1996 (7) TMI 387 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985; Applicability of duty on manufactured goods; Time limitation for imposing duty; Interpretation of plant growth regulators as insecticides under Insecticides Act.

The judgment by the Appellate Tribunal CEGAT, New Delhi involved an appeal against the order of the Additional Collector of Central Excise, Faridabad regarding the classification of goods manufactured by the appellants under the trade name 'Dhanumon'. The dispute centered around whether the goods should be classified under Item No. 3810.90 as contended by the appellants or under Item No. 3810.10 as argued by the department. The Additional Collector alleged that the appellants had manufactured and cleared 'Dhanumon', a plant herbicide, without the necessary licenses, duty payments, records, and other formalities, leading to a demand for duty payment and penalties.

In the adjudication, the Additional Collector determined that 'Dhanumon' was a plant hormone and not an insecticide based on its composition and technical literature provided by the appellants. The appellants argued that 'Dhanumon' could act as a plant growth regulator, herbicide, and fungicide at different concentrations, citing expert opinions from books like "Phal Vigyan" and "Chemistry of Pesticides". The appellants also referenced a previous Tribunal decision distinguishing plant growth regulators from insecticides, which was later reversed by the Supreme Court in another case.

The Tribunal analyzed the composition of 'Dhanumon' and the expert opinions presented by both parties. It held that 'Dhanumon' could not be classified as a herbicide or fungicide under Item 3810.90 but rather as a plant growth regulator falling under Heading 3808.90, affirming the Additional Collector's classification decision. The Tribunal also addressed the question of time limitation for imposing duty, noting that the show cause notice issued by the Additional Collector fell within the 5-year period specified under the law.

Additionally, the Tribunal considered a previous order regarding the imposition of penalties and found that since there was no evidence of suppression of facts or willful misstatement by the appellants, the penalty imposed by the lower authorities was upheld. Ultimately, the Tribunal upheld the order of the Additional Collector and rejected the appeal, concluding that 'Dhanumon' was correctly classified as a plant growth regulator and that the duty demand was within the prescribed time limit.