1996 (8) TMI 219 - AT - Central Excise

Summary

Issues:
Controversy over the classification of Sodium Nitrate under Tariff Heading 31.02 before and after 10-2-1987.

Analysis:
1. The appeal concerned the classification of Sodium Nitrate under Tariff Heading 31.02 before and after 10-2-1987. The dispute revolved around whether Sodium Nitrate should be considered a Nitrogenous Chemical Fertiliser based on Chapter Note 1 of Chapter 31.

2. The Department argued that Sodium Nitrate should be classified as a fertiliser under Heading 31.02 due to its use as a fertiliser, citing the Condensed Chemical Dictionary and its classification in the Harmonized System of Nomenclature (HSN) as a fertiliser. They relied on the alignment of Central Excise Tariff with HSN and a Supreme Court ruling for support.

3. The Respondents contended that prior to 10-2-1987, Sodium Nitrate was not known as a fertiliser in India based on various authorities and evidence. They highlighted the absence of Sodium Nitrate in the Fertiliser Control Order and Indian standards for fertilisers, indicating it was not recognized as a fertiliser in India.

4. The Tribunal observed that before 10-2-1987, the Central Excise Tariff was not fully aligned with the HSN, and the Department failed to provide evidence that Sodium Nitrate was known as a fertiliser in India. In contrast, the Respondents presented substantial evidence to the contrary. The subsequent amendments on 10-2-1987 specifically brought Sodium Nitrate under the category of fertilisers, making it clear that it was not classified as such before the amendment.

5. The Tribunal rejected the Department's argument that the subsequent amendments were clarificatory and should be given retrospective effect. The amendments were deemed to create a legal fiction by including Sodium Nitrate under the Heading of fertilisers from 10-2-1987 onwards. Consequently, the appeal of the Revenue was dismissed, and the Cross Objection of the Respondents was disposed of accordingly.