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TMI Blog2001 (1) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... s who filed an appeal against the Assistant Commissioner. The said appeals were rejected by the Commissioner (Appeals) as time-barred and thereafter, the Tribunal also rejected the appeals on the issue of time-bar without going into the merits of assessment. 2. Thereafter, in respect of the second lot of 400 M.T. of Potassium Nitrate, which is the subject matter of the present appeals, the appellants filed bills of entry showing classification as determined by the Assistant Commissioner earlier, but paid the duty under protest and thereafter, filed applications claiming refund of duty. The said refund claims filed by the appellants based upon the their own claim of classification of the goods in question under Chapter 31 were rejected by the Assistant Commissioner by holding that the goods were properly classifiable under sub-heading 2834.21. The appeal against the above Order of the Assistant Commissioner did not succeed before the Assistant Commissioner (Appeals). Hence the present appeal. 3. The main question required to be decided in the present appeal is as to whether Potassium Nitrate Grade 13-0-45 Prilled imported by the appellants is classifiable as fertilizers falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Potassium Nitrate Grade 13-0-45 Prilled for use as fertilizer. In the import documents, it is clearly stated that the goods in question are for use as fertilizer. The Belgian Ministry of Agriculture has certified that the use of goods purchased by the appellant is as fertilizer. The process flow and production method of the Chilean company would show that the natural ore Caliche obtained from the mines is processed to get Potassium Nitrate for use as fertilizer containing, inter alia, Nitrogen as Nitrate, Potassium Oxide and Sodium. In this connection, attention is invited to the following documents :- (i) The appellant s enquiry dated October 3, 1994 for Potassium Nitrate Agricultural Grade Fertilizer; (ii) Proforma invoice of the Belgian Supplier for Potassium Nitrate Prilled Grade 13-0-45; (iii) Process flow chart and production method statement of the Chilean Company; (iv) Certificate of the Belgian Ministry of Agriculture in respect of the goods in question of Grade 13-0-45 Prilled; (v) Invoices of the Belgian supplier stating that the goods are for use in the appellant s tea estates as fertilizer; (vi) Certificates of Analysis in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant for use as fertilizer on the face of it is classifiable under sub-heading No. 3105.90 which attracts nil duty. (F) The Authorities below sought to unduly restrict the scope of Heading No. 31.05 by seeking to rely upon the HSN Explanatory Notes. It is submitted that the HSN Explanatory Notes referred to by the Authorities below merely specify three examples and are not exhaustive as to the coverage of other fertilizers . The Authorities below completely misconstrued the said Explanatory Notes. (G) The Commissioner (Appeals) accepted that Potassium Nitrate for use as fertilizer is classifiable under Chapter 31. But he sought to hold that the appellant s goods were not of fertilizer grade since according to him there was no authentic chemical test report. It is submitted that the goods were duly accompanied by certificates of analysis of the foreign supplier. There cannot be any dispute that the goods are as mentioned in the certificates of analysis of the supplier. The same chemical analysis was specified in the Letters of Credit opened by the appellant. If the goods were not as per the Letters of Credit, no payment would have been made by the Bank. The impor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponding specifications of the goods imported by the appellant :- Item Merck Index Requirement Actual specifications of the imported goods KNO 3 99.5% Not specified but less than 99.5%. K 38.67% 37% N 13.86% 13% O 47.47% Not specified Sodium Nil 0.5% Chlorine Nil 0.5% Density 2.11 1.2 Acidity(pH) 7 Not specified but 9 - 11 as per Israeli literature In the said Encyclopaedia, the different uses of Potassium Nitrate are stated which include its use in fire works, pickling meat, manufacturing glass, freezing mixtures, treating tobacco to make it burn evenly, tempering steel, etc. The said Encyclopaedia does not list the use of such Potassium Nitrate as fertilizer. As would be apparent from the above chart, the product imported by the appellant does not conform to the specifications laid down in the said Encyclopaedia. (J) The imported product contains sodium and chlorine which are not specified as constituents of potassium nitrate in the said Encyclopaedia. The presence of sodium as S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to this sub-chapter . The relevant Sub-chapter V covers Heading Nos. 28.26 to 