2024 (11) TMI 608 - AT - Central Excise

Refund of Education Cess/Secondary and Higher Education Cess - classification of Triacontanol - whether the case requires to be remanded back to the original authority to decide the classification and to requantify the amount of refund accordingly? Eligibility of refund of Education Cess/Secondary and Higher Education Cess - HELD THAT - The issue is no long res integra. Hon ble Supreme Court of India held in the case of M/S. UNICORN INDUSTRIES VERSUS UNION OF INDIA OTHERS 2019 (12) TMI 286 - SUPREME COURT that the appellants, operating under area based exemption notification, are not eligible for refund of Education Cess/Secondary and Higher Education Cess. While the original dispute in the matter was the classification of Triacontanol and the dispute was whether the same was a plant growth regulator or a plant growth promotor. It is found that Commissioner (Appeals ) relied upon the decision of Tribunal in the case of BAHAR AGROCHEM FEEDS PVT LTD., VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE 2011 (2) TMI 600 - CESTAT, MUMBAI . The Tribunal held that ' it is clear that the product under consideration merits classification as an insecticide and not as a plant growth regulator'. The classification of Triacontanol has been settled by the Tribunal. Though, it is reported that the decision of the Tribunal has been challenged before the Apex Court, no stay has been granted and therefore there is no occasion to differ with the decision of the Tribunal. Therefore, no purpose will be served if the case is remanded back to the original authority for the classification of the impugned product i.e. Triacontanol as the original authority is bond by the decision of the Tribunal. Thus, the classification of the impugned product can be held to be under CETH 3808.10 as an insecticide - there is not reason to remand the matter back to the original authority for quantification also. The original authority can very well sanction the refund to the appellant as per the classification arrived at. The classification of Triacontanol shall be done under CETH 3808.10 - appellants are not eligible for refund of Education Cess/Secondary and Higher Education Cess - original authority shall calculate the amount of refund payable to the appellants - Appeal allowed in part by way of remand.

Summary

Issues:
1. Whether the case requires remand to the original authority for classification and quantification of refund.
2. Eligibility of the appellants for refund of Education Cess/Secondary and Higher Education Cess.

Detailed Analysis:

Issue 1: Remand for Classification and Refund Quantification
The appellants, M/s Crop Chemicals India Pvt Ltd, filed refund claims rejected partially due to Education Cess/Secondary and Higher Education Cess, and the classification of Triacontanol as a plant growth regulator (PGR) or plant growth promoter (PGP). The Commissioner (Appeals) held Triacontanol to be an insecticide under CETH 380810, based on a Tribunal decision. The appellants argued for a remand to the original authority for refund calculation per notification No. 56/2002-CE. The Tribunal noted the need for remand on classification and refund quantification. However, the Supreme Court precedent (Unicorn Industries Vs. UOI) established that appellants under area-based exemption are ineligible for Education Cess refunds.

Issue 2: Classification of Triacontanol
The dispute centered on whether Triacontanol was a PGR or PGP. The Commissioner (Appeals) relied on the Tribunal's decision in Bahar Agro Chem case, distinguishing between PGR and PGP based on technical literature. The Tribunal affirmed that Triacontanol, declared as a plant growth promoter, did not qualify as a PGR under Central Excise tariff. Moreover, the product's classification as an insecticide was supported by the Insecticide Act provisions, as Triacontanol was compliant with the Act's requirements. The Tribunal concluded that Triacontanol fell under CETH 3808.10 as an insecticide, rejecting the need for remand on classification and refund quantification. The appellants were directed to receive the refund amount based on the new classification.

In conclusion, the Tribunal partially allowed the appeal by classifying Triacontanol under CETH 3808.10 as an insecticide, denying Education Cess refunds to the appellants, and instructing the original authority to calculate and pay the refund accordingly.