2018 (5) TMI 199 - AT - Central Excise

Benefit of N/N. 56/02-CE dated 14.11.2002 - Classification of goods - Vipul Booster - whether the product is classifiable under sub heading 3101.00 of Central Excise Tariff Act? - Held that - As this Tribunal in the case of Bahar Agrochem & Feeds Pvt Ltd., Versus Commissioner of Central Excise, Pune 2011 (2) TMI 600 - CESTAT, MUMBAI has held that the correct classification of the Vipul Booster is an insecticide under heading 3808.10 instead of plant growth regulator under heading 3808.20 of the Central Excise Tariff - the classification sought by the Revenue under sub heading 3101.00 as fertilizer is not applicable to the facts of the present case. Appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of product 'Vipul Booster' under Central Excise Tariff Act, 1985; Applicability of area-based exemption under Notification No.56/02-CE dated 14.11.2002; Entitlement to Cenvat credit; Refund claims rejection.

Classification Issue:
The appellants, engaged in manufacturing 'Vipul Booster,' classified it under Tariff Items 38083040 and 38089340 as a Plant Growth Regulator. The Revenue argued it should be classified as a fertilizer under subheading 3101.00. Show cause notices were issued for classification under subheading 3101.00, leading to rejection of refund claims. The Tribunal examined the issue in Bahar Agrochem & Feeds Pvt.Ltd. vs. CCE, Pune, where it was argued that 'Vipul Booster' should be classified as 3808.10. The Tribunal reviewed the product's use as a Plant Growth Regulator and an insecticide, ultimately classifying it as an insecticide under 3808.10. Consequently, the Revenue's classification under subheading 3101.00 was deemed inapplicable.

Area-Based Exemption and Cenvat Credit:
The appellants availed area-based exemption under Notification No.56/02-CE by using Cenvat credit on inputs after exhausting credit and paying duty through PLA in cash. The Revenue's view that 'Vipul Booster' is a fertilizer, not entitled to Cenvat credit, led to the rejection of refund claims. However, the Tribunal's classification of 'Vipul Booster' as an insecticide under 3808.10 negated the Revenue's stance, entitling the appellants to Cenvat credit and area-based exemption benefits.

Refund Claims Rejection:
The rejection of refund claims stemmed from the Revenue's classification of 'Vipul Booster' as a fertilizer under subheading 3101.00. However, the Tribunal's reclassification as an insecticide under 3808.10 led to setting aside the impugned orders and allowing the appeals with consequential relief. The Tribunal's decision clarified the correct classification of 'Vipul Booster,' resolving the dispute over Cenvat credit entitlement and area-based exemption under Notification No.56/02-CE.