28.42 i.e. it includes Heading No. 28.34 under which the goods in question are sought to be classified by the Revenue. One of the exclusions mentioned in the said sub-chapter notes is salts of Chapter 31. The Fertilizer Dictionary describes Potassium Nitrate as a potassium salt of nitric acid. Submissions have already been made here-in-before to show that the said salt falls under Chapter 31. It is submitted that the goods in question which are a salt of Chapter 31 are specifically excluded from Chapter 28. The HSN Explanatory Notes below Heading No. 31.05 state that the said heading does not include other chemically defined compounds even if they could be used as fertilizer and by way of example Potassium Nitrate falling under Heading No. 28.34 has been mentioned. Potassium Nitrate falling under Heading 28.34 and excluded from Heading No. 31.05 must be a chemically defined compound within the meaning of HSN. As submitted here-in-before, the goods in question do not answer the description of a chemically defined compound within the meaning of HSN. (L) Furthermore, the fact that Potassium Nit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trate has multi-farious uses which have been referred to here-in-before. Potassium Nitrate made for specific use as fertilizer by deliberately adding Sodium Chloride(brine) and deliberately leaving Sodium Nitrate and Chlorine in the manufactured product answers the specification description in Heading No. 3105.90. (N) Further and in any event and without prejudice to the aforesaid, it is submitted that the goods in question have to be classified under sub-heading No. 3105.90 in view of Rule 3(c) of the Rules of Interpretation. Assuming though denying that the goods in question equally merit consideration under sub-heading No. 2834.21 and sub-heading No. 3105.90, the same have to be classified under sub-heading No. 3105.90 which occurs last in numerical order. For the reasons aforesaid and those stated in the petition of appeal, it is respectfully submitted that the same should be allowed with consequential relief to the appellant. 5. Shri A.K. Chattopadhyay, learned JDR for the Revenue has argued that the Order passed by the Assistant Commissioner is a speaking order giving reasons as to why the goods in question should be classified under Heading No. 2834.21. He also plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its that the Honourable Supreme Court in the case of M/s. Dunlop India Ltd. v. Union of India Others supra, has clearly observed that in the case of classification basis of end use is not relevant. When there is no reference to the use or adaptation of the articles, the basis of end use for classification under a Tariff entry is absolutely irrelevant. 5.4. He also submits that use of the item in question, Potassium Nitrate is various. Kind attention of the Hon ble Bench is drawn to the Chemical Dictionary meaning of the Item, Potassium Nitrate (The condensed Chemical Dictionary by Hawley - Page : 851). In the said Dictionary, the use of the Item, Potassium Nitrate is shown as below :- USE : Pyrotechnics; explosives; matches; speciality fertilizers; reagent; to modify burning properties of tobacco; glass manufacture; tempering steel; curing goods; oxidizer in solid rocket propellants. 5.5. He also submits that it is important to mention that even in the EXIM Policy wherein the HSN system of classification is shown to indicate the Policy, there also the Item, Potassium Nitrate has been shown under sub-heading 2834.21 clearly. In view of the foregoing, su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them does not conform to the specification as laid down by the said Encyclopaedia. The appellant s product contains Sodium and Chlorine, which are not the specified constituents of Potassium Nitrate. As per the appellant, Sodium makes the product suitable for specific use as fertilizer which the Potassium Nitrate is otherwise not. The process flow chart in the paper-book shows the addition of Sodium Nitrate and Chlorine. According to the appellant, this is a deliberate addition in order to render the Potassium Nitrate to be used as fertilizer. The Assistant Commissioner has also accepted that the goods in question contains Sodium Nitrate. 6.2. We have also seen the flow chart of manufacture as produced by the appellant indicating the presence of Sodium and Chlorine in the goods in question. The fact whether Sodium and Chlorine are added subsequently or are left in the solution deliberately so as to render the goods fit for use as fertilizer, does not make a difference, but their presence will take it away from the purview of Chapter 28. 6.3. We also note that the appellant s enquiry with their foreign supplier was for Potassium Nitrate Agricultural Grade Fertilizer. The proform ..... X X X X Extracts X X X X X X X X Extracts X X X X
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