satisfied ie. 1. It should be used as fertilizers 2. Should contain essential constituent at least one of the fertilizing element as essential constituent, N, P, K The period involved is October 2008 to 2012-13. During the relevant period, under heading 3105 the rate of duty was Nil . In this regard, i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.P.K.), as notified by the Central Government or a State Government would be classifiable under CET Chapter 31.05. 2. A doubt has been raised regarding classification of certain Micro- nutrients such as compounds of Zinc, Boron, Manganese, Molybdenum, Iron etc., which are required in minor quantities to regulate plant growth -whether classifiable as fertilisers (31.05), plant growth regulators (38.08) or as separate chemically defined compound (Ch. 28). 3. The matter has been re-examined in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

c., which in turn alter life processes of the plant so as to accelerate growth, enhance yield and improve quality, thus indirectly contributing to regulate plant growth. 4. According to HSN Explanatory Notes, plant growth regulators are applied to alter the life process of the plant so as to accelerate or retard growth, enhance yield, improve quality of facilitate harvesting, etc. Plant hormones are one type of plant growth regulators. Synthetic organic chemicals are also used as plant growth re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or the purpose of classification of micronutrients as "Other Fertilizers" in Heading 31.05 CET, the scope of the term "Other Fertilizers" has to be determined in the light of Note 6 of Chapter 31. Further, the specific exclusion of separate chemically defined compounds as laid down in the HSN Explanatory Notes to Heading 3105.90, must also be borne in mind. If, the micronutrient is a separate chemically defined com- pound, it will be classifiable under Chapter 28/29. If not s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is not, whether it contains N, P or K as laid down in the Explanatory Notes. 7. Therefore, it is clarified that classification of micronutrients may be done in accordance with the above guidelines. 16. It is seen from the above circular, Board has categorically clarified what is fertilizer and what is micronutrients. At para-6 of the Board s Circular the Board has categorically stated that the Notification issued under FCO is irrelevant for deciding the classification under CET and also clarifi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion of the mixture contains either nitrogen, potassium or phosphorous, which has already been brought out in para-13 of the OIO dated 11.02.2015 and admitted that these products contain elements of N.P.K. single or combination. We find that Allwin Wonder plus and Allwin wonder contains potassium and nitro benzene which has elements of both Nitrogen and potassium. In the case of Allwin Top plus and Allwin Top contains Mono ammonium phosphate, and potassium humate which contains both phosphorous .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lly in the form of spray. The Revenue relying on the citation of Hon ble Karnataka and Himgiri Metals Pvt. Ltd. (supra) are distinguishable and not relevant to the facts of the present case. In that case case, the Hon ble High Court remanded the matter to the authority to confirm whether the products contain elements of nitrogen etc. Whereas, in the present case, there is no dispute on the composition as confirmed from the test reports and confirms that both nitrogen and phosphorous or nitrogen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ied under other fertilizers. Accordingly, we hold that these products are rightly classifiable under 3105 9090 and not under 3824 9090. 18. As regards Allwin Gold, we find that the adjudicating authority proposed to classify it under 3808 9340. As already discussed above, the composition of the product contains nitro benzene (20%) and urea (3%) along with other chemicals, which is not under dispute. It is not the case here that the appellants are clearing nitro benzene as such but it is used as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is only a mixture of chemicals which are sprayed as folio spray for enhancing the growth of the folio in the stage of blooming. Accordingly, we do not see any justification by the Revenue classifying the products under 3808 9340 as PGR. Therefore, we hold that Allwin Gold is rightly classifiable under 3105 9090. 19. As regards the last item Dosth , we find that this product was not declared by the appellant nor it was cleared separately but kept in the packets as a combi-pack. On perusal of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

item. The relevant paragraphs are reproduced as under:- 13. In order to find answer to the aforesaid question, it is necessary to have a look on the relevant General Rules for the Interpretation of this Schedule to the Central Excise Tariff Act, 1985 which is reproduced thus : Classification of goods in this Schedule shall be governed by the following principles : 1. The titles of Sections, Chapters and Sub-Chapters are provided for ease of reference only; for legal purposes, classification sha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rence to that article complete or finished for falling to be classified as complete (or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) mixtures, composite goods consisting of different materials made up or different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Central Excise Act, 1985, the classification of combi-pack would be governed by Rule 3(b) of the above quoted Rule. Rule 3(b) of above quoted Rule provides that in such a case, the goods put up in sets for retail sale shall be classified as if they consisted of material or component which give them essential character in so far as that criterion is applicable. The above citation squarely applicable to the present case. There is no dispute that that the appellants are not clearing the wettin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unt of each item, we direct the adjudicating authority to quantify the duty amount in respect of the above items covered under both the appeals. (b) the appellants are liable for penalty in respect of appeal No. E/510/2010. The equivalent penalty imposed under Section 11 AC is upheld to the extent of amount determined by the adjudicating authority after quantification of duty amount as directed (a) above. (c) In appeal E/365/2011 the penalty of ₹ 25 lakhs imposed under Rule 25 is reduced t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version