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TMI Blog2017 (7) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... ute on interpretation of classification, there cannot be any imposition of penalty or for that matter confiscation of goods, land & machinery and the orders imposing such penalties or confiscating such goods etc. in the impugned order is set aside - appeal allowed in toto - decided in favor of Appellant. - E/817/2007, E/247/2008 & E/248/2008 - A/31234-31236/2017 - Dated:- 20-7-2017 - Shri M.V. Ravindran, Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri Ch. Venkateswara Rao, Advocate for the Appellant Shri J.V.S. Chakravarthy, Asst. Commissioner/AR for the Respondent ORDER [Order Per: Shri Madhu Mohan Damodhar ] 1. All these appeals since involving the same issue, they are taken up for com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fertilisers in CETH 3105. The operative portion of the said decision is reproduced for ready reference : 8.We find that on the imbroglio with respect to the classification of 'Micronutrients', the CBEC themselves have been changing their stance thereon over the years. In a circular No.79/79/94-CX, dated 21.11.1994, the Board modified earlier circular No. 26/90-CX.3, dated 26.06.1990 (which had advised appropriate classification of Micronutrients under heading No.38.08 as 'Plant Growth Regulator') and clarified that Micronutrients listed under Sr.No. 1 (F) of Schedule 1 part (A) of the Fertiliser (Control) Order, 1985 and their mixture (with or without N, P, K) as notified by the Central Government or a State Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us, proceedings have been initiated by department referring to these circulars and alleging that Nitrogen is present in the impugned goods of the respondents in smaller quantity only, in the form of diamine and the goods will not function as nutrients since Nitrogen present does not function as a nitrogenous fertilizer as nitrogen is not released. Department also took the view that the impugned goods are one or more combination of micronutrients such as compound of zinc, Boron, Manganese etc. which are required in smaller quantities to regulate plant growth to alter life process of the plant so as to accelerate growth yield and improve quality and hence the products are classifiable as plant growth regulators under chapter 38.08 only. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the data on plant growth regulators submitted by the appellant, we find that at least in some parts of the world, they are regulated as pesticides. Discernibly, micronutrients which are admittedly for promoting only growth and health of plant cannot logically find a place in this heading. 8.6 It is interesting to note that CBEC found it necessary to issue yet one more circular No. 1022/10/2016-CX, dated 06.04.2016, on the very issue of classification of micronutrients, plant growth regulators etc. In the first para itself, the circular acknowledges that the issue of classification of these items remain a disputed area in Central Excise. On the basis of opinion obtained from Indian Agricultural Research Institute (IARI), Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment of plants. Micronutrients thus cannot modify inhibit retard the growth of plants like plant growth regulators, they only promote normal growth. 8.8 Applying the above findings, it clearly emerges that the impugned products definitely do contain more than one of the essential nutrients listed in the circular, they have also contain recognisable percentage of nitrogen. This being so, the disputed items are certainly micronutrients. In view of presence of nitrogen, and also considering that they are mixtures and not separate chemically defined compounds, the said goods would therefore come under the ambit of micronutrient fertilisers and will then required to be classified as in other fertilisers in CETH 31.05. 4. We do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority. Needless to say, the said authority will give suitable opportunity to the applicant to present their case during such de-novo proceedings. 5. Appeal No.E/817/2007 (Hindustan Agro Insecticides) is thus allowed in toto, with consequential benefit, if any. With respect to Appeal No.E/247/2008 (Sovereign Agro Products Pvt. Ltd.) in respect of the dispute concerning micronutrients, appeal is similarly allowed, with consequential benefit, if any, and for the dispute concerning Master Neem , the matter is remanded as above directed. Appeal No.E/247/2008 is thus partly allowed and partly remanded. In view of discussions hereinabove, we hold that penalty cannot be imposed on Shri P. Anil Kumar, Managing Director of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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