2015 (10) TMI 1777 - AT - Central Excise

Classification of Ruszyme G - plant growth regulator or bio-fertilizer - Classification under tariff Heading 3808.20 or under heading 31.01 - Held that - It is seen that the chemical examiner has not conducted any tests and has given an opinion based on appellants literature. We find that for similar product plantozyme (also containing cytokinin) CESTAT in case of Leeds Kem (2000 (9) TMI 168 - CEGAT, COURT NO. III, NEW DELHI) had considered the issue of classification in great detail and held that the product is a biofertilizers and mere presence of small amounts of cytokinin would not detract from its character of bio fertilizer classifiable under Heading 31.01 and not under Heading 38.08. - appellants had not cleared the goods clandestinely and claimed a classification they thought was appropriate and therefore, the allegation of willful misstatement/suppression is not sustainable merely because Revenue considered that classification inappropriate - Decided in favour of assessee.

Summary

Issues: Classification of the product 'Ruszyme G' as a plant growth regulator or bio-fertilizer for duty purposes.

Analysis:
1. The appeal was filed against an order confirming the duty demand and penalty imposition on 153 bags of Ruszyme 'G'. The issue revolved around the classification of the product as a plant growth regulator under Heading 3808.20 or as a bio-fertilizer under Heading 31.01.

2. The appellants argued that they classified the product as a bio-fertilizer in good faith, believing it to be so. They contended that the product contained seaweed, a natural fertilizer, and cited relevant case laws to support their classification.

3. The adjudicating authority, however, classified the product as a plant growth regulator based on literature and a chemical examiner's report. The literature indicated the presence of plant hormones and growth regulators in the product.

4. The chemical examiner's report highlighted the absence of essential fertilizing elements like Nitrogen, Phosphorus, and Potassium in the product. However, the report did not conduct any tests and relied solely on the appellants' literature.

5. Referring to previous judgments, the Tribunal noted that similar products like 'plantozyne' and 'Dhanzyme' were classified as bio-fertilizers despite containing plant hormones. The Tribunal emphasized that the presence of small amounts of cytokinin did not change the product's classification.

6. Consequently, the Tribunal concluded that the issue of classification of the product as a bio-fertilizer was settled in favor of the appellants. The Tribunal also dismissed the allegation of willful misstatement or suppression since the appellants acted in good faith based on their understanding of the product.

7. Ultimately, the Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellants based on the settled classification of the product as a bio-fertilizer.