2004 (1) TMI 469 - AT - Central Excise

Summary

Issues: Classification of Streptomycin Sulphate 90% W/W + Tetracyclinc Hydro Chloride 10% W/W (for agricultural use) under chapter sub-heading 3808.10 or 3808.90.

Analysis:
1. The issue in this appeal revolves around the classification of the product Streptomycin Sulphate 90% W/W + Tetracyclinc Hydro Chloride 10% W/W for agricultural use. The appellant classified it under sub-heading 3808.10 attracting 8% duty, while the Department argued for classification under sub-heading 3808.90 attracting 18% duty.

2. The Commissioner (Appeals) opined that the product should be classified as a disinfectant under 3808.90, distinct from insecticides. The appellant contended that the product is licensed under the Insecticides Act and supported this claim with evidence, including declarations from Hindustan Antibiotics Ltd. and Bio-Tech Traders. The appellant argued that the product is commonly known and traded as an insecticide, herbicide, or fungicide.

3. The appellant further argued that even if considered a disinfectant, the product should be classified under 3808.10 as a pesticide if it kills micro or macro organisms. Various definitions of disinfectant and pesticide were presented to support this argument.

4. The appellant relied on legal precedents, including the Supreme Court's decision in Bombay Chemical Pvt. Ltd. v. Collector of Central Excise, to support their classification argument.

5. Additionally, the appellant challenged the imposition of a penalty under Rule 173Q, claiming it was unjustified in this case.

6. After reviewing the evidence, including the appellant's license under the Insecticides Act, the Tribunal found in favor of the appellant. They referenced the Supreme Court's decision in Bombay Chemical Pvt. Ltd. to support their conclusion that the product, even if a disinfectant, should be classified under 3808.10 as a pesticide due to its function in killing bacteria.

7. Consequently, the Tribunal set aside the previous order and allowed the appeal, ruling that the product should be classified under sub-heading 3808.10, attracting 8% duty, instead of 3808.90, as argued by the Department.