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TMI Blog2023 (5) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... anules Zymegold plus Liquid Zymegold plus Liquid Zymegold plus Liquid Zymegold plus Granules Dripzyme Dripzyme OIO 06/ADC/CE X/KPL/2013 dated 26.12.2013 30/ADC/CE X/KPL/2013 dated 26.12.2013 31/ADC/CE X/KPL/2013 dated 26.12.2013 32/ADC/CE X/KPL/2013 dated 26.12.2013 RTN/128A/ 14 dated 25.10.2014 11/CEX/AD C/KOP/2012 dated 19.03.2013 18/CEX/ADC /KOP/2012 dated 19.03.2013 OIA KLH-EXCUS-000-APP-003-007-15-16 DATED 1.4.2015 KLH-EXCUS-000-APP- 001-002-15-16 dated 1.4.2015 Period July 2011 to November 2011 December 2011 to March 2012 April 2012 to July 2012 August 2012 to January 2013 May 2013 to December 2013 Septembe r 2012 to January 2013 August 2011 to March 2012 Demand 42,56,457 19,45,179 26.80.917 35,96,473 3,91,750 5,11,426 10,77,175 Penalty 4,25,000 1,90,000 2,68,000 3,60,000 40,000 1,07,000 51,000 2. The issue involved herein is whether the products Zymegold Plus and Dripzyme are classifiable under CTH 3808 - 'Plant Growth Regulator' as re-classified by the department or under CTH 3101 - 'Fertilizer' as claimed by the Appellant? 3. One fact which is relevant to these appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the appellants have stopped using w.e.f. 3.7.2010 and informed the same to the department also, but despite that the department re-classified the products. Learned counsel further submits that inspite of using the aforesaid two ingredients in their product, this Tribunal on the identical issue concerning Zymegold Plus for the period November, 2006 to June, 2011 vide its Final Order No. A/85667- 85668/2022 dated 29.7.2022 in Appellants' own case in the matter of M/s. Goldmuhor Agrochem & Feeds Ltd. vs. CCE, Kolhapur has decided the same in favour of the appellants by allowing the appeals filed by the appellants and held that the impugned product cannot be treated as Plant Growth Regulator and is classifiable as Fertilizer under CSH 3101. He also submits that Zymegold Plus contains 15% Seaweed Extract Powder that gives essential character to the products in issue, which is also classifiable under CSH 3101. According to learned counsel Nutrients cannot be considered as plant growth regulators. In support of his submissions, learned counsel placed reliance on the following decisions:- (i) Northern Minerals Ltd. vs. CCE; 2001(131) ELT 355(T) (ii) Leeds Kem vs. CCE; 2001(134) EL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rient element like zinc) has a definite and specific function to perform in the growth and the development of plants. Deficiency of any of these essential nutrients cause abnormal condition and upsets the development in plants. In fact plants cannot survive without essential nutrient elements supplied from fertilizers or from organic and inorganic chemical in the soil. On the other hand, plant growth regulator is an organic component other than nutrients which in small amount promotes, inhibits or qualitatively modifies plant growth. In other words, it acts like a tonic which helps plants in making efficient use of the nutrients for their growth. Fertilisers provide the life giving nutrients which cannot be manufactured by plants. Plants cannot survive and develop without nutrient elements but can develop without external supply of plant growth regulator. Undisputedly for an item to be classified as fertilizer under Chapter 31, presence of any one or more of the N,P,K (i.e. Nitrogen, phosphorus and potassium) as essential constituent is a sine qua non. According to learned Commissioner Zymegold plus is having nutrients of seaweed extracts which is having plant grown hormones and mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ped directly 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. If needed, the help of Explanation Notes of HSN needs to be taken. HSN Notes of heading 3101 refers to animal or vegetable fertilizers, whether or not mixed together or chemically treated, fertilizers produced by the mixing or chemical treatment of animal or vegetable products. It is also stated that the heading covers animal or vegetable products converted into fertilizers by mixing together or chemical treatment (other than Superphosphates of Heading 3103). 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 seaw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise also seaweed extract powder are fertilizer in nature and classifiable under Tariff Item 31010099 of the Central Excise Tariff Act, 1985 and are excluded from the Tariff Heading 12.12 by virtue of HSN explanatory notes as they were procured by the appellants in powder form and not in natural form. As per the tables produced in earlier paragraphs showing the composition of ingredients, it has been noted that seaweed Extract contains the major portion of the raw material which is 15% in Zymegold Plus. It is the specific case of the appellants that the products in issue are plant origin based products and provide nutrient for growing the plants in a healthy and productive manner and as department has failed to produce any evidence to the contrary nor they produced any evidence on record to show that the products in issue are promoting or inhibiting growth by affecting the structure at the physiological level which is an essential characteristic of the plant growth regulator, therefore appellant's submission merit acceptance. A plant growth regulator excludes nutrients. They are defined as organic compounds other than nutrients what affect the physiological process of growth and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsecticides, fungicides, herbicides and disinfectants, all of which are intended to destroy pathogenic germs, insects, mosses and moulds, weeds, pests to achieve their results. They even considered as pesticides in some parts of the world whereas micronutrients are promoting only growth and health of the plant. A co-ordinate Bench of the Tribunal in the matter of CCE vs. M/s. Aries Agrovet Industries Ltd.; 2017-TIOL-2635-CESTAT-HYD, while taking note of the job etc. of micronutrients has come to the conclusion that micronutrients cannot modify inhibit retard the growth of plants like plant growth regulators and they only promote normal growth. Therefore, in our opinion, the presence of micronutrients in the products in issue before us does not make them plant growth regulator. We also find support on this from the decision of this Tribunal vide Order No.A/86615/ 2018 dated 31.5.2018 in the matter of CCE, Mumbai vs. Aries Agro-Vet Industries Ltd. in which it has been held that 'micronutrients' and 'macronutrients' are required for agriculture as fertilizers and 'micronutrients' are not plant growth regulators. 12. Evidences have also been produced by the appellants in support of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased product alongwith various other nutrients. It contains soluble like seaweed extracts, proteins, carbohydrates, inorganic salts and other inherent nutrients contained in the product of vegetable origin along with substantial portion of adjuvant and aqueous diluents. The appellant had also placed on record the test report on analysis of sample of Dripzyme issued by SGS India Pvt. Ltd.- a laboratory which also supports the claim of the appellant that it supplies nutrients whereas the department has failed to produce any test report to the contrary. 14. In yet another decision dated 6.11.2018 in the matter of Bahar Agrochem & Feeds Ltd.(supra) also the Tribunal has held that since the product Zymegold contains nitrogen and chlorine therefore is suffice to characterize the product as fertilizer. In arriving at the conclusion therein the Tribunal also relied upon its order dated 31.5.2018 in the matter of Aries Agri-vet Industries Ltd. (supra). We have also noticed that the department has taken resort to the definition of 'fertilizer' as provided in Fertilizer Control Order, 1985 for changing the classification which, according to us, could not have been done as the definition prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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