TMI Blog2022 (8) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ectly to Rule 3(c) of the General Interpretation Rules, which is not correct to our understanding. The classification of the goods should be done by the reference of the heading and chapter note. It is pertinent to note the Explanation given in Chapter 12.12 of HSN, seaweed and other algae and it says that this Heading covers all seaweeds and other algae whether or not edible, they may be fresh, chilled, frozen, dried or ground. Seaweeds and other algae are used for various purposes (e.g. pharmaceutical products, cosmetics, human consumption, animal feeding, and fertilizers) and other that should be as such that this heading excludes Fertilizers of Heading 31.01 or 31.05. A plain reading of this note indicates that seaweed and other algae should also be used as fertilizer and when done so, they fall under Heading 3101 or 3105 and even otherwise by referring to Note 3(b) of General Interpretation Rules, the product in dispute falls under CETH 3101. Thus, it was held by the Tribunal in the case of CCE, ROHTAK VERSUS M/S. SAFEX CHEMICAL INDIA LTD. [ 2017 (9) TMI 140 - CESTAT CHANDIGARH] that though the chemical examination report indicates the presence of ingredients like, Aux ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lassify the product Zymegold Plus as Plant Growth Regulator under CTH 3808 whereas the Commissioner has dropped the allegations made in the SCN and proceeded to decide the classification on a different footing by invoking Rule 3(c) of General Interpretation Rules. He submits that the general rule for interpretation was never invoked in the show-cause notice to decide classification of the product Zymegold Plus; it is a settled principle of law that the adjudicating authority cannot go beyond the grounds specified in the SCN; as held in Ballarpur Industries Ltd. - 2007 (215) ELT 489 (SC) and Champdany Industries Ltd. - 2009 (241) ELT 481(SC). The order passed beyond the scope of the show-cause notice is bad in law. 2.1 Learned Counsel for the appellants further submits that essential character of impugned part of Zymegold Plus is contributed by Seaweed Extract Powder, which is also classifiable under CETH 3101; Seaweed Extract Powder is of organic plant origin derived from the plants growing in the Sea. It comprises of proteins, amino acids and carbohydrates which are made up of plant nutrient elements like carbon, hydrogen, nitrogen, phosphorous, sulphur and oxygen; it was he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her than nutrients. He submits that HSN Explanatory Notes of Chapter 38 defines that Plant Growth Regulator are applied to alter the life processes of a plant so as to accelerate or retard growth, enhance yield, improve quality or facilitate harvesting etc. Plant hormones (phytohormones) are one type of plant-growth regulator (e.g. gibberellic acid). Synthetic organic chemicals are also used as plant-growth regulators ; the show-cause notice and Order-in-Original admitted that the impugned Zymegold Plus contains nutrients like seaweed extract, therefore, in view of the Board s Circular cited above, the product Zymegold Plus being a nutrient is excluded from the definition of plant growth regulators. He relies on the following cases: - (i) Northern Minerals Ltd. Vs. CCE - 2001 (131) ELT 355 (T) (ii) CCE Vs. Chemcel Bio-Tech Ltd. - 2007 (211) ELT 414 (T) (iii) Aries Agrovet Inds. Ltd. - 2017-TIOL-2635-CESTAT-HYD (iv) Aries Agrovet Inds. Ltd. - 2018 (6) TMI 1070-CESTAT-MUM 2.4 Learned Counsel for the appellants submits that the Department has relied upon the test report of Chemical Examiner, wherein it is stated that Zymegold Plus contains 6-BA, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and Hydrolyzed protein complex and both of which are classifiable under CETH 3101; the above said judgment in the case of Northern Minerals is upheld by Hon ble Supreme Court as reported in 2003 (156) ELT A161 (SC). Lastly, he further submits that even if the product is classified under CETH 3105, it was eligible for exemption under Notification 4/2006-CE dated 1.3.2006. Learned Counsel submits that appellants vide letter dated 31.10.2006 informed the ingredients and classification of the impugned product; there was no fraud attempt with intent to evade payment of excise duty as the facts are very much in the knowledge of the Department in 2006 itself and the SCN cannot be issued for extended period. Therefore, the major portion of the demand does not sustain. He relies on Anand Nishikawa Co. Ltd. Vs. CCE - 2005 (188) ELT 149 (SC) and Yashanand Filaments Pvt. Ltd. Vs. CCE - 2011 (268) ELT 234 (T). He also submits that the appellants were under bona fide belief that they have rightly classified the product Zymegold Plus during the period of dispute; therefore, no elements of fraud, collusion, willful mis-statement or suppression of facts are contravention of any provision with in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall he 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 consideration. On going through the above, it is seen that the emphasis of the rule is on the heading which provides the most specific description. The goods are to be classified as per their description and the general description should not be preferred before the specific description. Moreover, in terms of Rule 3(b), mixture consisting of different materials is to be classified with reference to the major component which gives it the essential character. We find that in the case of impugned product, the major constituent is seaweed powder ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. It is seen that the chemical examiner has not conducted any tests and has given an opinion based on appellants literature. We find that for similar product plantozyme (also containing cytokinin) CESTAT in case of Leeds Kem (supra) had considered the issue of classification in great detail and held that the product is a biofertilizers and mere presence of small amounts of cytokinin would not detract from its character of bio fertilizer classifiable under Heading 31.01 and not under Heading 38.08. Similarly, another similar product known as Dhanzyme, CESTAT in the case of Nothern Minerals v. Comm. C. Excise (supra) relied upon the judgment in the case of Leeds Kem (supra) to come to same finding (holding it to be classifiable as bio fertilizer). Appeal against the said judgment was dismissed by Supreme Court on merit - 2003 (156) E.L.T. A161 (S.C.). 7 . Thus the issue of classification of the impugned product is no longer res integra and stands settled in favour of the appellants. 8. We find that it was held by the Tribunal in the case of Safex Chemical Industries Ltd. (supra) that though the chemical examination report indicates the presence of ingred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of these ingredients has not been ascertained. It cannot be ruled out that these ingredients may be present in small trances in the impugned sample and that the same can be found in fertilizers also. III. Literature of the impugned product which is always for information and knowledge of the consumer and normally which is termed as authentic information does not suggest that the impugned product is for specific use or is to be used to achieve specified results of regulating the plants. On the other hand the leaflet contains information normally contained for fertilizers. It does not suggest that the impugned product is to be applied directly on the plant. IV. Most of the ingredients found to be contained by the Chemical Examiner are incapable of altering life process of the plant by inducing internal changes and are only capable in providing nourishment to the plant. Such ingredients cannot qualify to be PGR in terms of definition provided by International Coding System discussed in Para 8 above. V. The Chemical Examination Report does not suggest that the impugned product can be termed as separate chemically defined element or compound which is pre-requisite of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 Zinc Sulphate Heptahydrate 35 13.1 4 Magnesium Sulphate 125 46.7 5 0.5 NHC1 9 3.4 6 Methanol 5 1.9 7 Methyl Paraban 0.75 0.3 8 Polysorbate-20 35 13.1 9 Proteins Casein 7.75 2.9 Total :- 267.50 100 The balance i.e., 770-268=502 Kg. is water. On going through the above, it is seen that such enzymes help in plant growth regulation are present but in only small traces i.e. 0.26% and 0.53% prior to 03.07.2010. For the period after 03.07.2010, even the traces are absent. Therefore, in view of the case laws cited above, we find that the impugned goods cannot be classified ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
