2024 (12) TMI 1451 - AT - Central Excise

Classification of goods - Siapton 10L and Isabion - classifiable as fertilizer under Central Excise Tariff Item No. 3101 00 99 of the first schedule of Central Excise Tariff Act, 1985 as declared by the appellant or Plant Growth Regulator falling under Central Excise Tariff Item No. 3808 93 40 as claimed by the Department? - HELD THAT - Since the larger bench of this tribunal has finally decided the question in dispute in these appeals in 2024 (9) TMI 1655 - CESTAT AHMEDABAD (LB) , these appeals can be disposed of in accordance with the decision given by the larger bench. It was held by Larger Bench that ' (i) A plant growth promoter cannot be equated with a plant growth regulator. A plant growth promoter only promotes the growth of the plant and does not inhibit it. On the other hand, a plant growth regulator inhibits, promotes or otherwise alters the physiological processes in a plant. The view to the contrary taken by the Division Bench in the referral order is not correct; and (ii) Siapton 10L and Isabion merit classification as fertilizers under ETI 3101 00 99 and not as a plant growth regulator under ETI 3808 93 40.' Conclusion - The goods in question namely Siapton 10L and Isabion are correctly classifiable under Central Excise Tariff Item No. 31010099 and the same is not falling under Central Excise Tariff Item No. 38089340. The impugned orders are set aside - Appeals are allowed

1. ISSUES PRESENTED and CONSIDERED

The primary legal issue in this case was whether the products "Siapton 10L and Isabion," manufactured by the appellant, should be classified as fertilizers under Central Excise Tariff Item No. 3101 00 99 or as plant growth regulators under Central Excise Tariff Item No. 3808 93 40.

2. ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents:

The classification of goods under the Central Excise Tariff Act, 1985, was central to this case. The relevant tariff entries were Chapter 31, which deals with fertilizers, and Chapter 38, which includes plant growth regulators. The legal question revolved around whether the products in question could be classified as fertilizers or plant growth regulators based on their composition and function.

Court's interpretation and reasoning:

The court examined the composition and function of the products Siapton 10L and Isabion. It considered the definitions and characteristics of fertilizers and plant growth regulators, noting that fertilizers provide essential nutrients to plants, while plant growth regulators influence specific physiological processes.

Key evidence and findings:

The court reviewed technical literature, expert opinions, and test reports. It found that both Siapton 10L and Isabion are biostimulants that provide nutrients to plants, primarily through amino acids and peptides. The evidence showed that these products do not alter physiological processes in plants, which is a characteristic of plant growth regulators.

Application of law to facts:

The court applied the definitions and characteristics of fertilizers and plant growth regulators to the facts of the case. It concluded that the products should be classified as fertilizers because they provide nutrients and do not modify or control plant physiological processes.

Treatment of competing arguments:

The court considered arguments from both sides. The appellant argued that the products are fertilizers, supported by expert opinions and technical literature. The department contended that the products are plant growth regulators, citing their function as biostimulants. The court found the appellant's evidence more persuasive.

Conclusions:

The court concluded that Siapton 10L and Isabion should be classified as fertilizers under Central Excise Tariff Item No. 3101 00 99, not as plant growth regulators under Central Excise Tariff Item No. 3808 93 40.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning:

"A plant growth promoter cannot be equated with a plant growth regulator. A plant growth promoter only promotes the growth of the plant and does not inhibit it. On the other hand, a plant growth regulator inhibits, promotes or otherwise alters the physiological processes in a plant."

Core principles established:

The court established that the classification of products under the Central Excise Tariff should be based on their primary function and composition. Products that provide nutrients and do not alter physiological processes are classified as fertilizers.

Final determinations on each issue:

The court determined that Siapton 10L and Isabion are fertilizers under Central Excise Tariff Item No. 3101 00 99, and the appeals were allowed with consequential relief.

In conclusion, the judgment clarified the classification criteria for fertilizers and plant growth regulators, emphasizing the importance of the products' primary function and composition in determining their classification under the Central Excise Tariff Act, 1985.

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