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TMI Blog2024 (12) TMI 1451X X X X Extracts X X X X X X X X Extracts X X X X ..... and the larger bench vide Interim Order No. 25-30/2024 dated 02.09.2024 settled the dispute whereby it was held that the product in question merit classification as fertilizer under Central Excise Tariff Item No. 31010099 and not as plant growth regulator under Central Excise Tariff Item No. 38089340. Therefore, the issue is settled and in view of the said larger bench decision in these appeals itself, the appeals deserves to be set aside. 3. Shri M.G Rayka, Learned Additional Commissioner appearing on behalf of the Revenue fairly concedes that now the issue is settled as per the larger bench decision vide order dated 02.09.2024. 4. Considering the submission made by both sides and perusal of record. We find that since the larger bench of this tribunal has finally decided the question in dispute in these appeals vide Interim Order No.25-30/2024 dated 02.09.2024 , these appeals can be disposed of in accordance with the decision given by the larger bench. The relevant order of the larger bench is reproduced below:- "8. It is for this reason that the Division Bench referred the following issue in P.I. Industries to be decided by a Larger Bench of the Tribunal: "Is it necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tariff. The audit party, however, believed that the product was a "plant growth regulator" falling under Chapter Heading 3808 of the Excise Tariff attracting excise duty. 12. The show cause notice dated 16.09.2009 issued to P.I. Industries, contains the following allegations: "3/- Whereas on going through the said technical documents/papers, it was noticed that the Siapton 10L is defined as a unique product of natural origin having multiple activities as a "plant biostimulant", an anti stress agent, a nutritional equilibrator and enhancer in the improved use of macro and micro elements and as an indirect improver of activity of some enzymatic systems to bring about a tremendous boost in quality and quantity of the product. But none of the said documents/papers (technical literature) indicate that Siapton 10L is fertilizer ***** 4/- Whereas the description given in the said technical documents/papers indicated that Siaption 10L is a plant biostimulant, further a plant biostimulant is a plant growth stimulant. Hence, Siapton 10L appears to be a plant growth regulator which appears to be plant growth regulator which appears covered under chapter heading 3808. 93 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... increases growth and yield. I find that "SIAPTON 10L" being a Biostimulant cannot be a Fertilizer/Plant growth Promoter/Nutrient by virtue of my findings in regards to Biostimulants in foregoing paras 18 and 18.1 and also on account that fertilizers are used in soil, while "SIAPTON 10L" is used through foliar application/drip irrigation. "SIAPTON 10L" has also satisfied the three main characteristics of "Plant Growth Regulator" i.e. it constituents mainly organic fraction; it is used directly i.e. foliar application, and It influences various physiological processes/metabolic processes in plants, which further help in increasing growth and yield of plants. Thus I find that the department has rightly alleged that "SIAPTON 10L" is a "Plant Growth Regulator" which merits classification under chapter heading 3808. 93 of the Central Excise Tariff Act, attracting applicable Central Excise duty. 19. I have also gone through the test report of "SIAPTON 10L" issued by the Chemical Examiner, Central Excise & Customs Laboratory, Vadodara, relevant extract of which is reproduced verbatim below: "Test Report - The sample is in the form of brown coloured viscous liquid, i) N = 12.9% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ethod of Analysis Equipment Used Plant Growth Regulators 1 Indol Acetic Acid Not Detected SOP No. QP/DALPL/098 HPLC 2 Gibberellic Acid Not Detected SOP No. QP/DALPL/098 HPLC 3 1-Naphthyl Acetic Acid(NAA) Not Detected SOP No. QP/DALPL/098 HPLC 4 6-Benzyladenine Not Detected SOP No. QP/DALPL/098 HPLC 5 Hydrogen Cynamide Not Detected SOP No. QP/DALPL/214 LCMS/MS 6 Ethephon Not Detected SOP No. QP/DALPL/214 LCMS/MS 7 Florchlorfenuron Not Detected SOP No. QP/DALPL/214 LCMS/MS 8 Mepiquate Chloride Not Detected SOP No. QP/DALPL/214 LCMS/MS 9 Paclobutrazole Not Detected SOP No. QP/DALPL/214 LCMS/MS 10 Triacontanol Not Detected SOP No. QP/DALPL/214 GCMS/MS 11 Chlormequat Chloride Not Detected SOP No. QP/DALPL/214 