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TMI Blog2019 (10) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to "GST Act" would means CGST Act / MGST Act. 3. FACTS AND CONTENTION - AS PER THE APPLICANT The goods manufactured and supplied by us cover under Organic Fertilizers and the same have been certified by the INDOCERT, BIOCERT (as institute / authorities) appointed under National programme for organic Production, Department of Commerce, New Delhi. The Products mentioned in enclosed list contain Animal or Seaweed Plant excreta, Nitrogenous, Potasic Fertilizers and Micronutrients which are required for the growth and development of the plant and also used to increases overall yield and quality of plant produce. Therefore, according to us products correctly classify under HSN 3 101 or 3105. Additional submissions: PRODUCTS SUBMITTED FOR CLARRIFICATION REGARDING CLASSIFICATION IS. ORGANIC CERTIFIED PRODUCTS AS PER STANDARDS OF (NPOP) NATIONAL PROGRAMME FOR ORGANIC PRODUCTION. 1. Our product for which seeking clarification is certified Organic Products under the NATIONAL PROGRAMME FOR ORGANIC PRODUCTION (NPOP) GOVERNED UNDER (APEDA-AGRICULTURE AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Per FCO 1985. Definition of Fertiliser as per FCO 1985 - (h) "fertiliser" means any substance used or intended to be used as a fertiliser of the soil and/or crop and specified in Part A of Schedule I and includes a mixture of fertilizer and special mixture of fertilisers provisional fertiliser, customised fertilizer: Bio-fertilizers specified in Schedule III and Organic fertilizers specified in Schedule IV Definition of fertilizer under FCO has a functional definition and a list specific definition; Under FCO, Fertilizer should satisfy two conditions which are joined by the conjunction and' in above definitions. (i) It should be a substance used or intended to be used as a fertilizer of the soil and/or crop (basic functional definition); and (ii) It should be specified in either Part A of Schedule-I or Schedule-III or Schedule-IV. (Out of the fertilizers, which qualify the functional definition, only the fertilizers which are listed in schedule shall be subjected to controls under FCO). Therefore, the products manufactured by us are organic fertilisers by functions and also having fertilizing elements. But as clarified above they won't be governed under FCO as well as Inse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etailed. Plant Growth Regulators are defined as organic compounds other than nutrients that affect the physiological processes of growth and development in plants when applied in low concentration. These are in the nature of plant hormones and classical of them are auxins, cytokinins, gibberellins (all three promoters) and abscisic acid, ethylene (both inhibitors). A list of some of the PGRs industrially produced in India is enclosed with the Circular by reply of IARI reproduce below for ready reference - S.No. Points Comments i) .......... ....................... ii) .......... ....................... iii) What are Plant Growth regulators (PGRs)' What are their functions in the plant? PGRs: Plant growth regulators defined as organic compounds other than nutrients that affect the physiological processes of growth and development in plants when applied in low concentrations. Plant growth regulators are active at low concentrations (1-10 ng / nl) in promoting, inhibiting or modifying growth and development. They are either natural or synthetic compounds that are applied directly to a target plant to alter its life processes or its structure to improve quality, incre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not mixed together or chemically treated; (b) Animal or vegetable products converted into fertilizers by mixing together or chemical treatment. Note: The products covered under Chapter chapter 31 are only intended for enhanced growth and not intended for adverse growth as in case of PGRs. HSN Explanatory Notes The heading further covers anti-sprouting products and plant growth regulators intended to inhibit or modify physiological processes in plants. Plant Growth Regulators are applied to alter the life processes of a plant so as to accelerate, or retard growth, enhance yield, improve quality