2014 (2) TMI 1009 - AT - Central Excise

Waiver of pre-deposit - Classification of the product Gronimix Neem Blended Organic Manure - fertilizer - Classification under CETA 3101 00 99 or CETA 3808 99 10 - Held that - literature/pamphlet available in para 85.1 of the adjudicating order dated 21-2-2013 as to what nutrient/nutrients are provided by the product manufactured/marketed by the appellants. On the contrary one of the features of the product mentioned in the pamphlet is that Application of Gronimix with N containing fertilizers regulates the release of nitrogen for longer time and increases the effect of fertilizers . This feature only seems to suggest that release of Nitrogen (N) from a fertilizer is also regulated by the product manufactured by the appellant. Under the heading Effectiveness of the pamphlet contained in para 85.1 of the adjudication order dated 21-2-2013 also the product has been advertised to control Nemotodes, termites and soil borne pests which have been appropriately interpreted by the adjudicating authority in paras 89.1 & 89.2 of the adjudication order. Appellants have, therefore not made out a prima facie case for complete waiver of the dues and are required to be put to certain conditions - Conditional stay granted.

Summary

Issues:
Classification of the product "Gronimix Neem Blended Organic Manure" under CETA 3101 00 99 or CETA 3808 99 10.

Analysis:
The case involved a dispute regarding the classification of the product "Gronimix Neem Blended Organic Manure" manufactured by the appellant. The appellant claimed the product to be a fertilizer under CETA 3101 00 99, while the show cause notice proposed its classification under CETA 3808 99 10. The adjudicating authority classified the product under 3808 99 10, confirming the demand and imposing penalties on the appellants.

The appellant argued that the manufacturing process involved selecting Neem fruit and seed, obtaining Neem oil and cake, segregating with an Expeller, mixing Neem Cake with Fine Dust, and producing Gronimix without adding any chemicals. The product was marketed as "Gronimix Neem Organic Manure" and sold based on its properties and dosages as a manure. Therefore, the appellant contended that the product should be classified as a fertilizer under Chapter 31 of the CET Act, 1988.

On the other hand, the Authorized Representative reiterated the findings of the adjudicating authority, supporting the correct classification under 3808 99 10 and the decision on demand and penalties.

Upon reviewing the submissions and case records, the Tribunal observed that the adjudicating authority defined a fertilizer as a substance added to soil to supply plant nutrients essential for plant growth. The literature and pamphlets indicated that the product regulated the release of nitrogen from fertilizers and controlled pests, suggesting a dual functionality beyond traditional fertilizers. As the appellants failed to establish a prima facie case for a complete waiver of dues, conditions were imposed. Appellant No. 1 was directed to pre-deposit Rs. 8 lakhs within 8 weeks, with a stay on the recovery of remaining amounts and penalties pending appeal disposal.

The judgment was pronounced on 19-7-2013 by the Appellate Tribunal CESTAT AHMEDABAD, with the decision outlined by the judges Shri M.V. Ravindran and H.K. Thakur.