LCMS/MS 17. P.I. Industries has also placed on record the opinion dated 08.01.2013 submitted by Dr. R. Uma Shankar of the University of Agricultural Sciences, Department of Crop Physiology, Bangalore confirming that amino acid and peptides can be regarded as bio-stimulants and should be treated as organic nutrients or organic fertilizers and not as classical plant gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plant functions, such as root growth, fruit set and drop, growth and other development processes. SIAPTON 10L does not modify, or control or alter any physiological process; it just provides Nitrogen (in an organic form for an improved up-take and utilization) and does what nitrogen does: improved crop growth and yield. SIAPTON 10L instead of providing the element alone, provides Nitrogen in an organic form (amino acids and peptides) so it provides the building blocks for an improved growth. ***** We conclude that the classification of SIAPTON 10L as PGR is not appropriate, being the classification as "FERTILISER" the most and only appropriate in consideration of the product characteristics. It is, indeed, the classification universally accepted as demonstrated above." (emphasis supplied) ISABION 19. Agro Pack claims that Syngenta India Ltd. [Syngenta] imported Isabion in bulk and cleared it for home consumption under Customs Tariff Heading 3101 and after receiving such bulk quantity from Syngenta, Agro Pack undertook re-packing of the product into retail packs after classifying such goods under ETI 3101 00 99 as fertilizers, which did not attract central ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oter/Nutrient by virtue of my findings in regards to Biostimulants in foregoing paras and also on account that fertilizers are used in soil, while "Isabion" is used also through foliar application. I find that Biostimulant, Plant Biochemical Regulators and Plant Growth Regulators are treated on equal footing and "Isabion" has also satisfied the three main characteristics of "Plant Growth Regulator" i.e. it constituents mainly organic fraction; It is used directly i.e. foliar application, and It influences various physiological processes/metabolic processes in plants. Thus I find that the department has rightly alleged that "Isabion" is a "Plant Growth Regulator" which merits classification under chapter heading 3808 93 of the Central Excise Tariff Act, attracting applicable Central Excise duty." (emphasis supplied) 22. According to Agro Pack, Isabion is an organic plant fertilizer, which is also referred to as a bio-stimulant, and consists of a mixture of amino acids and peptides (hydrolyzed protein). Agro Pack also claims that the product is a water-soluble bio-stimulant that provides nutrition to the plant by way of soil or foliar application. For such application, Isabion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% w/w" 25. During the audit, a sample of Isabion was drawn and forwarded to the Chemical Examiner, Central Excise & Customs Laboratory at Vadodara. As per the said report, Isabion contains nitrogen, potassium and phosphorus. Syngenta also obtained analytical test report on chemical analysis of Isabion and the said report dated 10.07.2018 concludes that Isabion contains 58% free amino acid with nitrogen, phosphorus and potassium content as 11.024%, 00.37% and 0.041%, respectively. 26. Agro Pack has also placed on record the Fertilizer (Organic, Inorganic and Mixed) (Control) Amendment Order, 2021 which introduced "bio-stimulant" under the broad category of "fertilizers". Bio-stimulant have been described as: "(ab) "biostimulant" means a substance or microorganism or a combination of both whose primary function when applied to plants, seeds or rhizosphere is to stimulate physiological processes in plants and to enhance its nutrient uptake, growth, yield, nutrition efficiency, crop quality and tolerance to stress, regardless of its nutrient content, but does not include pesticides or plant growth regulators which are regulated under the Insecticide Act, 1968 (46 of 1968)" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts and plant-growth regulators, disinfectants and similar products. Plant growth regulators are described under ETI 3808 93 40. 31. It is in the light of the aforesaid that the submissions that have been advanced by the learned counsel appearing for P.I. Industries and Agro Pack and the learned authorized representative appearing for the department have to be considered. 