2023 (4) TMI 728 - AT - Central Excise

Classification of goods - MIRACULAN (which primarily contains Traicontanol equivalent to 0.05% of weight) - be classified under Chapter Sub-heading no. 3808 3040 as Plant Growth Regulator or under Chapter Sub-heading no. 3808 93 40 as plant growth promoter? - rejection of refund claims under the provisions of Section 11B of Central Excise Act, 1944 - HELD THAT - The primary basis of the department to hold that subject product MIRACULAN is a plant growth regulator is on the basis of the chemical test report given by departmental chemical examiner which says that the product contains Traicontanol equivalent to 0.05% by weight and may be considered as a plant growth regulator. As per the certificate of registration obtained by the appellant from the Directorate of the Plant Protection, Quarantine and Storage, Faridabad which works under the Ministry of Agriculture, Government of India as per requirement of Section 9(3) of the Insecticides Act, 1968. The registration which have been obtained by the appellant is for the Traicontanol 0.05% wherein, this product namely Traicontanol has been considered as insecticide. Also, on considering the literature which have been pointed out by the learned advocate for the appellant wherein, the Traicontanol 0.05% EC has been considered as the plant growth promoter. Since product MIRACULAN is based on Traicontanol 0.05% EC which is nothing but an insecticide as it requires a registration under Section 9(3) of the Insecticides Act, 1968 with the Directorate of the Plant Protection, Quarantine and Storage, Faridabad. From the literature as well as from the registration obtained by the appellant, it is found that the product MIRACULAN which is nothing but Traicontanol equivalent to 0.05% EC is a product of the insecticides. Whether the MIRACULAN can be considered as a plant growth regulator? - HELD THAT - On going through the relevant entries of the Central Excise Tariff i.e. 380810 and 380830, it becomes clear that plant growth regulators are the products which fall under the category of Herbicides, anti sprouting products and plant growth regulators classifiable under sub heading 380830 while the product which is under consideration is nothing but a Traicontanol which is an insecticide and thus, we are of the view that the product insecticide will clearly fall under the sub heading 380810. The products which are of nature of Herbicides, anti sprouting products and plant growth regulators fall under chapter heading no. 380830. In view of the above, the product MIRACULAN which primarily contents of Traicontanol which is an insecticide will certainly cannot be considered as a plant growth regulator. Reliance placed in the case of BAHAR AGROCHEM FEEDS PVT LTD., VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE 2011 (2) TMI 600 - CESTAT, MUMBAI - It can be seen from the above decision of the tribunal that the similar product which contains Traicontanol has been classified as insecticide and not a plant growth regulator and since the issue at hand is similar to the one decided by the above decision, the product MIRACULAN which primarily contains Traicontanol 0.05% by weight is a product under the category of Insecticides and cannot be considered as the plant growth regulator. Appeal allowed.

Summary

Issues Involved:
1. Classification of the product "MIRACULAN" under the Central Excise Tariff Act.
2. Rejection of refund claims under Section 11B of the Central Excise Act, 1944.

Summary:

Issue 1: Classification of the product "MIRACULAN"
The primary issue was whether "MIRACULAN," containing 0.05% Triacontanol, should be classified as a plant growth regulator or a plant growth promoter. The department contended that "MIRACULAN" is a plant growth regulator based on a chemical test report by the Chief Chemical Examiner, which identified Triacontanol as the active ingredient. The appellant argued that "MIRACULAN" is a plant growth promoter, supported by product literature and registration under the Directorate of Plant Protection, Quarantine, and Storage, Faridabad, which classified it as an insecticide.

The Tribunal referred to previous case laws, particularly Bahar Agrochem & Feeds Pvt. Ltd. v/s CCE, where Triacontanol was classified as an insecticide and not a plant growth regulator. The Tribunal concluded that "MIRACULAN," containing Triacontanol, should be classified as an insecticide under subheading 380810 of the Central Excise Tariff Act and not as a plant growth regulator under subheading 380830.

Issue 2: Rejection of Refund Claims
The appellant's refund claims amounting to Rs. 1,195,677/- were rejected by the Deputy Commissioner, who upheld the classification of "MIRACULAN" as a plant growth regulator. The Tribunal found that since "MIRACULAN" is classified as an insecticide, the appellant's claim for a higher abatement rate (35% instead of 30%) was valid. The Tribunal also noted that the department did not issue a show cause notice under Section 11A of the Central Excise Act, 1944, after the appellant filed the refund claim within the prescribed time limit.

Conclusion:
The Tribunal set aside the impugned order-in-appeal, allowing the appellant's appeal. It held that "MIRACULAN" is an insecticide and not a plant growth regulator, thereby entitling the appellant to the claimed abatement rate and refund. The Tribunal emphasized that the classification dispute did not warrant penalties or extended periods for duty demands. The decision was pronounced in the open court on 11.04.2023.