or facilitate harvesting Note: The products covered under 38 are intended to inhibit or modify physiological changes in plants, i.e., altering or modifying the plant's structure and life processes. PGRs particularly bring hormonal changes in the plants. PGRs effect both accelerated and retarded growth. And all of them are covered in the schedule of Insecticide Act, 1968 as amended time to time. Chapter Note in CTA, 1975 This Chapter covers most products in general uses as natural or artificial fertilizers: Note : Chapter Note to Chapter 31 States that it covers products used as nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rified (testing) N, P, K component in our products from soil. testing and bio-chemistry, laboratory 'National Horticultural Research and Development Foundation'. Taluka Niphad, Dist. Nashik and from Private Labs also. As per Lab Test Report it was confirmed that, Nitrogen and Potash available / found in the product. Copy of Lab Test Report for products Autus, Q-Prax, SJ-Eraser, Shyam Samruddhi, SJ Ninja, Stress Out, Telnar, and VK's Nemo etc. enclosed herewith for your ready reference: (Copy of Test Report enclosed Annexure - F] B) We rely on the judgement of Hon'ble CESTAT-Chandigarh in the case of Safex Chemical India Ltd. Vs. Comm. Of Central Excise Rohtak reported in 2017 (7) G.S.T.L. 234 (Tri. Chan.) = 2017 (9) TMI 140 - CESTAT CHANDIGARH, the Hon'ble CESTAT pronounced that, "Product composed of sulphates, borates, silicates of potassium, ammonium, and iron and containing auxins & cytokinins also in addition to other ingredients, used for replenishment of nutrients of soil, classifiable under sub-heading 3101 00 of Central Excise Tariff as 'vegetable fertilizer' as held under impugned order after detailed analysis, and not under sub-heading 3808 90 ibid as plant growth regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Acid - 04.65% Methionine - 0.40% Phenylalanine - 0.45% Lysine - 0.32% Arginine - 0.25% Glycine - 0.30% Additives - 0.34% Organic Matter - 60.00% Organic Slow Release Soil Manur 3. SJ-NINJA NINJA SJ-Ninja is a micronutrient liquid supplying zinc and copper as a nutrient source to plants. SJ-Ninja is with pure natural properties safe to the crops & human. SJ-Ninja can be included in IPM programme. SJ-Ninja also increases plant immunity. Algal extract 10% Organic copper 0.03% Zinc. 0.9% Stabilizer 10% Aqua Q.S Micronutrient liquid 4. SJ-ERASER SJ-Eraser is a unique micronutrient liquid fomulation: SJ-Eraser gives result in 48 to 72 hours. Plant vigour and strength is developed due to use of SJ-Eraser. SJ-Eraser enhances plant immunity. SJ-Eraser can be included in IPM programme. Algal extract 10% Nitrogen 0.4% Potash 0.2% Stabilizer 10% Aqua Q.S. Micronutrient liquid formulation 5. Q-PRAX Q-Prax is a novel liquid microfertilizer. Q-Prax promotes carbohydrate and protein formation. Q-Prax activates lignin synthesis and photosynthesis of plants. Q-Prax makes plant more tolerant to epidemics. Algal extract - 10% Organic copper - 0.6% Stabilizer - 10% So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d field crops with compatibility to urea like other fertilizers. Organic Nitrogen Source-10.00% Organic Phosphorus source - 01.00% Organic Potash Source -01.50% Organic Sulphur - 12.00% Humic Acid 04.79% Glutamic Acid 04.65% Methionine 0.40% Phenylalanine .45% Lysine 0.32% Arginine 0.25% Glycine 0.30% Additives 0.34% Organic Matter - 60.00% Organic Slow Release Soil Manur 3105 or 3105 90 90 5% or 18% Packages of gross weight not exceeding 10 KGS 3. SJ-NINJA SJ-Ninja is a micronutrient liquid supplying zinc and copper as a nutrient source to plants. SJ-Ninja is with pure natural properties safe to the crops & human. SJ-Ninja can be included in IPM programme. SJ-Ninja also increases plant immunity. Algal extract 10% Organic copper 0.03% Zinc. 0.9% Stabilizer 10% Aqua Q.S. Micronutrient liquid 3101 00 99 Nil or 5% Other than those put-up in unit container or put-up in unit container 4. SJ-ERASER SJ -Eraser is a unique micronutrient liquid fomulation: SJ-Eraser gives result in 48 to 72 hours. Plant vigour and strength is developed due to use of SJ-Eraser. SJ-Eraser enhances plant immunity. SJ-Eraser can be included in IPM programme. Algal extract 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues on which the advance ruling is sought). 