TMI Blog2023 (7) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... ich includes animal dung, animal excreta others. The applicant has not specifically pointed out to us as to how the product Rapigro would fall under the description Others ie CTH 31010099. Moreover, at the cost of repetition, the applicant has failed to divulge as to what is the addition of other organic nutrients obtained through fermentation which is added by M/s. Sowbhagya to the vegetable protein to manufacture CPH Liquid. In the present era other than the classical PGRs various other new plant growth promoter/regulator/stimulator are discovered and are currently used by the farmer for increasing their yield/quality of their produce. As per the explanation of Circular, essential plant nutrients includes any primary nutrients viz nitrogen, phosphorus and potassium, secondary nutrients like calcium, magnesium and sulphur and micro nutrients like zinc, manganese, copper, iron, boron and molybdenum. On going through the analytical composition provided by the applicant [refer para 2.4] we do not find any mention or inclusion of these secondary or micro nutrients. The circular dated 6.4.2016 clarifies that It may also be noted that notifications issued under FCO are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or short - M/s. Isagro] merged with P I Industries Ltd the B2C vertical of Isagro was transferred to M/s Jivagro Limited, a newly incorporated subsidiary of PI Industries, which was approved by the National Company Law Tribunal vide its order dated 6.12.2021. 3. Prior to this merger, M/s. Isagro was engaged in the manufacture of the product Rapigro was classifying it under TI 3507 of CETA 85. However, Central Excise authorities disputed the same and ordered its classification under Tl 38089340, as a plant growth regulator . Various show cause notices were issued, which are presently pending before various authorities. 4. The applicant further states that they are manufacturing and supplying the product Rapigro by classifying it under 3507. It is further stated that according to them, the product merits classification under CTH 31010099 5. The applicant has given detailed reasoning to substantiate their belief that Rapigro merits classification under 31010099, viz that they have applied have been granted registration for the product as a bio stimulant under clause 20C(5)(b) of the Fertilizer (Inorganic. Organic or mixed) Control Order 1985 [for short -FCO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TI 3507 relates to Enzymes; prepared enzymes not elsewhere specified or included; that it is a residuary entry for enzymes not covered elsewhere; Rapigro is not an enzyme because Enzymes are organic substances produced by living cells; Enzymes have property of causing regulating specific chemical reactions inside or outside living cells without undergoing any change in their chemical structure Enzyme solely has protein or protein combined with a non protein compound of low molecular weight acting as a cofactor Enzymes do not include fertilizing elements eg Nitrogen, Phosphorus. Rapigro contains organic fractions derived through fermentation process containing growth promoter, organic acid, protein protein hydrolyzates, amino nitrogen, peptides, vitamins micronutrients Rapigro is a complex product containing nitrogen is a bio-stimulant therefore a fertilizer and not an enzyme. Rapigro is a bio-stimulant is registered with both Central and State Government; that it cannot be relegated to residual entry of heading 3507; that they wish to rely on rule 1 of the General Rules of Interpretation which states that if a product can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission/interpretation of law in respect of question on which the advance ruling is sought. 12. Before dealing with to the submissions made by the applicant, we would like to reproduce the competing tariff entries, for ease of reference: Chapter 31 Tariff Item Description of goods Unit Rate of duty Standard Preferential Areas (1) (2) (3) (4) (5) 3101 ANIMAL OR VEGETABLE FERTILISERS, WHETHER OR NOT MIXED TOGETHER OR CHEMICALLY TREATED; FERTILISERS PRODUCED BY THE MIXING OR CHEMICAL TREATMENT OF ANIMAL OR VEGETABLE PRODUCTS 3101 00 - Animal or vegetable fertilisers, whether or not mixed together or chemically treated; fertilisers produced by the mixing or chemical treatment of animal or vegetable products : 3101 00 10 --- Guano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --- Other enzymes of microbial origin: 3507 90 61 ---- Streptokinase kg. 10% - 3507 90 62 ---- Amylases enzymes kg. 10% - 3507 90 69 ---- Other kg. 10% - --- Enzymes for pharmaceutical use, other than streptokinase : 3507 90 71 ---- Papain, pure, of pharmaceutical grade kg. 10% - 3507 90 79 ---- Other kg. 10% - --- Other: 3507 90 91 ---- Enzymatic preparations containing food stuffs kg. 10% - 3507 90 99 ---- Other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10% - 3808 91 23 ---- Dimethoate, technical grade kg. 10% - 3808 91 24 ---- Melathion kg. 10% - 3808 91 31 ---- Endosulphan, technical grade kg. 10% - 3808 91 32 ---- Quinal phos kg. 10% - 3808 91 33 ---- Isoproturon kg. 10% - 3808 91 34 ---- Fenthion kg. 10% - 3808 91 35 ---- Cipermethrin, technical grade kg. 10% - 3808 91 36 ---- Allethrin kg. 10% - 3808 91 37 ---- Synthetic pyret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --- Copper oxychloride kg. 10% - 3808 92 60 --- Goods specified in Supplementary Note 5 to this Chapter kg. 10% - 3808 92 70 --- Goods specified in Supplementary Note 6 to this Chapter kg. 10% - 3808 92 90 --- Other kg. 10% - 3808 93 -- Herbicides, anti-sprouting products and plant-growth regulators 3808 93 10 --- Chloromethyl phenozy acetic acid (M.C.P.A) kg. 10% - 3808 93 20 --- 2:4 Dichloro phenozy acetic acid its and esters kg. 10% - 3808 93 30 --- Gibberellic acid kg. 10% - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are mainly intended for use in medicine or in scientific research. They are not as important in international trade as enzymatic concentrates and prepared enzymes. (B) Enzymatic concentrates. These concentrates are generally, obtained from either aqueous or solvent extracts of animal organs, of plants, of micro-organisms or of culture-broths (the latter derived from bacteria, moulds, etc). These products, which may contain several enzymes in various proportions, can be standardised or stabilised. It should be noted that certain standardising or stabilising agents may already exist in the concentrates in variable quantities, deriving either from the fermentation liquor or from the clarifying or precipitating processes. The concentrates can be obtained, for example, in powder form by precipitation or freeze-drying or in granular form by using granulating agents or inert supports or earners. (C) Prepared enzymes not elsewhere specified or included Prepared enzymes are obtained by further dilution of the concentrates mentioned in Part (B) above or by intermixing isolated enzymes or enzymatic concentrates. Preparations with substances added, which render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not merit classification under CETH 3105. Further, the specific exclusion of separate chemically defined compounds as laid down in chapter note 1 (b) and in the HSN Explanatory Notes to the heading 3105.90, reinforce the above conclusion. It may also be noted that notifications issued under Fertilizer Control Order are not relevant for deciding classification under the Central Excise Tariff. 5. Mixtures of micronutrients/multi-micronutrients with fertilisers are also manufactured and sold. They shall be classified according to their essential characters and general rules for interpretation of the schedule to the tariff. Where the essential constituent giving character to the mixture is one or more of the three elements namely Nitrogen, Phosphorous or Potassium, the mixture shall be classified under any of the heading of Chapter 31, depending upon its composition. On the other hand, where the essential character of the product is that of mixture of micronutrients/multi-micronutrients having predominately trace elements, it shall be classified under CETH 3824 as chemical products not elsewhere specified or included. 15. Explanatory notes of HSN 3808 states as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lizer is not figuring in the schedule to FCO; that they purchase maize protein treated with Nzyme then treat with mild acids later with ammonia liquid for converting into CPH; its use is on crops as foliar spray for improving the crop quality yield; CPH liquid is to be used in large quantities. 19. M/s. Jivagro Limited has stated that that they are manufacturing supplying the product Rapigro under TI 3507 since December 2021. The applicant now feels that their product falls under 31010099. An interesting observation that needs a mention is the rate of GST under the various competing entries viz Sr.No. Tariff Item (TI) Rate of GST Remarks 1 3101 5% The applicant now wants Rapigro to be classified under this TI. 2 3507 18% The applicant and its predecessor M/s. Isagro, was classifying the product Rapigro under this TI. 3 3808 18% Department in the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate from M/s. Sowbhagya, the contents of which is already reproduced supra to substantiate their argument that it is derived from vegetable source ie maize protein (Gluten). 24. In the aforesaid backdrop, Rapigro cannot be termed as an Enzyme. Hence, we agree with the contention put forth by the applicant that the product would not fall within the ambit of 3507. However, this is notwithstanding the fact that in the past when proceedings were launched, the applicant vehemently contended before the authorities under the Central Excise Act, 1944, that Rapigro, fell within the ambit of 3507. 25. The benefits of the product Rapigro, as mentioned in the label [para 2.7] and the technical bulletin [para 2.8], is as under viz it maximizes utilization of available soil nutrients; leads to better root growth; it improves crop quality increases yield significantly; leads to taller/vigorous plant/larger leaves; better flowering, better fruit in larger size; it increases plant resistance/tolerance to pest and diseases; it rejuvenates plants exposed to climate stresses and other injuries; it reduces Hower drop and fruit fixation; it is non-toxic and safe fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves and flowers, elongation of stems, development and ripening of fruits etc. Synthetic organic chemicals are also used as PGRs and are industrially produced and marketed. A list of some of the PGRs industrially produced in India is enclosed with the reply of IARI. 3.2 It would thus be noted that PGRs are different from nutrients, be it macronutrient or micronutrient. The difference between PGR and micronutrient has been clearly brought out in the reply from ICAR. PGR as a substance is specifically covered under CETH 3808. More specifically, Gibberellic acid and Plant Growth regulators are respectively covered under tariff item 3808 9330 and 3808 9340. [emphasis added] Sr.No. Points Comments iii) What are Plant Growth regulators (PGRs) ? What are their functions in the plant? PGRs: Plant growth regulators defined as organic compounds other than nutrients that affect the physiological processes of growth and development in plants when applied in low concentrations. Plant growth regulators are active at low concentrations (1-10ng/ nl) in promoti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ERS PRODUCED BY THE MIXING OR CHEMICAL TREATMENT OF ANIMAL OR VEGETABLE PRODUCTS This heading covers: (a) Animal or vegetable fertilisers, whether or not mixed together or