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EID Parry (India) Ltd. Versus CCE & ST, LTU Chennai And Vice-Versa

2017 (9) TMI 876 - CESTAT CHENNAI

Classification of goods - Plant Vitalizer with a brand name ABDA - clearance from EOU to DTA - appellant have claimed the classification of the said product under Central Excise Tariff Heading 3101.00.99 as Animal or Vegetable Fertilizers whereas Revenue objected to the said classification and initiated proceedings to reclassify the product under Chapter 38 as Miscellaneous Chemical Products and more specifically as Plant Growth Regulators under CETH 38089340 - Held that: - ABDA is marketed as P .....

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llant that it is only consumable is misplaced - Even in the technical literature given by the appellant, it is clearly stated that paraffin wax is used for coating so that the plant extracts and the dye do not get removed from the base material. The paraffin wax loses its identity as soon as it is coated over the sand. It is apparently a raw material in the manufacture of ABDA. Simply because it loses its identity as a wax does not make it a consumable item. As such for non-fulfilment of the con .....

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0099 - claim for exemption under N/N. 23/2003-CE, wherever duty is payable is not sustainable in view of violation of condition No.3 (i) of the notification - demand upheld only for normal period - appeal allowed - decided partly in favor of appellant. - E/271/2009, E/289/2009 E/241/2010 E/250/2010 E/395/2010 E/442/2010 E/40323/2013 - Final Order No. 42067-42073 / 2017 - Dated:- 15-9-2017 - Ms. Sulekha Beevi C.S. Member ( Judicial ) And Shri B. Ravichandran, Member ( Technical ) Shri S. Muthuven .....

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ssee and two appeals are by the Revenue. 2. The brief facts of the case are that the appellant-assessee are engaged in the manufacture of Plant Vitalizer with a brand name ABDA . They have claimed the classification of the said product under Central Excise Tariff Heading 3101.00.99 as Animal or Vegetable Fertilizers . The Revenue objected to the said classification and initiated proceedings to reclassify the product under Chapter 38 as Miscellaneous Chemical Products and more specifically as Pla .....

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see in Appeal E/241/2010) on the ground that the Revenue is correct in reclassifying the product as done by the original authority under 38089990. 4. Appeal No.E/395/2010 is against original order dated 30.3.2010 passed by Commissioner, LTU. This appeal dealt with classification of ABDA as well as concession available to the appellant-assessee when cleared to DTA in terms of Notification No.23/2003 dt. 31.1.2003. 5. Revenue also filed Appeal No.E/442/2010 against this order of the Commissioner r .....

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dia. The Regional Director in his test report dt. 2.1.2007 categorically stated that the product is organic manure and the sample passed as per Fertilizer Control Order, 2006. The Revenue has refused to accept the finding of the Regional Director and proceeded to classify the product as Plant Growth Regulator under Chapter 38. He submitted that ABDA is a plant fertilizer which improves the productivity and yield when applied. Thus, it is not regulating plant growth. Regulator should have a funct .....

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owth media and promoters should necessarily be classified only under Chapter 38 is incorrect. The product ABDA satisfied the various descriptions in Chapter 31. Reliance was placed on the decision of the Tribunal in Northern Minerals Ltd. Vs CCE New Delhi 2001 (131) ELT 355 (Tri.-Del.) which was followed in 2002 (142) ELT 426 (Tri.-Del.) which was upheld by the Apex Court in 2003 (153) ELT A 301 (SC). (d) Regarding exemption available to the appellant-assessee under Notification No.23/2003-CE, i .....

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he present case. The dispute is the classification of the product. The appellant informed the department on 1.8.2005 itself giving details of the composition of the product and their intent to clear it under Chapter 31 without payment of duty. Accordingly, there is no tenable reason to invoke suppression etc. for a demand of extended period and also to impose penalties on the appellant-assessee. 8. The Ld. A.R opposed the appeals by the appellant-assessee. He submitted that the test report of th .....

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. The product per se is not fertilizer. Even the appellant is not marketing the same as fertilizer. They are marketing the same as Plant Vitalizer . He supported the findings of the lower authorities. 9. On the appeals filed by Revenue, he submitted that the original authority relied on a decision of the Tribunal in Sarla Performance Fibres Ltd. Vs CCE Vapi 2010-TIOL-408-CESTAT-AHMEDABAD = 2010 (253) ELT 203 (Tri.-Ahmd.). The department has not accepted the said order and as such the present app .....

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omposition of the product was subjected to test by the department. The test report dt. 2.1.2007 of Regional Director of Regional Centre of Organic Farming, Bangalore makes it clear that the impugned product contains Nitrogen 0.7%, Phosphorous 0.4%, Potassium 0.6%. The report states that the product is organic manure and the sample is passed as per FCO, 2006. The Revenue did not accept this report. On careful perusal of the impugned orders, we are unable to find out detailed reason for rejection .....

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fertilizer as a substance made up of one or more unprocessed materials of a biological nature (plant / animal) and may include unprocessed mineral materials that have been altered through micro biological decomposition process. Thereafter, the impugned order proceeds to state that the product of the appellant-assessee is not manufactured through micro biological decomposition process. We note that such decomposition process is not mandated in respect of all kind of organic fertilizer. It states .....

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plant growth regulators and fertilizers for classification. It was recorded that as per HSN Explanatory Note, 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 regulators. The circular further clarified that fertilizers are materials added to soil and, sometime .....

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any technical evidence to state that the impugned goods are more in the nature of regulators than general growth promoters. Admittedly, plant growth regulators has a role for controlled growth. It will include retardation also whereas if the product is containing fertilizing elements which aims to enhance growth and plentiful yield of the plant, the same cannot be called as a regulator. It will be more akin to a fertilizer. Appellant-assessee are manufacturing ABDA using plant products and sand .....

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moter will only promote growth and will not inhibit. On the other hand, a plant growth regulator can enhance, promote or otherwise alter physiological processes in plant. Relying various technical literature, the Tribunal made the distinction between plant growth regulator and the plant growth promoter. In the present case, ABDA is marketed as Plant Vitalizer and the usage indicated in the literature clearly shows that they are not plant growth regulators. They will be more in the nature of plan .....

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The said condition states that the goods are to be produced or manufactured wholly from raw materials produced or manufactured in India. The appellants admittedly used paraffin wax imported into India. They have claimed that they have used the said paraffin wax as a consumable and not as a raw material. We are not in agreement with the said assertion. It is clear from the submissions made by the appellant and also from the letter dt. 1.8.2005 submitted to the department, that paraffin wax is one .....

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not get removed from the base material. The paraffin wax loses its identity as soon as it is coated over the sand. It is apparently a raw material in the manufacture of ABDA. Simply because it loses its identity as a wax does not make it a consumable item. As such for non-fulfilment of the condition of using goods manufactured or produced in India, the appellant-assessee is not eligible for the concession under Notification No.23/2003-CE. 15. Regarding calculation of correct amount of cess payab .....

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ings of the original authority. We note that the said decision of the Tribunal has been affirmed by the Hon ble Supreme Court in Meghmani Dyes and Intermediates Ltd. 2014 (307) ELT A79 (SC). As such, we find, the appellant s additional liability on education cess as demanded is not sustainable. 16. The final point for decision is whether the demands wherever raised invoking extended period are barred by limitation or not. Admittedly, the appellant addressed a letter dt. 1.8.2005 to the jurisdict .....

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