1. As per Customs Tariff Acts, 1975; HSN 3101 cover goods of animal or vegetable Fertilizers, whether or not mixed together or chemically treated; Fertilizers produced by the mixing or chemically treatment of animal or vegetable products. 2. The Products mentioned in enclosed list contain Animal or Seaweed Plant extract, Nitrogenous, pottassic Fertilizers & Micronutrients. It not just grows the plant, but also enhances the immunity of plant against several diseases. 3. The goods manufacture and supplied by us cover under Organic Fertilizers and the same has been certified by the INDOCERT, BIOCERT (institute / authorities) appointed under National programme for organic Production, Department of Commerce, New Delhi. 4. Therefore, according to us products correctively classify under HSN 3101 or 3105. M/s. (Alligo Agrovet Pvt Ltd.) formally known as Alligo Horizon Pvt Ltd. Situated at. 1025/A 402/B, 4th Floor, Shanta Madhav Sankul, Trimbak Road, Tidke Colony, Nashik, Maharashtra, 422008 having GSTIN No. 27AAHCA8881H1Z8. We are engaged in manufacturing of Organic Fertilizers. We seek clarification on classification and GST rate applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted with the application. 7. on the basis of above information kindly advice / clarify us classification and GST rate applicable for our manufacturing goods. 04. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- Fact 1:- Dealer M/s. ALLIGO AGROVET PVT LTD, has applied for advance ruling Dealer is seeking clarification on classification and GST rate applicability on the following mentioned(given in table) products which dealer claimed organic fertilizer. Fact 2:- Definition of organic fertilizer, as per order no. 11-3/83- STU, Govt of India ministry agriculture and rural development (Department of Agriculture and co-operation) New Delhi, date. 25th Sep 1985 The fertilizer (Control) Order 1985. Definition:- Fertilizer means any Substance used or intended to be used as a fertilizer of the soil and/or crop and specified in Part A of Schedule I and includes a mixture of fertilizer and special mixture of fertilizers provisional fertilizer, customized fertilizer, Biofertilizers specified in Schedule Il and organic fertilizers specified in Schedule iv. Schedule - IV [see clause 2(h) and q)] Part -A SPECIFICATION OF ORGANIC FE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 Mercury (as Hg) 0.15 Nickel (as Ni) 50.00 Lead (as Pb) 100.00 Zinc (as Zn) 1000.00 PRODUCT NAME USE CONTENT DEALER CLAIMED HSN- GST RATE AND DESCRIPTION REMARK AUTUS Financed photosynthesis leads to dark green Leaves and maximum yield. Increases nitrogen uptake and provides growth stimulation. Helps in chelation and uptake of plant nutrients of soil. Improves rate of absorption of fertilizers Increased lateral and white root development with more nitrogen intake, hence enhanced growth stimulation. Very economical when compared with other brands. Immunity booster. Helps in chelation and uptake of plant nutrients. Less time to harvest. Dose:- 2.0ml/liter with Aqus-s spreader (0.5 ml/liter) Acre:- 0.5-0.7L/acre Marine plant extract, potash 0.2%, copper 0.2%, stabilizer 10% 31059090 3105 - 5% for 1. MINERAL OR CHEMICAL FERTILISERS CONTAINING TWO OR THREE OF HE FERTILISING ELEMENTS, NITROGEN, PHOSPHOROUS AND POTASSIUM, OTHER FERTILISERS, GOODS OF THIS CHAPTER IN TABLETS OR SIMILAR FORMS OR IN PACKAGES OF GROSS WEIGHT NOT EXCEEDING 10 KG 2 18% for 1.MINERAL OR CHEMICAL F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CKING PEST 2. On the basis of definition of organic fertilizer as per order no. 11-3/83-STU, Govt of India ministry Agriculture and rural development (Department of Agriculture and co-operation) New Delhi, date.25th Sep 1985. The fertilizer (Control) Order 1985, this is not a city compost, vermin compost or press mud 3. Use against sucking pest. 4. Dealer has availed exemption under this entry as per Notification No. 12/2012-Central Excise 17.03.2012 under entry no 128, chapter 31 where All goods, other than those which are clearly not to be used as fertilisers despite of using as immunity developer against all types of mites. Packing - 50 Lit drum TELNAR Immunity Towards Xanthomonas Axonopodis Punicae (oily Spot