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TMI Blog2018 (9) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority inter alia holding that the goods are classifiable only as "Plant Growth Regulators‟ under CETA 38089340, confirming the differential duty of Rs. 14,95,381/-, along with interest thereon and imposition of equal penalty under section 11AC of Central Excise Act, 1944. In appeal, Commissioner (Appeals) vide impugned order dated 26.12.2014 upheld the orders of the original authority. Hence the appellants before this Tribunal. 2. Today, when the matter came up for hearing, on behalf of the appellant, ld. counsel Ms. L. Maithili made oral and written submissions, which can be broadly summarized as under:- 2.1 The issue involved in the present case, i.e. the classification of micronutrient mixtures is no longer res integra and stands covered by a number of binding precedents and Board Circulars. The Tribunal in the case of Hindustan Agro Insecticides - 2017-TIOL-3145-CESTAT-HYD, after taking into account the competing Tariff Entries, Chapter Headings, HSN notes, various Board circulars and Apex Court ruling in the Ranadey Micronutrients case, has held that micronutrient mixtures (like those manufactured by the Appellant) are classifiable under Chapter Sub-heading 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch admittedly, the subject goods are not. Micronutrients manufactured by the Appellant by using chelating agents are mixtures and not chemically defined compounds. 2.6 Even otherwise the demand is substantially time barred, the extended period of limitation not being invocable when the issue involved is purely one of interpretation in a contentious classification dispute, which has been the subject matter of repeated clarifications by the CBEC and a number of judicial pronouncements. When the department itself had accepted in March, 2011 that the subject goods were used as fertilizers and had demanded 1% duty on that basis, there was no scope for invoking the extended period of limitation, that too after a lapse of two years thereof. 3. On the other hand, ld. AR Sh. B. Balamurugan supported the impugned order. He drew our attention to para 7 of the impugned order wherein the Commissioner (Appeals) after thorough analysis of CBEC Circular, HS Notes, Central Excise Tariff and Explanatory Notes of Chapter 38 of the HSN has concluded that the products are capable of altering the life processes of a plant and in enhance yield and accordingly they are correctly classifiable as "Plant G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ld. Advocate is correct in her assertion that there being no minimum prescribed percentage of Nitrogen etc. prescribed in Note 6 to Chapter 6 of the Central Excise Tariff Act, the requirements of that Note being classified as micronutrient in other fertilizers, CETA 31.05 are satisfied. We also, note that the Board‟s circular dated 6.4.2016 also does not specify any minimum percentages for such elements to be considered as "essential constituents". Evidently, the essentiality of these elements is then to be decided by the "essential manner" that they act upon the soil or the "essential role‟ of these elements in the fertilizing action per se. However, there is nothing forthcoming on record nor any evidence brought forth by the department to indicate that the Nitrogen present in the impugned goods though in admittedly small percentages are NOT an "essential constituent‟ of the impugned goods. This being so, we are afraid that there is no other reason why the impugned goods cannot be classified under CETA 31.05 as clarified in the CBEC Circular dated 6.4.2016. 5.2 In arriving at this conclusion, we find resonance in a recent decision of the Tribunal, in C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Heading 31. 8.3 In the cases before 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. We find that the same arguments have been put forth by the department in the grounds of appeal. 8.4 For better understanding of various contending classifications, the CETA Heading Nos. 38.08 and 3105 are reproduced below: CETH 38.08 "Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant growth regulators, disinfectants and similar products put up in form or packings for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the fertiliser. Board has also clearly differentiated plant growth regulators as "organic compound other than nutrients which affect the physiological process of growth and development in plants." Board has further clarified, in para 6 therein, that its past circulars on the subject, viz; dated 21-11-1994 and 19-5-1998 are rescinded and that classification of micronutrients, etc., shall be governed by the present circulars. 8.7 As per the aforesaid C.B.E. & C. Circular dated 6-4-2016, plant growth regulators are defined as organic compounds other than nutrients that affect the physiological processes in plants, by hormonal action in promoting inhibiting or modifying growth and development. On the other hand, micronutrients, as explained in the very same circular, are essential nutrients, like iron, Manganese, Zinc, Copper, Boron etc., that are required in small quantities for the normal growth and development 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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