TMI Blog2017 (7) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the manufacture of pesticides and micronutrient fertilizers classifiable under CETH 3808 and 3105 respectively under the Central Excise Tariff Act, 1985. 2. Pursuant to certain investigations conducted by the department, the respondents were issued with nine show cause notices proposing to classify Chelamin, Agromin, Chelafer Chelacop, cleared by them during the period from May 1998 to March 2005 as Plant Growth Regulators under CSH 3808 20 and thereby proposing to demand duty, interest and to impose penalty under various provisions of Central Excise Act, 1944 and the Rules made thereunder. In adjudication vide common Order-in-Original No. 25/2005 dated 30.11.2005, the Commissioner dropped the proposals contained in all the show cause notices by confirming the classification of the impugned goods namely Chelamin, Agromin, Chelafer and Chelacop as Other Fertilizers under CSH 3105 90 90 of CETH. 3. Respondents were issued with one more show cause notice dated 17.03.2006 proposing to classify Chelamin, Agromin, Chelafer Chelacop cleared during the period April 2005 to December 2005 as Plant Growth Regulators under CSH 3808 20 and thereby proposing to demand duty, intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry notes even those products, which enhance yield, improve quality etc. also fall within the purview of Plant Growth Regulators. (iv) There exists no doubt about the capability of the impugned goods, which are micronutrients, in enhancing and maximizing the yield in agricultural crops and plantations. That being so, they are squarely covered by the HSN explanatory notes for the heading 38.08 and hence the impugned goods undoubtedly qualify for classification under the said heading only as Plant Growth Regulators. 6. Ld. Advocate Shri R. Parthasarathy, for the Respondent, also made submissions, which can be summarised as follows: (a) Micronutrients manufactured by the Respondents by using chelating agents with an organic compound i.e. Ethylene Diamine Tetra Acid (EDTA) are mixtures and not chemically defined compound. (b) Products in question are classifiable under CTH 3808.20 as Plant Growth Regulator and not as other fertilisers classified by the respondents under CTH 3105 90 by virtue of Note 6 of Chapter 31 of the CETA. (c) Note 1 to Chapter 38 states that a plant growth regulator classifiable under Chapter Note 38.08 should be a separately defined chemica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utrients [1996(87) E.L.T 19 (SC)], Board re-examined the matter and issued another circular No.392/25/98-CX, dated 19.05.1998. Referring to the HSN Explanatory Notes, Board advised therein as follows: Fertilisers are materials added to soil and, sometimes to foliage to supply nutrients to sustain plants and promote their abundant and fruitful growth. The elements that constitute these plant foods are divided into three classes (1) Primary - Nitrogen (N), Phosphorous (P) and Potassium (K), (2) Secondary - Calcium (Ca), Magnesium (Mg) and Sulphur (S) and (3) Minor or so called micronutrients - Iron (Fe), Manganese (Mn), Copper (Cu), Zinc (Zn), Boron (B) and Molybdenum (Mo). However, for 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 compound, it will be classifiable under Chapter 28/29. If not so, and if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach poisoning by asphyxiation or by odour etc From the data on plant growth regulators submitted by the appellant, we find that at least in some parts of the world, they are regulated as pesticides. Discernibly, micronutrients which are admittedly for promoting only growth and health of plant cannot logically find a place in this heading. 8.6 It is interesting to note that CBEC found it necessary to issue yet one more circular No.1022/10/2016-CX, dated 06.04.2016, on the very issue of classification of micronutrients, plant growth regulators etc. In the first para itself, the circular acknowledges that the issue of classification of these items remain a disputed area in Central Excise. On the basis of opinion obtained from Indian Agricultural Research Institute (IARI), Central Excise Tariff explanatory notes, nature, usage etc., the CBEC has clarified, inter-alia , that micronutrients are essential nutrients and required in small quantities for the normal growth and development of plants containing elements like iron, Manganese, Zinc, Copper, Boron, Molybdenum, Nickel etc. Board has also acknowledged that these micronutrients are sold in the market as micronutrient fertiliser. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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