2008 (12) TMI 475 - AT - Customs

Summary

Issues involved: Classification of imported micronutrients for agricultural use under Customs Tariff Heading 29.22 or CTH 31.05.

The judgment by the Appellate Tribunal CESTAT, CHENNAI addressed the issue of classification of imported micronutrients for agricultural use. The dispute revolved around whether the product should be classified under Customs Tariff Heading 29.22 or under CTH 31.05. The imported item, "LIBREL Brand Micronutrients," contained Ethylene Diamine Tetraacetic Acid (EDTA), nitrogen, zinc, manganese, and iron, and was used as a fertilizer. The department argued that nitrogen was not an essential constituent based on clarification from the Regional Fertilizer Control Laboratory. However, the International Institute of Biotechnology and Toxicology certified that nitrogen was essential for plant growth as it promoted the delivery of micronutrients to the plant system. The product also contained zinc, manganese, and iron deliberately added, which excluded it from Heading 3105.90. The Tribunal held that the imported item fell under CTH 3105.90 as a micronutrient, allowing the benefit of exemption from payment of CVD and SAD under specific notifications and setting aside the original order.

In another aspect of the judgment, Appeal No. E/96/2008 and others arising from an order holding the product under Chapter Heading 29.22 were also addressed. The order confirmed duty demand and imposed penalties on the involved parties. However, the Tribunal, based on the classification under Chapter Heading 31.05, found that there was no deeming fiction in Chapter 31 of the CETA, 1985 regarding repacking and relabelling constituting manufacture. As a result, the impugned orders were set aside, and the appeals were allowed.

The judgment, delivered by Ms. Jyoti Balasundaram and Shri P. Karthikeyan, highlighted the importance of proper classification under the Customs Tariff Act, 1975, emphasizing the essentiality of elements in determining the classification of micronutrient products for agricultural use.