9911796707
TMI Blog1997 (2) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and Chemicals at their factory situated at Fertilizernagar, District Vadodara. One of the products manufactured by the appellants is Melamine falling under sub-heading No. 2933.90. The raw material used for the manufacture of Melamine is Molten Urea falling under sub-heading No. 3102.00, which is an intermediate product produced in the continuous process of manufacturing Melamine from Ammonia falling under sub-heading No. 2814.00 and Carbon dioxide. The process of manufacture of Melamine employed by the appellants is as under :- (i) The Melamine Plant is based on Chemie-Linz process. In this process, Melted Urea (Molten Urea) from Urea Plant is injected in Urea Compressor over a fluidised bed. The heat required for the decompositio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same is used in the manufacture of Molten Urea which is a fertilizer. 5. The Department has sought to deny the benefit on the ground that this urea is not actually used as fertilizer but for production of Melamine. It is, however, their contention that the benefit of Notification No. 40/85 does not depend on the end use of Molten Urea as fertilizers, as long as such Molten Urea is admitted to be a fertilizer. The appellants had also, in the alternative, claimed the benefit of Notification No. 217/86, dated 2-4-1986. Learned Assistant Collector thereupon passed an order dated 30-10-1992 confirming the demand by applying the ratio of the Hon'ble Tribunal's order qua the appellants reported in 1991 (56) E.L.T. 257. However, the said ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined compound has to be treated as fertilizers falling under Chapter 31. Note 6 of Chapter 31 according to which the term "other fertilizers", in Heading No. 31.05 applies only to products of a kind used as fertilizers. This Note again makes explicit what is implicit, namely, that a product to be classifiable as fertilizers in headings other than Heading No. 31.05 need not necessarily be used as Fertilizers and yet they are to be treated, classifiable and taxed as fertilizers. 7. When the Chapter Notes 1 & 2 of Chapter 31 expressly treat the Molten Urea as fertilizers irrespective of its use, the said product i.e. Molten Urea should also be given the same treatment of classification as fertilizers for the purpose of exemption Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of being utilised as fertilizer and in so far as Ammonia is concerned, it is being used for production of such urea. In any eventuality, the benefit of Notification No. 217/86 cannot be denied as both inputs and outputs accord by the heading mentioned therein and he would press for the same. 12. We have considered the above submissions. We observe that the learned Counsel is correct in pointing out that Chapter Note 1 of Chapter 31 was amended with effect from 1-3-1987. Before 1-3-1987, Chapter Note 1 read as follows :- "Heading Nos. 31.02, 31.03, 31.04 and 31.05 cover mineral or chemical fertilizers, even when they are clearly not to be used as fertilizers." Therefore, it could be argued that before the said date, even if urea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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