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TMI Blog2010 (2) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption under S.No. 35 alone. Contention that goods classifiable as fertilizer not raised before. Impugned order denying exemption sustainable. - E/2133-2134/2009 - 69-70/2010-EX(PB), - Dated:- 15-2-2010 - Justice R.M.S. Khandeparkar, President and Shri Rakesh Kumar, Member (T) Shri Jatinder Mohan, Advocate, for the Appellant. Shri Virender Choudhary, DR, for the Respondent. [Order per : Justice R.M.S. Khandeparkar, President (Oral)]. - These matters are taken up for final disposal by the consent of the parties, in terms of order passed in the stay application Nos. 2205 2206 of 2009. 2. Since common questions of law and facts arise in both the appeals, they were heard together and are being disposed of by this common order. 3. We have heard at length the learned advocate for the appellants and the learned DR for the respondent. We have perused the records placed before us. Both the appeals arise from order dated 30-4-2009 passed by the Commissioner (Appeals), Chandigarh. By the impugned order, the Commissioner (Appeals) has dismissed the appeals filed by the appellants before it. The said appeals were filed against the order dated 8-9-2008 passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 04/2006-C.E., dated 1-3-2006, submitted that, initially the explanation clause was at the foot of the Notification since there were only 31 entries. Year after year, the new entries were added but, the explanation clause remained appended to the entry relating to Ammonium Chloride and Manganese Sulphate. The wordings of the explanation clause changed in the course of time. However, the term 'fertilizer' is used in more than one entry in the same Notification and there is no justification to restrict the meaning of the term 'fertilizer' given under the said explanation only to the single entry preceding the said explanation. Rather harmonious interpretation would require the explanation to be understood as applicable to all the entries in the Notification wherever the term 'fertilizer' is used. Any other interpretation would defeat the very purpose behind the said explanation. 7. The contention sought to be raised on behalf of the appellants is disputed on behalf of the Department while contending that, the explanation clause is specifically found to be appended to the entry relating to Ammonium Chloride and Manganese Sulphate since the year 1996 under Notification No. 08/96-C.E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to be claimed by the appellants, is found appended to the entry No. 35 which relates to Chapter 28 of the 1st Schedule of the Central Excise Tariff Act, 1985 and the said entry with the explanation clause reads thus : "35. Ammonium chloride and manganese sulphate intended for use - (a) as fertilizers; or (b) in the manufacture of fertilizers, whether directly or through the stage of an intermediate product Explanation - For the purposes of this exemption "fertilizers" shall have the meaning assigned to it under the Fertilizer (Control) Order, 1985." 11. Plain reading of the above entry would disclose that, the explanation clause is not only appended to the said entry relating to Ammonium Chloride and Manganese Sulphate classifiable under Chapter 28 of the Tariff Act, but the explanation clause specifically speaks of its reference to "this exemption". The explanation, therefore, ex facie discloses that, the same relates to the exemption in relation to the product classifiable under Chapter 28 and described against entry No. 35, otherwise there is no reason to use the expression 'this' with reference to exemption in relation to which the explanation has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "the notification", but it was appended to the entry No. 28.7. 14. Perusal of Notification No. 04/1997-C.E., dated 1-3-1997 discloses that, the explanation clause continued to be similar to one which was found in Notification No. 08/2006-C.E. and appended to entry No. 29 which related to Ammonium Chloride and Manganese Sulphate. 15. Perusal of Notification No. 05/1998-C.E. discloses the similar position as in the case of Notification No. 04/1997-C.E. 16. Perusal of Notification No. 05/1999-C.E. dated 28-2-1999 discloses the entry regarding explanation having been placed as appended to entry no. 34 in the table and it stated thus : "Explanation - For the purposes of this exemption, "fertilizers" shall have the meaning assigned to it under the Fertilizer (Control) Order, 1985." This entry is similar to the entry found in the Notification in question. Similar entry continued in Notification Nos. 06/2000-C.E., 03/2001-C.E., 06/2002-C.E. and lastly in the Notification in question. The explanation clause clearly discloses its exclusive applicability to the entry No. 35 in the Notification in question, it is difficult to accept the contention on behalf of the appellants that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in the case of Ranadey Micronutrients v. Collector of Central Excise - Civil Appeal No. 5404 of 1993, decided on 10-9-1996 - 1996 (87) E.L.T. 19 (S.C.). Micronutrients are basically salts of elements such as Zinc, Boron, Manganese, Molybdenum, Iron etc., known as trace elements. These are essential for plant growth in small amounts only and there absence leads to stunted growth. These elements are supplied in minor quantities to regulate the formation of hormones etc., which in turn alter life processes of the plant so as to accelerate growth, enhance yield and improve quality, thus indirectly contributing to regulate plant growth. 4. According to HSN Explanatory Notes, plant growth regulators are applied to alter the life process of the plant so as to accelerate or retard growth, enhance yield, improve quality of facilitate harvesting, etc. Plant hormones are one type of plant growth regulators. Synthetic organic chemicals are also used as plant growth regulators. 5. Fertilizers are materials added to soil and, sometimes to foliage to supply nutrients to sustain plants and promote their abundant and fruitful growth. The elements that constitute these plant foods are divid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise Tariff was introduced, the Chapter Note 6 made it very clear that term x other fertilisers' will only include those which contain at least one of the major nutrients, namely, N, P or K. which condition was not fulfilled in the case of micronutrients. Moreover, in terms of the rules of interpretation specific category has to prevail over a more general heading. Hence, if the term "plant growth regulators' is found to cover micronutrients then that heading being more specific will prevail over the more general heading fertilisers. As seen from the explanatory notes to HSN on which the Central Excise Tariff is based and which can therefore, be relied upon in absence of any contrary indicatory factors; plant growth regulators' are applied to alter the life process of plant so as to enhance yield, improve quality or facilitate harvesting etc. Micronutrients are admittedly used albeit in trace quantities to accelerate the growth and enhance the yield and hence these would be covered by "plant growth regulators." 8. As seen from the Kirk-Othmer Encyclopedia of Chemical Technology - Third Edition "The use of plant growth regulators may be the cause of the most important quantita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used or intended to be used as a fertilizer of the soil and/or crop specified in Part A of Schedule I and includes a mixture of fertilizer, and a special mixture of fertilizers." 23. In the schedule to the said Fertilizer (Control) Order, 1985, the specification of the micronutrients, zinc sulphate, hepta hydrate (ZnSO4.7H2O) have been described as under : (i) [OMITTED] (ii) Matter insoluble in water per cent by weight, Maximum 1.0 (iii) Zinc (as Zn) per cent by weight, minimum 21,0 (iv) Lead (as Pb) per cent by weight, maximum 0.003 (v) Copper (as Cu) per cent by weight, maximum 0.1 (vi) Magnesium (as Mg) per cent by weight, maximum 0.5 (vii) pH not less than 4.0 (viii) Sulphur (asS), per cent by weight, minimum 10.0 (ix) Cadmium (as Cd), per cent by weight, Minimum 0.0025 (x) Arsenic (as As), per cent by weight, minimum 0.21 As already observed above, it is neither the case of the appellants that the product manufactured by the appellants contain any of the essential constituents like ni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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