chemically treated; (b) Animal or vegetable products converted into fertilisers by mixing together or chemical treatment (other than bone superphosphates of heading 31.03) However, these products fall in heading 31.05 when put up in the forms or packages described so that heading The heading includes, inter alia : (1) Guano, which is an accumulation of the excreta and remains of sea birds, found in large quantities on certain islands and coasts, it is both nitrogenous and phosphatic, and it usually a yellowish powder with a strong ammoniacal odour (2) Excreta, dung, soiled fleece waste and manure, unsuitable for use other than as fertilisers. (3) Rotted vegetable products, unsuitable for use tuber than as fertilisers. (4) Disintegrated guano (5) Products resulting from the treatment of leather with sulphuric acid. (6) Compost consisting of rotted waste vegetable and other matter where decay has been accelerated or controlled by treatment with lime, etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d together or chemically treated, Guano, Other which includes animal dung, animal excreta others. The applicant has not specifically pointed out to us as to how the product Rapigro would fall under the description Others ie CTH 31010099. Moreover, at the cost of repetition, the applicant has failed to divulge as to what is the addition of other organic nutrients obtained through fermentation which is added by M/s. Sowbhagya to the vegetable protein to manufacture CPH Liquid. In the present era other than the classical PGRs various other new plant growth promoter/regulator/stimulator are discovered and are currently used by the farmer for increasing their yield/quality of their produce. This fact is forthcoming from Sr. No. (iv) of the comments of ICAR -Indian Agricultural Research Institute, appended with circular No. 1022/10/2016-CX dated 6.4.2016, which is reproduced below for ease of reference viz . iv) Kindly give examples of Plant Micro Nutrients and Plant Growth Regulators naturally found. Kindly also give examples of Plant Growth Regulators and Plant Growth Hormones which are produced industrially and sold in the market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Central Excise Tariff . The averment therefore, that since they have applied and have been granted registration as a bio stimulant under FCO would not be the sole determining factor under the present proceedings. 34. Further the circular dated 6.4.2016 goes on to state that Where the essential constituent giving character to the mixture is one or more of the three elements namely Nitrogen, Phosphorus or Potassium, the mixture shall be classified under any of the heading of chapter 31, depending upon its composition. Again ongoing through the analytical composition, we find that neither Nitrogen, Phosphorus or Potassium is the essential constituent giving character to the product Rapigro . 35. We find that the applicant has also attached the Rapigro Liquid Technical Literature. The introduction states the following viz that it is a stable, balanced, systemic biologically active liquid concentrate consisting of proteins, protein hydrolysates, amino acids, organic acids and short chain peptides; it is derived biologically through the process of fermentation and selection of certain products obtained through the fermentation process certain cellular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally non-toxic 35.2 A further reading of the technical bulletin of Rapigro states the following viz Rate of application - 2 ml/lt water or 200 ml/acre. 36. We understand that both fertilizer and plant growth regulator are different. While a fertilizer promotes growth of the plant, a plant growth regulator on the other hand also stimulates plant growth. The plant growth regulator in-fact promotes/inhibits the growth by affecting the structure at the physiological level. Whereas fertilizers provide nutrients, - the plant growth regulator is an organic component which when applied in low concentration promotes, inhibits or qualitatively modifies plant growth. Plant growth regulator further helps plants in making efficient use of the nutrients for their growth. Plant growth regulators are classified under CETH 38.08 alongside other insecticides, fungicides, herbicides and disinfectants. In-fact plant growth regulator are even considered as pesticides in some parts of the world. It is in this background, that on a conjoint reading of the technical bulletin, characteristics, rate of application, supra we observe as under In terms of the circular dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y held that as far as the product in question is concerned in terms of the findings recorded supra, the end use and the technical bulletin, the product Rapigro is a plant growth regulator. o Soulfeed Plant Product Services P Ltd [2018 (364) ELT 999 (Tri)] The Hon ble Tribunal in this case states that as long as they answer to the description and are in bulk, these including mixtures of nitrates, phosphates and potassium would be classifiable as fertilizer. The facts of the present dispute are not similar to the one mentioned in the case and therefore the averment that the judgement is applicable to their dispute is not correct. o Karnataka Agro Chemicals [2007(215) ELT 470 (Tri)] (2008(227) ELT 12 (SC) the aforementioned judgement, relied upon by the applicant has been remanded back by the Hon ble Supreme Court as reported at [2008 (227) E.L.T. 12 (S.C.)]. Therefore the reliance on the said judgment is not tenable. Further the judgement relies on circular dated 19.5.1998. However, vide circular dated 6.4.2016, the said circular dated 19.5.1998 has been rescinded. o Atul Glass Industries Ltd (1986 (25) ELT 473 (SC)] The relevant head notes s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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