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TMI Blog2024 (5) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that 'The only requirement in the present Notification which was also introduced in the previous Notification by way of including Explanation is to explain the meaning of fertilizer. It stands mentioned in the Explanation that fertilizer shall have the meaning assigned to it under Fertilizer (Control) Order, 1985.' In Jyothi Chemicals Fertilisers [ 2023 (8) TMI 1141 - SC ORDER] , the plea raised by appellant that Zinc Sulphate (agricultural grade) is known as fertiliser in common parlance was not considered as the said plea was not raised by appellant therein before earlier forums. Appreciating the ratio of the above decisions as applicable to the facts obtaining in these appeals, the impugned Order cannot sustain and ordered to be set aside - appeal allowed. - HON BLE MS. SULEKHA BEEVI C. S. , MEMBER ( JUDICIAL ) And HON BLE MR. VASA SESHAGIRI RAO , MEMBER ( TECHNICAL ) For the Appellants : Shri S. Gokernesan , Advocate For the Revenue : Shri Anoop Singh , Authorised Representative ORDER Order : - [ Per Mr. VASA SESHAGIRI RAO ] Excise Appeal No. E/41449/2014 has been filed by M/s. ICMC Corporation Limited, Trichy aggrieved by the Order-in-Appeal No. 24/2014 dated 21.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound, falling under Tariff Head 28332990 of CETA and not classifiable under fertilisers which are specifically covered under Chapter 31 of CETA. Therefore, it appeared that the exemption from payment of duty could not be extended to sulphuric acid used in the manufacture of Zinc Sulphate and the duty payable on the Sulphuric Acid procured duty free appeared to be recoverable along with interest under the provisions of Rule 6 of CERGCR read with Section 11A and 11AA of Act ibid. 2.4 A Show Cause Notice No. 02/2012 dated 02.05.2012 was issued to the appellant proposing to deny the exemption availed under Sl.No. 32 of the Notification No. 04/2006-CE and to demand duty of Rs.2,28,211/- on Sulphuric Acid procured during the period from April 2011 to March 2012, under Rule 6 of CERGCR read with Section 11A of Act ibid along with applicable interest under Section 11AA of Act ibid and in this regard enforce the bond executed and to encash the bank guarantee to recover the said duty and interest. 2.5 After due process of law, the Adjudicating Authority vide Order-in-Original No. 07/2013 dated 06.09.2013 confirmed the demands put forth in the Show Cause Notice. Aggrieved, the Appellant filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on various decisions cited by the Appellant should be the basis for extending the benefit of the Notification No. 4/2006-CE dated 01.03.2006. vii. Serial No. 32 and Serial No. 35 of the Notifications are independent and conditions specified in one serial number cannot be applied to another. viii. Had it been the intention of the Government to give exemption only for fertilisers falling under Chapter 31 falling under Chapter 31, then the Government would have mentioned the condition as used in the manufacture of fertilisers falling under Chapter31 . ix. The issue is no more res integra in view of the settled law following various decisions of appellate/ higher forums. a. Punjab Micro Nutrients Ltd. Vs. Commissioner of Central Excise reported in [1990 (48) ELT 603-Tribunal] b. Commissioner of Central Excise, Chandigarh Vs. India Phospate and Carbonite reported in [1998 (98) ELT 634 (Tribunal)] c. Castrol India Limited Vs. Commissioner of Central Excise, Calcutta reported in [2005 (181) ELT 367 (Supreme Court)] x. The reliance placed on the CBEC Circular No. 392/25/98-CX dated 19.05.1988 by the lower authorities have no relevance in the present issue as the Appellant has establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de Zinc Sulphate classifiable under 28332990 of CETA, is eligible for the benefit of exemption Notification No. 04/2006-CE (Sl.No. 32) dated 01.03.2006 when the product manufactured is not classified as fertiliser under Chapter 31 of CETA? 9. The Department had taken a stand that Zinc Sulphate (Agriculture Grade) manufactured by the Appellant, is a separate defined chemical compound, falling under Chapter Heading 28333290 and not classifiable under Chapter 31 as fertiliser, hence the Sulphuric Acid procured duty free is not entitled for exemption under Sl.No. 32 of Notification No. 4/2006. Further, Notification No. 12/2012-CE dated 17.03.2012 which superseded the Notification No. 04/2006, mentioned the same under Sl.No. 86 and hence Sulphuric Acid does not qualify for exemption. 