TMI Blog2016 (3) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed from 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 nitrogen, phosphorous or potassium, which is the essential constituents to be classified under other fertilizers. Accordingly, we hold that these products are rightly classifiable under 3105 9090 and not under 3824 9090. 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 one of the raw materials for manufacture of the product which is Allwin Gold. Both urea and nitrobenzene contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case are that the appellant manufacture pesticides and plant growth materials and bio-fertilizers. The appellants in appeals No. E/510/10 and No. E/208/2010 are manufacturing Allwin Top powder, Allwin Wonder powder, Allwin gold 15 G Granules, Allwin XL granules, Rhino powder, Allwin gold-Liquid, Allwin XL-Liquid, Agrowet, Rishab-Liquid and Rock and classified them under CETSH 3101 0099 treating them as Animal/Vegetable fertilizers (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., Rishab, Allwin XL, Rock, Agrowet and Rhino and contesting only the remaining three items. In respect of Commissioner Central Excise, Chennai, they are contesting all the items. 6. He further submits that the products manufactured by the appellant are classifiable as other fertilizers under chapter heading 3105 as all the items contain nitrogen, phosphorous and potassium or together. He submits that the adjudicating authority has not disputed 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 that as per note 6 for the purpose of heading 3105, the term other fertilizers applies only to products of a kind used as fertilizers and containing as an essential constituent, at least one of the element is nitrogen phosphorous or potassium. For the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, the Hon ble High Court upheld the classification of the product under HSN 3105.90. 9. He further submits that as per the chapter note 1 A sub-clause 2 of chapter 38 (1to 9 of the paper book), this chapter excludes the products which are chemically defined elements or compounds. In their case the goods are not chemically defined products but it is only a mixture. In support of his arguments, he relied on two Tribunal orders at page 106 2001 134 ELT 294 (Tri.-Del.) and 2001 131 ELT 355 (Tri.-Del.), 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, they have not declared this Dosh as a combi-pack. 12. Sr. Counsel in a rejoinder countered the arguments of the Ld. AR and submits that the Revenue s contention that packaged goods do not bear description is wrong and it is clearly mentioned that 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 not relevant for classification of fertilizers under CET and also countered that Himgiri Metals Pvt. Ltd. (supra) relied upon by the Revenue is not applicable to the present case as it is for the exemption given under the notification. Whereas, in their case, classification of the goods under CET at nil rate of duty. 13. We have carefully considered the submissions by both sides and perused the records and all the three adjudication o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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, it is pertinent to see the Boards Circular dated 392/25/98-CX dated 19.05.98, wherein the Board has issued clarification on classification of Micronutrients. The relevant extracts of Boards Circulars are reproduced as under:- Attention is invited to the instructions contained in Board s Circular No. 79/79/94-CX., dated 21-11-1994 [See 1994 (74) E.L.T. T46] wherein Board had clarified that Micronutrients listed under the Fertiliser (Control) Order, 1985 and their mixtures (with or without N.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 Extracts X X X X X X X X Extracts X X X X ..... e chemically defined compound. If it is, then classification under 31.05 is ruled out; and (ii) if it 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 clarified FCO order the classification should be based on whether the goods are chemically defined compound only then the classification under 3105 is ruled out. Secondly, where the products consist of nitrogen phosphorous and potassium as laid down in the explanatory notes, it falls under other fertilizers. If these two conditions are not met only then the products can be excluded from chapter heading 31.05. As it is seen from the finding of the adjudicating authority and the test reports, the composition of the mixture contains either nitrogen, potassium or phosphorous, which has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 naturally or synthetically considered as growth regulators. In the present case, it 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (c) when goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit classification. 14. On reading of the above Rule 3 of interpretation, it is clear that since combi-pack comprises of two different articles classifiable under different chapters and sub-heading of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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