2024 (3) TMI 1036 - AT - Central Excise

Time Limitation - classification of goods - Bio-fertilizers - Single Micronutrients - Multi-micronutrients/ Micronutrient mixtures and Plant Growth Regulators (PGR) - HELD THAT - Having regard to the observations and submissions of the learned AR, as also the arguments made by the learned Advocate for the appellants, in the interest of justice, the issue of classification needs to be remanded back where the Original Authority will give them full opportunity to explain their case and also take into account the statutory provisions as well as the case laws cited by the appellant. The dispute of classification with respect to all the four products to the Original Adjudicating Authority is remanded to reconsider the same. The Adjudicating Authority shall also provide crossexamination of the Chemical Examiner, if prayed by the Appellants. Further, after hearing the appellants and examining the evidences produced, the Adjudicating Authority shall pass a reasoned order in accordance with law for the normal period. Penalties et aside - the Appeal is allowed in part and remanded in part.

Summary

Issues involved: Limitation and classification of Bio-fertilizers, Single Micronutrients, Multi-micronutrients/Micronutrient mixtures, and Plant Growth Regulators (PGR).

Limitation Issue:
The issue of limitation was disputed due to confusion regarding the classification of certain products. A Circular issued by the Board clarified the classification of these products, indicating a change of opinion by the Revenue. The Tribunal held that the extended period of limitation was not available to the Revenue as the change was mainly due to a change of opinion.

Classification Issue:
1. Bio-fertilizer: The appellants argued that Bio-fertilizer should be classified under heading 3101 instead of 3105 as proposed by the department.
2. Single Micronutrient: The appellants contended that they were not liable to Central Excise duty as they were only procuring and repackaging the products, not manufacturing them. The department considered this as a manufacturing process.
3. Multi-micronutrients/Micronutrient mixtures: The appellants disputed the classification under heading 3824 9090, arguing that these products should be classified based on their composition under Chapter 28 or Chapter 29, not Chapter 38.
4. Plant Growth Regulators (PGR): The appellants argued that PGRs were essentially Bio-fertilizers with additional compositions, not PGRs as classified by the department. They contested the reliance on a Circular and cited a judgment quashing a similar Circular for exceeding authority.

The Tribunal decided to remand the classification dispute of all four products back to the Original Adjudicating Authority for reconsideration. The Authority was instructed to provide cross-examination of the Chemical Examiner if requested by the Appellants. The decision was made in the interest of justice to allow the Appellants to explain their case fully and consider statutory provisions and case laws cited.

In conclusion, the Appeal was allowed in part and remanded in part, with all penalties imposed being set aside. The penalty on the Director of the appellant company was also set aside in light of the circumstances.