2008 (5) TMI 170 - AT - Central Excise

Classification of Micronutrient - appellant has claimed classification of the same under sub-heading 3105.00 as fertilizer , whereas the Revenue has classified the same as plant growth regulator , falling under heading 3808 - it is not the Revenue s case that micronutrients are effective for growth inhibit or any other physiological change in the plant. As such, it has to be held that the same are fertilizer assessee s appeal allowed classifiable under chapter 31 as fertilizer

Summary

Issues: Correct classification of the product Micronutrient - whether as fertilizer or plant growth regulator.

In the present appeal, the dispute revolves around the proper classification of the appellant's product Micronutrient. The appellant contends that the product should be classified under sub-heading 3105.00 as a fertilizer, while the Revenue argues that it should be classified as a plant growth regulator under heading 3808. The Assistant Commissioner initially acknowledged the presence of Nitrogen in the product but held that it must be proven that the goods are used as fertilizer, ultimately upholding the Revenue's classification under Chapter Heading 3808.20.

Upon appeal, the Commissioner (Appeals) referred to Chapter Note 6 of Chapter 31, stating that the term 'other fertilizers' applies to products used as fertilizers and containing essential constituents like Nitrogen, Phosphorous, or Potassium. The Commissioner noted that the certificate granted for the product did not include Nitrogen separately, leading to the conclusion that the product cannot be classified as a fertilizer. This decision was challenged before the Tribunal.

The Tribunal considered precedents, including the Supreme Court's ruling in a related case, where micronutrients intended for plant growth were classified as "other fertilizers" under Heading 31.05. The Tribunal differentiated between plant growth promoters and regulators, noting that regulators can alter physiological processes in plants. By analyzing technical evidence, the Tribunal concluded that since the product in question did not inhibit or modify plant processes, it should be classified as a fertilizer.

Referring to the case of Karnataka Agro Chemicals, the Tribunal emphasized that Chapter 31 does not specify a required proportion of Nitrogen, Phosphorous, or Potassium for classification. Even if Nitrogen is present as a chelating agent, it can act as a fertilizing element, qualifying the product as an 'other fertilizer.'

Based on the established legal principles and previous decisions, the Tribunal determined that the issue at hand had been conclusively settled. By applying the reasoning from prior judgments, the Tribunal set aside the previous order and ruled in favor of the appellant, granting consequential relief.