Blight), Xanthomonas Botrytis, X. campestris, Erwinia. Initiates intracellular free redical formation which inhibits bacteria. Absolutely harm- free to crop. Not harmful for honeybees and beneficial insects. Stimulates cytokinine synthesis resulting in excellent plant growth after bacterial attack. Binds to Peptidoglycan on the cell wall altering osmotic pressure resulting in sudden death of target bacteria of spore. Initiates intracellular free redical formation re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot to be used as fertilisers 310590 - OTHER 31059090 - OTHER 1. Dealer has classified this product on his website under head IMMUNITY AGAINST FUNGUS 2. On the basis of definition of organic fertilizer as per order no. 11-3/83-STU, Govt of India ministry agriculture and rural development (Department of Agriculture and co-operation) New Delhi, date. 25th Sep 1985 The fertilizer (Control) Order 1985, this is not a city compost, vermin compost or press mud 3. Use as immunity developer Certified AS IMMUNITY DEVELOPER by broad spectrum IFOAM AUTHORITY 4. Packing 50 lit STRESS OUT Is an excellent supplement to regular fertilizer program enhancing color, sugar content, size, etc. Increases overall yield & quality of plant by increasing nitrite reductase activity and decreases residues of nitrite & nitrite. Helps plant to sustain against adverse stresses by activating enzymes. Increases plant tolerance from biotic & abiotic stress like High salinay high temparature, and herbicide treatment. Certified Organic plant growth promoting supplement, improving metabolism of plant, Immunity booster. Effective in stress conditions due to water temperature, alkalinity, Etc, Significantly increase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action. Enriche soil Nourishment and micro element Concentration Not harmful for beneficial soil bacteria and fungi. Algal extract 10%, Zinc 0.3% Aqua S 0.5%, stabilizer 10% No chance of nematode resistance, Can be used as IPM componenent 31059090 3105 - 5% for 1.MINERAL OR CHEMICAL FERTILISERS CONTAINING TWO OR THREE OF HE FERTILISING ELEMENTS, NITROGEN, PHOSPHOROUS AND POTASSIUM, OTHER FERTILISERS, GOODS OF THIS CHAPTER IN TABLETS OR SIMILAR FORMS OR IN PACKAGES OF GROSS WEIGHT NOT EXCEEDING 10 KG. 2. 18% for 1.MINERAL OR CHEMICAL FERTILISERS CONTAINING TWO OR THREE OF HE FERTILISING ELEMENTS, NITROGEN, PHOSPHOROUS AND POTASSIUM, OTHER FERTILISERS, GOODS OF THIS CHAPTER IN TABLETS OR SIMILAR FORMS OR IN PACKAGES OF GROSS WEIGHT NOT EXCEEDING 10 KG which are clearly not to be used as fertilisers 1. Dealer has classified this product on his website under head IMMUNITY DEVELOPER AGAINST NEMATODES (SUCKING PEST) 2. On the basis of definition of organic fertilizer as per order no. 11-3/83- STU, Govt of India ministry agriculture and rural development (Department of Agriculture and co-operation) New Delhi, date. 25th Sep 1985. The fertilizer (Control) Order 1985, this is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fying agency. It is not mentioned anywhere that it is a organic fertilizer. 2. Salient features mentioned for this product shows that it helps in white root promotion, growth stimulation uptake of plant nutrient. This doesn't seems to have plant growth regulator effect such as synthetic (inorganic PGR) hormones. This product may not feet in the HSN category 3808. 3. Flow chart of manufacturing process also shows that elements potassium and copper are used as input. 4. This shows that the product seems to be organic fertilizer and may fit in that HSN category 3105. Excluding, this entry contain goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg, which are clearly not to be used as fertilizers Shyam Samruddhi- 1. This product is certified as organic product by an accredited certifying agency. It is not mentioned anywhere that it is a organic fertilizer. 2. Salient features mentioned for this product shows that it is a soil conditioner (granular product) and contains the elements such as N,P,K and other elements. This may be the claim that it can be categorised as organic fertilizer. This doesn't seems to contain synthetic (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Graphics also indicates potential pesticidal (fungicidal) effect especially mode of action and effect against many fungi. This shows product may feet in the HSE category 3808 (18%). 