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2017 (2) TMI 429 - AT - Central ExciseBenefit of exemptions under N/N. 5/1999-CE dated 28.02.1999, 3/2001-CE dated 01.03.2001, 6/2002-CE dated 01.03.2002 and 4/2006-CE dated 01.03.2006 - in terms of notifications, benefit of clearance of Sulphuric Acid without payment of duty if the same is used in the manufacture of fertilizer - whether goods such as Zinc Sulphate, Ferrous Sulphate and Magnesium Sulphate and Micro Nutrients manufactured by M/s. Chakradhar Chemicals are fertilizer or not? - Held that - If they are fertilizers then as provided in above stated notifications, they are eligible to procure Sulphuric Acid without payment of duty. In that event above stated 07 show cause notices become unsustainable. Now we have already gone through The Fertilizer (Control) Order and we also noticed that the goods manufactured by M/s. Chakradhar Chemicals are included as Micro Nutrients in Part A of Schedule I to The Fertilizer (Control) Order dated 25.09.1985 issued by Government of India. The said Order at Clause h has defined fertilizer means substance used as a fertilizer of the soil and specified in Part A of Schedule I. Since the goods manufactured by M/s. Chakradhar Chemicals are specified in Part A of Schedule I they are fertilizer - appeal allowed - decided in favor of appellant.
Issues:
1. Classification of goods manufactured by M/s. Chakradhar Chemicals as fertilizers. 2. Eligibility of M/s. Chakradhar Chemicals to procure Sulphuric Acid without payment of duty. 3. Interpretation of The Fertilizer (Control) Order, 1985 in relation to the goods manufactured. 4. Admissibility of exemption provided in notifications to M/s. Chakradhar Chemicals. Detailed Analysis: 1. Classification of Goods as Fertilizers: The case revolved around determining whether the goods produced by M/s. Chakradhar Chemicals, including Zinc Sulphate, Ferrous Sulphate, Magnesium Sulphate, and Micro Nutrients, qualified as fertilizers. The dispute arose from the contention that the goods did not meet the definition of fertilizers under the Central Excise Tariff Act, 1985. However, it was argued that the products fell under the definition provided in The Fertilizer (Control) Order, 1985, where Micro Nutrients, including Zinc Sulphate, were specifically listed in Part A of Schedule I. The Tribunal concluded that since the goods manufactured by M/s. Chakradhar Chemicals were specified in Part A of Schedule I, they were indeed classified as fertilizers, making them eligible for certain benefits. 2. Eligibility to Procure Sulphuric Acid: The issue of whether M/s. Chakradhar Chemicals were entitled to procure Sulphuric Acid without payment of duty was closely linked to the classification of their goods as fertilizers. The Tribunal noted that as per the relevant notifications, if the goods were classified as fertilizers, the company could procure Sulphuric Acid without duty payment. Given the classification of the products as fertilizers under The Fertilizer (Control) Order, 1985, M/s. Chakradhar Chemicals were deemed eligible for the exemption, rendering the show cause notices issued against them unsustainable. 3. Interpretation of The Fertilizer (Control) Order, 1985: The Tribunal extensively examined The Fertilizer (Control) Order, 1985 to ascertain the definition of fertilizers and the inclusion of specific products like Zinc Sulphate and Micro Nutrients in the list of fertilizers. The order defined fertilizers as substances specified in Part A of Schedule I, which included Micro Nutrients like Zinc Sulphate. By aligning the products manufactured by M/s. Chakradhar Chemicals with the items listed in the schedule, the Tribunal established the eligibility of the company for the benefits outlined in the notifications. 4. Admissibility of Exemption Provided in Notifications: The Tribunal ultimately ruled in favor of M/s. Chakradhar Chemicals, allowing their appeal and dismissing the appeals filed by the Revenue. By confirming the classification of the goods as fertilizers based on The Fertilizer (Control) Order, 1985, the Tribunal upheld the admissibility of the exemption provided in the notifications for procuring Sulphuric Acid without duty payment. Consequently, M/s. Chakradhar Chemicals were granted the benefit of the exemption, and any consequential relief was deemed applicable to them. In conclusion, the judgment by the Appellate Tribunal CESTAT ALLAHABAD resolved the issues by interpreting relevant laws and orders to establish the classification of goods, eligibility for exemptions, and the admissibility of benefits for the concerned party.
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