10. The Appellants have contested that Classification of fertiliser under a particular tariff heading 31 is not a pre-condition for eligibility of exemption under serial number 32 of Notification No. 04/2006-CE, hence exemption is available irrespective of the tariff head under which such fertiliser was classified. It was averred that classification of fertiliser is not the moot point as the only condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed The above Notification has exempted Sulphuric Acid falling under Chapter 28 used elsewhere in the factory of production, in the manufacture of fertiliser, by following the procedure laid down under CGEGIR. In the instant case, sulphuric acid is procured duty free by following the procedure laid down under CGEGIR and used by the Appellants in manufacture of Agricultural grade Zinc Sulphate which is distributed to farmers as a fertiliser and prima facie, it appears that the appellants are entitled to the exemption. Whereas the contention of the Department for not extending the benefit of the Notification for manufacture of Zinc Sulphate is that it is classifiable under Chapter 28 instead of as fertiliser under Chapter 31 of Central Excise Act, 1985. 12. Both the Adjudicating Authority and the lower Appellate Authority have confirmed the demand by relying on the decision of the Hon ble Tribunal in the case of Jyoti Chemicals Fertilisers Vs. Commissioner of Central Excise, Chandigarh [2010 (253) E.L.T. 343 (Tri.- Del.)], which reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to foliage to supply nutrients to sustain plants and promote their abundant and fruitful growth. The elements that constitute these plant foods are divided into three classes - (1) Primary-Nitrogen (N), Phsphorous (P) and Potassium (K), (2) Secondary - Calcium (Ca), Magnesium (Mg) and Sulphur (S) and (3) Minor or so called micronutrients - Iron (Fe), Manganese (Mn), copper (cu), Zinc (Zn), Boron (B) and Molybdenum (Mo). However, for the purpose of classification of micronutrients as Other Fertilizers in Heading 31.05 CET, the scope of the term Other Fertilizers has to be determined in the light of Note 6 of Chapter 31. Further, the specific exclusion of separate chemically defined compounds as laid down in the HSN Explanatory Notes to Heading 3105.90, must also be borne in mind. If, the micronutrient is a separate chemically defined compound, it will be classifiable under Chapter 28/29. If not so, and if in accordance with Note 8 to Chapter 31, it contains N, P or K, it will be classifiable under Chapter Heading 31. 6. Further it is also stated that notification under F.C.O. is irrelevant for deciding classification under the Central Excise Tariff and regardless of such notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Chemical Technology - Third Edition The use of plant growth regulators may be the cause of the most important quantitative yields yet achieved in agriculture. The principal aim of the agrochemical industry has been to provide chemicals that control the competition to the crop, i.e. the weeds, insects, fungi and nematodes that reduce yield or quality or that interfere with harvesting. This is only the principal aim and not the only aim of plant growth regulator. As seen further from the heading plant growth substances plant growth substances or regulators are used to modify the crop and further, plant growth regulators other than nutrients usually are organic compounds . Thus nutrients are also covered under the term plant growth regulators. The scope of the term nutrients in the said quotation obviously includes, viz. regulation of competition to the main crop, refers to micronutrients since major nutrients like N, P and K are covered under the scope of the term fertilisers as had been contended by the appellants in support of their claim that micronutrients were also fertilisers. 9. They had claimed that certain nutrients like N, P, K are required by the plant in large quantitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts therein. 24. Lastly, it was sought to be contended on behalf of the appellants that even applying the common parlance theory, the product would be classifiable as the fertilizers . Firstly, this point was never raised either before the adjudicating authority or before the Commissioner (Appeals) and hence the party is not entitled to raise the same for the first time in the appeal before the Tribunal. Secondly, the point has not been raised in the Memorandum of Appeal. The party is not entitled to raise the point at the eleventh hour and that too without any advance notice in that regard to the opposite party. Thirdly, the point is not a pure question of law. It requires factual, matrix which is totally absent in the case in hand. The above decision of the Tribunal has been affirmed by the Hon ble Supreme Court in [(2023) 9 Centax 322 (SC)]. 