32. The Division Bench, while referring the matter to the Larger Bench, noticed that the decision of the Tribunal in Northern Minerals would not help the appellant for the reason that in that case the product was applied to soil while in the appeals that were being heard by the Division Bench the product was directly sprayed on plants/trees. 33. The issue, therefore, that would arise for consideration is whether the mode of usage of the product through soil or foliar application is a determinative test for classifying the goods under ETI 3101 00 99 or ETI 3808 93 43. 34. ETI 3101 00 99 and ETI 3808 93 40, when read with the relevant section and Chapter Notes and the HSN Explanatory Notes, do not provide a distinction based on the mode of usage of such elements. It needs to be noted that water-solub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he produce. Urea is generally suitable for foliar application owing to its high solubility, ease, and quick absorption by the plant tissue. 37. It is an undisputed fact that plants absorb nutrients through their roots or foliage. Generally, in situations where soil conditions are not favorable, it is desirable to make foliar applications of the plant nutrients. 38. It is also important to notice that plant growth regulators are also used for soil and foliar applications. The EU Explanatory Note to ETI 3808 93 90 makes it aptly clear that the plant growth regulators can be applied to the whole plant or parts of the plant or to the soil. 39. Thus, the test based on mode of application would not be a correct test. 40. It now needs to be examined whether the two products, namely, Siapton 10L and Isabion are fertilizers or plant growth regulators. 41. P.I. Industries has stated that the product Siapton 10L has amino acids alone. It has clarified that 54% of the product is pure amino acids and the remaining ingredients are peptides and micronutrients, which are short chain amino acids. Dr. R. Uma Shankar in his opinion dated 08.01.2013 has confirmed that amino acids a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and Farmers Welfare. The definition of "bio-stimulants" contained in the aforesaid Order excludes plant growth regulator, which have been stated to be regulated under the Insecticides Act, 1968. It is true that the aforesaid definition of "bio-stimulants" was included in the Fertilizer Order by Order dated 23.02.2021 of the Ministry, but as the Ministry has clearly expressed that bio-stimulants would exclude plant growth regulators, the definition would certainly provide guidance. 46. Fertilizers and plant growth regulators are both used in agriculture but serve different purposes. Fertilizers are substances added to the soil or plants to provide essential nutrients like nitrogen, phosphorus, and potassium that plants need to grow. They enhance soil fertility and promote plant growth by providing the necessary elements for healthy development. On the other hand, plant growth regulators are chemicals that influence plant growth and development by affecting physiological processes like cell division, elongation, and differentiation. They can regulate plant growth by promoting or inhibiting certain functions such as flowering, fruit setting, and root development. In a nutshell, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment, and response to environmental stimuli. Mode of Action (i) Fertilizers work by supplying nutrients directly to the soil or plants, which are then absorbed by the roots and utilized for various metabolic processes within the plant. (ii) Plant growth regulators function by interacting with plant hormones and signaling pathways, altering gene expression, and ultimately modifying plant growth patterns and responses. Application (i) Fertilizers are applied to ensure a consistent supply of nutrients throughout the growing season. They can be applied before planting, during growth stages, or as a foliar spray. (ii) Plant growth regulators are applied in specific concentrations and at precise timings to elicit desired responses in plants. They are used to manipulate plant growth processes at critical stages of development. Effects (i) Fertilizers enhance overall plant growth, increase crop yield, improve nutrient uptake, and support healthy plant development. (ii) Plant growth regulators can induce specific responses in plants, such as promoting flowering, delaying senescence, improving fruit quality, or enhancing stress tolerance. 50. The two product ..... X X X X Extracts X X X X X X X X Extracts X X X X
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