3. Flow chart of manufacturing process does not show any fertilizer claim. 4. This shows that the product seems organic pesticide and may fit in that HSN category 3808(18%) rather than 3105. Telnar- 1. This product is certified as organic product by an accredited certifying agency. It is not mentioned anywhere that it is an organic fertilizer. 2. Salient features mentioned for this product shows that this product develop immunity against many bacteria. Further it also claims to have damage to DNA and RNA of bacteria and have destructive action against many bacteria. Graphics also indicates potential pesticidal (bactericidal) effect especially mode of action and effect against many disastrous bacteria. This shows product may feet in the HSN category 38()8(18%). 3. Flow chart of manufacturing process does not show any fertilizer claim. 4. This shows that the product seems to be organic pesticide and may fit in that HSN category 38080 rather than 3105. VK's Nemo- 1. This product is certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... category of 3808 (18%) irrespective of their scope of organic certificate. However earlier opinion by the nodal officer should be taken into consideration before giving final decision. The opinion suggests that all above products can be classified under head 38089400- DISINFECTANTS, 38089340 (PLANT GROWTH REGULATORS) and 38089910 (PESTICIDES NOT ELSEWHERE SPECIFIED OR INCLUDED). 05. HEARING The Preliminary hearing in the matter was held on 24.04.20i9, Sh. Harshad S. Gholap G & S. T Practitioner and Sh. Vivek Kapadnis, Director appeared and requested for admission of application as per details in their application. The Jurisdictional Officer Sh. Vaishali Chaudhari, State Tax Officer (NAS-VAT-C-018) Nasik appeared and submitted written submissions. The application was admitted and called for final hearing on 03.08.2019, Sh. Harshad S. Gholap G & S. T Practitioner and Sh. Vivek Kapadnis appeared made oral and written submissions. The Jurisdictional Officer Sh. Narendra K. Nerkar, State Tax Officer (NAS-VATC-018) Nasik appeared and made written submissions. 06. OBSERVATIONS We have gone through the facts of the case and the submissions made by the Applicant and the Department. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, we refer to meanings assigned to them in the dictionary. Fertiliser: The term "fertilizer" means a material containing one or more of the recognized plant nutrients such as Nitrogen, Phosphorous and Potassium, Calcium, Sulphur, Iron, Magnesium, Zinc etc., which are used primarily for their plant nutrient content. Fertilizers are derived from a wide variety of natural and manufactured materials and are sold in solid, liquid and gaseous form (anhydrous ammonia). These materials are designed for use or claimed to have value in promoting plant growth or increasing plant-available nutrient levels in soils. Organic Fertilizers: The word organic applied to fertilizers usually means that the nutrients contained in the product are derived solely from the remains of a once-living organism. Thus organic fertilizers are derived from animal matter (animal wastes from meat processing, animal excreta (manure) or vegetable matter (e.g. compost and crop residues) which are different from manufactured fertilizers synthesized from various chemicals. In general, organic fertilizers act much like the slow-release fertilizers which release nutrients over an extended period of time whereas synthet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are triggers that decide the timing of tissue differentiation into shoots, roots, branches, leaves. flowers and seeds in their life cycle just as hormones decide the timing of appearance and maturation of various organs in the animal life cycle. Pest and Pesticide: A pest is any living organism, whether animal, plant or fungus, which is invasive or troublesome to plants or animals, human or human concerns, livestock, or human structures. Pesticide the substance that kills the pests. Insecticide: As per Insecticides Act, 1968, the term Insecticides has been defined as substances which are used to kill insects.