TMI Blog2019 (7) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... of various constituents. As per chemical examiner test report in case of NPK Fertilizer the composition of goods is Nitrogen 29.70%, Phosphorous (as P 2 O 5 ) 11.60%, Potassium (as K20) 10.37, In Power Gold the composition is Calcium (Ca)-21.1%, Magnesium (Mg)-5.9%, Sulphur (S)20.9% and in Bio-Gold composition is Carbon-13.92%, Moisture-12%, Ash-76%. In case of Bio Gold the report also says that the sample is composed of carbon bearing material and small amount of Phosphorous, Potassium and nitrogen bearing inorganic compounds alongwith clay matter. However the test report does not give percentage of same. Coming to the constituents we find that as far as NPK Fertilizer is concerned there is no doubt about its classification based upon constituents. Even the show cause notice accepted its classification under CETSH 3101 but it is not known as to why the duty was demanded. Nor the impugned order discusses anything about its classification and hence there is no case of revenue for classification under any other chapter. In case of Power Gold from test reports the constituents are apparent i.e. it consists of Single Super Phosphate (SSP), Gypsum and other inorganic substances, viz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Carbon, Bentonite and Dolomite. The products claiming to be having presence of Nitrogen, Phosphorus and Potassium and were in turn claimed to be Fertilizers. The product Power Gold under CETSH 3103 9000 and Bio-Gold under CETSH 310290 90. The Appellants were availing exemption of duty in excess of 1 % under Sl. No. 40 of Notification No. 1/2011 - CE dated 1.3.2011 till 16.3.2012. Afterwards exemption from duty in excess of 1% under S.No. 128 of Notification No. 12/2012 dated 17.3.2012 was availed from 17.3.2012 on above products. The Appellant factory was visited by Central Excise Officers on 19.2.2014 and statements of Manager Shri Ramesshbhai Bhoi, Director Shri Rameshbhai Jinabhai Patel and GM Accounts Shri Jitendrabhai Yashvantbhai Patel were recorded. Samples of the aforesaid products were drawn for testing at Chemical Examiner, Central Excise Laboratory, Vadodara. The test report gave the following composition: (i) NPK Fertilizer :Nitrogen - 29.70%, Phosphorous (as P 2 O 5 ) 11.60%, Potassium (as K 2 O ) 10.37% (ii) Power Gold :Calcium (Ca)-21.1%, Magnesium (Mg)-5.9%, Sulphur (S)20.9% (iii) Bio-Gold :Total Carbon-13.92%, Moisture- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the products confirm their use as soil conditioner and not as fertilizer. Therefore, this cannot be classified under CETSH 31039090 as phosphatic fertilizer but can be classified as Chemical Products not elsewhere specified or included under CSTSH 38249090. (ii) Organic Manure (Bio Gold etc.)- From the test results of these products following is observed that these products are not having any of Nitrogen, Phosphorus and/or Potassium as essential constitutes. As per the statement dated 22..8.2016 of Shri Jitendra Yashvantbhai Patel, General Manager (Account) and authorized signatory of M/s NBCPL, Organic Manure is Bio gold etc. and as per statements dated 19.2.2014 of Shri Rameshbhai Jinabhai Patel, Director, this is hot having essential constituent of any of fertilizing elements viz. nitrogen (N), phosphorous (P) or Potassium (K), the same was not fertilizer but the products fell under Chapter 38 of the Central Excise Tariff Act, 1985 attracting full rate of central excise duty. As per the statements dated 19.2.2014 of Shri Maheshbhai Bhoi, Manager (Commercial), this product is manufactured by mixing of raw materials, viz. bentomite, gypsum, magnesium waste, mud, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which covers mineral or chemical fertilizers- phosphatic. The composition of Power Gold clearly shows that it consists of Single Super Phosphate (SSP) Gypsum and other inorganic substances, viz. Calcium, Magnesium, Sulphur,Mud, Dolomite and Bentonite. Thus, it meets the requirement of subject note and it is classifiable under tariff heading 31.03. The test report of Chemical Examiner, Vadodara also confirms that the goods contain phosphorous (P 2 O 5 ) 2.8%. The contention of the adjudicating authority that 2.8% of phosphorus is too less and it must contain minimum 16% of phosphorous is not a condition of Chapter Note 3 of Chapter 31. It mainly requires presence of Super Phosphate along with chalk, gypsum and other inorganic substances and no minimum percentage of phosphorous has been stipulated. The HSN Explanatory Note under heading 31.04 also states that the mixture of Super Phosphate with gypsum and other inorganic substances may be in any proposition. Chapter Note-3 specifically mentions basic slag in which phosphorous content is much less than 16%. Therefore, the contention of the department that a product to fall under heading 31.03, it must have minimum phosphorous 16% i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submits that the impugned order has classified Power Gold and Bio Gold under chapter sub heading 3824 9090. Chapter 38 covers chemical products, preparations of the chemical or allied industries (including those consisting of mixtures of natural products) not elsewhere specified or included. However no reason has been given as to how these preparations would fall under said CETSH. He also submits that since the issue involved is the question of interpretation of the tariff, there is no reason to demand duty for the extended period and no penalty is imposable. 7. Ld. AR Sh. S. K. Shukla appearing for the Revenue reiterates the findings of the adjudicating authority in the impugned order. 8. Heard both the sides and perused the case records. We find that chapter 31 pertains to fertilizers whether Animal or vegetable, Mineral or Chemical, nitrogenous, Phosphatic, potassic under chapter 3101 to 3104. CETSH 3105 covers goods viz. Mineral or Chemical fertilizing elements nitrogen, phosphorous and Potassium; other fertilizers; goods of this chapter in tablets of similar forms or in packages of a gross weight not exceeding 10 Kgs. Chapter Note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t its classification based upon constituents. Even the show cause notice accepted its classification under CETSH 3101 but it is not known as to why the duty was demanded. Nor the impugned order discusses anything about its classification and hence there is no case of revenue for classification under any other chapter. In case of Power Gold from test reports the constituents are apparent i.e. it consists of Single Super Phosphate (SSP), Gypsum and other inorganic substances, viz. calcium, magnesium, sulphur, mud, dolomite and bentonite and thus it clearly meets the requirement of Chapter Note-3 (a) (iii) (c). to cover it under CETSH 3103.We also find from the Report of the Chemical Examiner shows that the product in question Power Gold contains 2.8% of phosphorous. Chapter Note 3 in turn stipulates presence of super phosphate and there is no minimum percentage of phosphorous in said chapter note. The Explanatory Note of 31.03 also states that mixture of super phosphate may be in any proportion. The adjudicating authority has held that presence of phosphorous pentoxide (P 2 O 5 ) was found, which is not same as phosphates. We find from the website https://www.agroservicesinternatinal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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