2018 (2) TMI 1454 - AT - Customs

Classification of imported goods - 0.1% Natural Brassinolide fertilizer - appellant claimed classification of the said goods under Heading 31010099 as other animal or vegetable fertilizer whether or not mixed together or chemically treated; fertilizer produced by the mixing or chemical treatment or animal or vegetable products - Revenue objected to the said classification and sought classification of the product under Heading 38089340 as plant growth regulators . Held that - there is only a fine distinction between fertilizer and a plant growth regulator . While fertilizer is generally for promoting the growth of plant or crop for desired increased harvest, the plant growth regulators work on specific areas resulting in modified growth or even retardation of certain growth - n the absence of chemical test in the present imports the classification has necessarily to be done based on documents recovered, literature filed by the appellant. When specifically asked about availability of current imports or samples from past imports, no such samples were available and no imports currently. In such situation the classification has to be done with available literature and import documents only. The matter has to go back to the Original Authority to re-decide the issue - applicability of chapter note and also the instructions issued by the Board alongwith that of competent authorities of Central Insecticides Board & Registration Committee, Insecticides Act etc. are to be examined by the Original Authority - appeal allowed by way of remand.

Summary

Issues:
Dispute over correct classification of imported goods under Customs Act, 1962; Imposition of penalties under Sections 112, 114A, and 114AA of the Customs Act, 1962.

Analysis:
The case involved a dispute regarding the classification of goods imported by two main appellants. The goods declared as "0.1% Natural Brassinolide fertilizer" were claimed to be classified under Heading 31010099, while the Revenue sought classification under Heading 38089340 as "plant growth regulators." The Original Authority upheld the Revenue's classification, leading to a demand for differential duty and penalties under various sections of the Customs Act, 1962.

The appellants argued that they initially classified the goods under Heading 3105 and later accepted the Revenue's proposal to classify them under Heading 3101. They highlighted that the Revenue never conducted a chemical test on the goods and challenged the reliance on circulars and modifications in pesticide schedules for classification. They also contended that the goods required further dilution for retail sale, making classification under 3808 inappropriate.

On the other hand, the Revenue maintained that the goods were known and marketed as plant growth regulators, not fertilizers. They pointed out discrepancies in the appellants' documentation and argued that reclassification was justified based on available material facts.

The Tribunal noted the fine distinction between fertilizers and plant growth regulators, with experts recognizing Brassinolide as a plant growth regulator. However, the appellants raised a legal issue regarding classification under Heading 3808, which had not been examined earlier. Due to the absence of chemical tests on current imports, the classification had to rely on available literature and import documents.

Ultimately, the Tribunal decided to remand the matter back to the Original Authority for a fresh decision. The Original Authority was instructed to re-examine the applicability of chapter notes and instructions issued by relevant authorities, along with determining the limitation period and liability for penalties.

In conclusion, the appeals were allowed by way of remand for a comprehensive reevaluation based on the observations and analysis provided by the Tribunal.