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Issues: Classification of goods for customs duty and countervailing duty.
Analysis: 1. The appeal challenged the classification of goods held as fungicides for customs duty under Customs Tariff Heading 29.42 and for countervailing duty under Central Excise Tariff Heading 29.42. 2. The appellant argued that while Customs Tariff Heading 29.42 was correct for customs duty, the proper heading for countervailing duty should be 38.08 as it specifically refers to 'fungicides'. The appellant contended that 'Dodine' imported by them is a fungicide and not merely a fungicidal chemical. They cited the Insecticides Act, 1968, to support their claim that Dodine is classified as a fungicide without purity conditions. The appellant highlighted the difference in conditions between Customs Tariff Heading 38.08 and Central Excise Tariff Heading 38.08, asserting that the goods should be classified under the latter for countervailing duty. 3. The purity percentage and dilution were discussed, with references to previous cases and clarifications by CBEC. The appellant argued that purity or packing alone should not determine classification, citing various trade notices and orders. The Tribunal noted that dilution of technical grade pesticides does not amount to manufacture, as clarified by CBEC orders and court judgments. The Tribunal concluded that the impugned goods should be classified under Heading 38.08 for countervailing duty. 4. The Revenue contended that the form in which goods are presented for assessment is crucial for customs duty, and subsequent processes do not affect classification. They highlighted the use of Notification as a guide but not determinative of classification. 5. The Tribunal observed that Customs Tariff Heading 38.08 and Central Excise Tariff Heading 38.08 were not fully aligned. While Customs Tariff Heading 38.08 specifies conditions for fungicides, Central Excise Tariff Heading 38.08 does not, leading to the conclusion that the goods should be classified under Heading 38.08 for countervailing duty. 6. The Tribunal analyzed the Notification exempting goods under Chapter 29 from duty and its relevance to the classification of the impugned goods. They emphasized that dilution does not amount to manufacture and that the exemption Notification cannot determine classification. Various court judgments and CBEC orders were cited to support the classification under Heading 38.08. 7. The Tribunal referenced CBEC orders and trade notices indicating that pesticide chemicals are classifiable under Heading 38.08, irrespective of purity or packing. They highlighted previous cases where dilution of chemicals did not change their classification. The Tribunal concluded that the impugned goods were correctly classifiable under Heading 38.08 for countervailing duty. 8. The Tribunal set aside the impugned order and allowed the appeal, noting the non-speaking nature of the Collector (Appeals) order as an additional ground for setting it aside.
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