2003 (9) TMI 636 - AT - Central Excise

Summary

Issues: Classification of pesticides for duty payment under Central Excise Tariff Act

In the judgment delivered by the Appellate Tribunal CESTAT, Mumbai, the issue involved the classification of pesticides manufactured by two companies for duty payment under the Central Excise Tariff Act. The companies, M/s. Hoechst Schering AgrEvo Ltd. and M/s. Meghmani Organics Ltd., manufactured pesticides in bulk form and cleared them without packaging for retail sale. The department contended that the goods should be classified under a different sub-heading, while the companies paid duty under sub-heading 3808.10. Show cause notices were issued proposing recovery of differential duty and penalties. The adjudication confirmed the demands and penalties, including a penalty on the managing director of M/s. Meghmani Organics Ltd.

The Tribunal noted that the issue had been settled by a judgment of the Supreme Court in the case of UOI v. Pesticides Mfg. & Formulators Association of India, wherein it was held that technical grade pesticides in bulk form are classified under Heading 38.08 and not under Chapter 28 or 29 of the Schedule to the Central Excise Tariff Act. Relying on the Supreme Court's decision, the Tribunal set aside the impugned orders and allowed the appeals filed by the companies.

In conclusion, the judgment clarified the classification of technical grade pesticides manufactured in bulk form for duty payment under the Central Excise Tariff Act. It emphasized the precedence set by the Supreme Court's decision and upheld that such pesticides fall under Heading 38.08, affirming the companies' classification and overturning the penalties imposed by the department.