[1] They include ovicides and larvicides used against insect eggs and larvae, respectively. Keeping in mind the discussion made herein above with respect to organic fertilizers, plant growth regulators, insecticides and pesticides, we shall now move on to discuss each product separately and further to classify them accordingly. Products:AUTUS As per applicant's contention Autus is an organic manure liquid that enhances nitrogen uptake and photosynthesis. Further, the product increases lateral white root population improving rate of absorption of fertilizers helping it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te most common insect pest including sucking pest, mites whitefly and aphides. From the mode of action and the salient feature of the products we find that the product satisfy all the attributes of an insecticide and hence the produce is an insecticides covered by HSN 3808 liable to GST @18%. Products SJ-ERASER : With respect to this product, applicant submit that, the product is a unique micronutrient formulation that gives result in 48 to 78 hours. The product is algal extract with nitrogen potash and is a micronutrient liquid formulation. However, from the product literature we see that, the product act as a contact and systemic larvicide. Further literature state that, the product controls chewing pest larvae, caterpillar, spodoptera, helicoverpa etc. Under similar situation Tribunal in case of Indian Oil Corporation V/s. Commissioner-2002 (145) ELT-305 (Tri-Delhi) =2002 (4) TMI 481 - CEGAT, NEW DELHI held that, Malariya Larvicide Oil (MLO) is classifiable under sub-heading 380810 of CTA and not under sub-heading 271090 as Petroleum products. From the use of the product we have no doubt to conclude that the product is an organic insecticide falls under HSN code 3808. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on application to soil it enhances starch production and root development. However, from the product literature and its content made available to us we find that, the product find application in the form of drenching of soil to arrest the nematodes incidence. The product is also used as one of the component of the integrated pest management (IPM). From the literature and the use of product as stated herein we have no doubt that the product is a nematocides covered under Tariff Heading 3808 liable to GST @18%. Product: STRESSOUT: Applicant submit that the product is an excellent supplement to regular fertilizer programme. It is a fungal extract that contains zinc and used as organic manure liquid. From the product literature made available to us we find that, the product' is promoted as organic plant growth promoting supplement with following silent features. It induces glycolysis and TCA cycle resulting in improvement of plant metabolism, elicit proline, valine, cysteine, tryptophan and glutamic acid biosynthesis. It enhances colour, sugar content and firmness of roots and flowers. It increases plant tolerance from biotic and abiotic tress like high temperature, alkalinity and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e First Schedule. Shri Hidayatullah then submitted that the Assistant Collector was in error in relying upon the irrelevant material like pamphlets published by the Company describing the article as motors. It was contended that the advertisement, publicity material and pamphlets issued by the manufacturer are irrelevant material for deciding the classification of the goods and in support of the submission reference was made to the decision reported in 1985 (20) E.L.T. 70 [Leukoplast (India) Private Ltd. and Others v. Union of India and Others] = 1984 (8) TMI 83 - HIGH COURT OF JUDICATURE AT BOMBAY. We are unable to accede to the submission that the pamphlets issued by the Company is irrelevant material. The classification cannot be based only upon what is stated in the pamphlets but the contents of the pamphlets are certainly one of the relevant circumstance which can be taken into consideration while determining classification." Furthermore, we have also observed that presence of micronutrient in the product manufactured by the applicant will not alter the essential character vis-a-vis classification of the product under HSN. For this proposition of law also we find support in t ..... 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