TMI Blog2022 (9) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... and adequate opportunity should be provided to the appellant to explain why such classification should not be adopted. The argument of the learned Authorized Representative is that although they were present in these formulations they were not essential. There are no basis to hold as to which of these elements in the products are essential and which are not. It is his submissions that they were only chelating agents. Nothing is found in the Chapter note 6 to Chapter 31 which says that Nitrogen, Phosphorous Potassium cannot be part of chelating agents or the chelating agents are not essential ingredients. There are no reason to go merely by the assertion of the learned Authorized Representative in this regard. Since one of these elements is available, the classification of the goods under Chapter heading 3105 is clearly sustainable. The alternative classification as plant growth regulators is not sustainable. Extended period of limitation - penalty - HELD THAT:- There are considerable force in the argument of the learned counsel for the appellant that the dispute is regarding classification viz., opinion of the assessee versus the opinion of the Revenue and it is not a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Tariff Act and consequently recover the differential duty of Rs.1,23,49,088/- under proviso to section 11A(1) of Central Excise Act along with interest under section 11AB. It was further proposed to impose a penalty on them under section 11AC and under Rule 25 of the Central Excise Rules, 2002. The appellant contested the proposal before the Commissioner both on merits and on limitation. After following due process, learned Commissioner has passed the impugned order. Hence, this appeal. 3. The undisputed facts of the case are that the appellant was manufacturing micronutrients. Plants obtain their carbon, oxygen and hydrogen from water and air and the remaining nutrients from the soil. Since the naturally available nutrients in the soil are not sufficient, fertilisers either in the form of compost or farmyard manure or in the form of synthetic fertilisers are used to supplement. The synthetic fertilisers provide various nutrients i.e., chemical elements required for the plants in forms in which they can absorb. The nitrogen, phosphorous and potassium (N, P, K) are required in very large quantities and are referred to as primary nutrients. Other elements such as calcium, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her submits that at any rate this is only a question of classification as proposed by the Revenue and as classified by the assessee. Therefore, there is no case to invoke an extended period of limitation or impose a penalty upon the appellant. 8. Learned Authorized Representative for the Revenue does not dispute that the appellant was manufacturing micronutrients and not auxins, gibberellins, etc. However, he submits that the appellant has classified the micronutrients under Chapter heading 3105. Chapter note 6 to Chapter 31 reads as follows: 6. For the purposes of heading 3105, the term other fertilisers applies only to products of a kind used as fertilisers and containing, as an essential constituent, at least one of the fertilising elements nitrogen, phosphorus or potassium. 9. It is clear that this tariff heading applies only to fertilisers which contain at least one of the fertilising elements nitrogen, phosphorous or potassium as an essential constituent. That is not the case in the goods manufactured by the appellant. He draws the attention of the bench to para 5 of the CBEC circular dated 06.04.2016 which reads as follows: 5. Mixtures of micronut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48.91 Nitrogen 15.385 Phosphorous 2.585 Potash 7.575 Total 100 2. Formulation No:4 Zinc 18.18 Ferrous 10.255 Manganese 5.00 Copper 4.16 Borax 9.525 Molybdenum 0.09 Magnesium 28.01 Nitrogen 10.255 Phosphorous 5.00 Potash 9.525 Total 100.00 3. Formulation No:5 Zinc 2.50 Ferrous 1.00 Manganese 1.00 Borax 0.50 Magnesium 90.50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding such classification and demanding differential duty cannot be sustained and needs to be set aside. 16. We also find that the alternative submission by the learned Authorized Representative, that the correct classification should be determined by this Tribunal regardless of the fact that such proposition was not in the show cause notice, is clearly not sustainable. One of the basic principles of natural justice is that no man shall be condemned unheard . If the proposal is to classify the goods under a different tariff heading than one proposed in the show cause notice, a show cause notice must be issued and adequate opportunity should be provided to the appellant to explain why such classification should not be adopted. 17. We further find that the formulations as presented before us and discussed above clearly show that the assessee s products indeed, had Nitrogen or Phosphorous or Potassium or more than one of these three as an ingredient in them. The argument of the learned Authorized Representative is that although they were present in these formulations they were not essential. We do not find any basis to hold as to which of these elements in the products are ess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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