13. The above decision was rendered on the legal plea raised by the appellant therein as to whether the explanation regarding the term fertilisers appended to entry No. 35 of the said Notification No. 04/2006-CE dated 01.03.2006 is applicable to the term fertilisers appearing in entry No. 28 of the table under the Notification. In the explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulphuric acid used in the manufacture of fertilizer falling under Chapter 31 of the Central Excise Tariff Act, 1985 which means, the exemption is available irrespective of the tariff heading under which the fertilizer may be classified. It is also admitted fact that the appellants had been availing of the exemption prior to 1-3-1986 and also there was no change in the characteristic of either the raw material or the final product. The only change was in the classification of the product due to the coming to the effect of the Central Excise Tariff Act, 1985 from 1-3-1986. In such a situation, what is to be seen is whether zinc sulphate would at all be called a fertilizer. In this context, the Tribunal s decision in the case of M/s. Radhika Vitamalt Pvt. Ltd. v. Collector of Central Excise, Meerut relied upon by the appellants is relevant because in that decision the Tribunal had considered the same material, namely, zinc sulphate and the fact whether it will be a fertilizer or not. It had also considered the aspect of the distinction between nitrogen, phosphorus and potassium, which are to be found in major fertilizers and micronutrients. The Tribunal in that case had observed thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading with reference to the fertilizers. In this view of the matter, we see a lot of force in the contentions of the appellants and accordingly, hold that sulphuric acid used in the manufacture of zinc sulphate is eligible for exemption under Notification 81/75 dated 22-3-1975. The appeal is, therefore, allowed We find that the above decision has been affirmed by the Hon ble Supreme Court as Civil Appeal No. 261 of 1991 filed by the Collector of Central Excise, Chandigarh against the above CEGAT order was dismissed as reported in [1996 (88) ELT A72 (SC)]. 14. We find that the ratio of the above decision has been followed in the case of Himgiri Metal Pvt. Ltd. Vs. Commissioner of Central Excise, Meerut-I [2014 (308) ELT 735 (Tri.-Del.)] as follows:- 2. The appellant/assessees are engaged in the manufacture of zinc sulphate (agricultural grade). For the said purpose they were procuring sulphuric acid without payment of duty in terms of Notification No. 4/2006-C.E., dated 1-3-2006. Serial No. 32 of the said Notification exempts sulphuric acid, along with some other items mentioned and used in the manufacture of fertilizers. The Explanation appears thereunder is to the effect that - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een that neither in the earlier Notification No. 81/75 nor in the present Notification No. 4/2006, there is any requirement of the fertilizer to be classified under Chapter 31 also. The only requirement in the present Notification which was also introduced in the previous Notification by way of including Explanation is to explain the meaning of fertilizer. It stands mentioned in the Explanation that fertilizer shall have the meaning assigned to it under Fertilizer (Control) Order, 1985. Both the decisions referred to by the ld. Advocate have taken note of the fact that zinc sulphate is included in the Fertilizer (Control) Order, 1985. As such, the said condition of Notification also stands fulfilled by the assessee. 7. In view of the above, we, by following the precedent decisions of the Tribunal as upheld by the Hon ble Supreme Court, find no merits in the Revenue s stand. Accordingly, the appeals filed by the assessee are allowed and appeal filed by Revenue is rejected. All the four appeals are disposed of in above manner. 15. In Paragraph 24 of Jyothi Chemicals Fertilisers (supra), the plea raised by appellant that Zinc Sulphate (agricultural grade) is known as fertiliser in com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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