TMI Blog1996 (9) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... is required. - 5404 of 1993 - - - Dated:- 10-9-1996 - S.P. Bharucha and K. Venkataswami, JJ. [Order]. - These appeals concern the classification of micronutrients for the purposes of Excise duty. Micronutients are mixtures of soluble salts of elements like calcium, magnesium, manganese, zinc, iron, copper, boron and molybdenum. They are mixed in stated percentages to get a formulated product which assists the growth of plants. The appellants manufacture micronutrients. 2.The facts being similar, we set out those of one of the two appeals. 3.During the period October, 1989 to November, 1989, samples of micronutrients were drawn and tested by the Deputy Chief Chemist of the Union of India who opined that micronutrients were not "plant growth regulators." However, on 6th November, 1989, the Collector of Central Excise issued to the appellants (in Civil Appeal No. 5404 of 1983) a notice to show cause why the micronutrients made by them should not be classified as "plant growth regulators" under Heading 38.08.90. The show-cause notice related to the period 1st April, 1986, to 23rd September, 1989. The appellants showed cause and led evidence at the personal hearing before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 22nd February, 1990, and reverted to the stand taken in the show-cause notice itself, namely, that the micronutrients were classifiable as "plant growth regulators" under Heading 30.08. After hearing the appellants, the Collector confirmed the demand made in the show-cause notice on 6th November, 1990. The appellants appealed to the Central Excise and Gold (Control) Appellate Tribunal which, by the order under appeal, upheld the classification but limited the demand to the period of six months immediately preceding the date of the show-cause notice. 6.Subsequent to the filing of the appeals in this Court, a circular (now called "the later circular") was issued by the Board which is crucial to these appeals. The later circular is dated 21st November, 1994. It was addressed to all Collectors of Central Excise on the subject of the classification of micronutrients for the purposes of Central Excise. The later circular invited attention to the earlier circular and "and the instructions contained' therein. It noted that the earlier circular had stated that micronutrients were appropriately classifiable under Heading 38.08 as "plant growth regulators". The Indian Micro Fertilise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature and do not possess statutory significance. In this sense, the earlier circular, not having been issued under Section 37B, had to be regarded as advice. The Section Notes and Chapter Notes in the Tariff Act were enacted provisions. Thus, Note 6 of Chapter 31 governed the issue. (It states that for the purposes of Heading 31.05 the term "other fertilisers" applies only to products of a kind used as fertilisers which contain as an essential constituent at least one of the fertilising elements, nitrogen, phosphorous or potassium.) Such products as did not contain these elements could not be brought under the statutory definition of fertilisers by the invocation of the Interpretative Rules. The earlier and later circulars, not having been issued under the provisions of Section 37B, were merely advisory in nature and could not have any statutory effect. The scope of Chapter 31 to include micronutrient mixtures as fertilisers had to be by enactment and not by advisory circulars. In the absence of any amendment by enactment of Chapter 31, the appellants could not take shelter under the later circular in the matter of the classification of their product, which classification had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise (Appeals) in the exercise of his appellate functions." Section 37B contemplates the issuance by the Board of orders, instructions and directions to Central Excise officers. Such orders, instructions and directions are to be issued when the Board considers it necessary or expedient to do so to achieve uniformity in classification of excisable goods and the levy of excise duty thereon. Central Excise officers are obliged to observe and follow these orders, instructions and directions. The orders, instructions and directions may not relate to a particular assessment or case or interfere with the appellate functions of a Collector. 12.The first question, now, is whether the earlier and later circulars are orders, instructions or directions to Central Excise officers within the meaning of Section 37B which the Central Excise officers are bound to observe and follow. Both circulars are addressed to all Principal Collectors of Central Excise and Customs, all Collectors of Central Excise and Customs, all Collectors of Central Excise, all Collectors of Customs and all Collectors of Central Excise and Customs (Appeals). Both circulars require that their contents "be brought to the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
