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TMI Blog2002 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... their concentrated bulk forms are covered by the Heading 38.08 at least for the purposes of the Import/Export Policy. For example, sub-heading 3808.10.11 mentions 'Aldrin' as a form of insecticide. Against that sub-heading, it is provided that it is freely importable/exportable "if registered and not prohibited for import under Insecticides Act, 1968 and formulations thereof". Similarly, 3808.90.10 provides for 'pesticides, not elsewhere specified'. It is treated as a free item under the policy "if registered and not prohibited for import under the insecticides Act, 1968 and formulations thereof." Undeniably insecticides, pesticides etc. in whatever form are covered by the Insecticides Act. The description demonstrates that bulk concentrates and formulations are covered by the sub-heading 'Aldrin'. The use of the same words in the Tariff Heading in the Schedule to the 1985 Act as has been used for the purposes of the Import Trade Control Policy is an additional reason for holding that insecticides, pesticides concentrates in bulk forms are includible within the Tariff Heading. For all these reasons, we are unable to accept the appellants' submission that the amendments to Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icides etc. in retailable forms. The issue, therefore, is - did the 1996 and 1997 amendments to Chapter 38 serve to remove bulk TGP, insecticides etc. from that Chapter and place them in Chapter 28 or 29? 4.In approaching the problem, the first step is to look at the background in which the amendments were effected to the relevant portions of the 1985 Act and its Schedule. There was no relevant amendment to the Act between 1987 and 1996. In 1987, Chapter 28 of the Schedule to the Act related to inorganic chemicals, organic or inorganic compounds of precious metals of rare earth metals of radioactive elements or isotopes. Note 1(a) of that Chapter provided that except where the context otherwise required, the headings of the Chapter applied only to : "Separate chemical elements and separate chemically defined compounds, whether or not containing impurities". Chapter 29 related to organic chemicals and also provided in Note 1(a) thereof that the headings of the Chapter would apply only to: "Separate chemically defined organic compounds, whether or not containing impurities". The Chapter headings, the Notes and the Tariff Headings within Chapter 28 and 29 have not been changed or am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty under the Tariff Heading 38.08? The Collector (Appeals), Central Excise, New Delhi decided the question against the Revenue. The matter was taken by the Department before the Central Excise and Gold (Appellate) Tribunal (CEGAT). By its decision in Collector of Central Excise v. Markfed Agro Chemicals, the Tribunal held that the process described did not amount to 'manufacture' of a new excisable item within the meaning of Section 2(f) of what was then the Central Excise and Salt Act, 1944 (which is now known as the Central Excise Act, 1944 and is hereinafter referred to as the '1944 Act') as the process did not result in a new product having a distinctive name, character and use. Thus the Revenue's attempt to rope in insecticides and pesticides in a retail form as a separate excisable item under Chapter 38.08 was thwarted. 7.Despite the decision of the Tribunal in Markfed Agro Chemicals, the CBEC issued a circular on 27th July 1995 in exercise of powers under Section 37B of the 1944 Act and ordered that : "The addition of chemicals and other ingredients like inert carriers or solvents and also surface active dispersing and stabilising agents to pesticidal chemicals i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter of interpretation is manifest from Section 2(f)(ii) which defines 'manufacture' to mean : "which is specified in relation to any goods in the section or Chapter notes of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as amounting to manufacture." 11.Then again the Schedule to the 1985 Act before providing for rates of duty leviable thereunder sets out Rules for the interpretation of the Schedule. Rule 1 states: "The titles of sections and chapters are provided for case of reference only: for legal purposes, classification shall be determined according to the terms of the headings and any relative section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the provisions hereinafter contained." 12.As far as Tariff Heading 38.08 was concerned after the phrase insecticides, rodenticides etc. the phrase : "put up in forms or packings for retail sale or as preparations or articles (for example, sulphur-treated bands, wicks and candles, and fly papers)", was added by the amendment. In other words, the Tariff Heading covers - (1) Insecticides, pesticides etc. put up in forms or packing for retail sale; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erical order among those which equally merit consideration." 16.Paraphrased and simply put, the quoted extracts of the rules direct that the goods would include its formulations and that the more specific heading should be preferred and if there are two such specific headings to which a product can be referred, the one occurring subsequently would prevail. 17.Chapter 28 and Chapter 29 are, as already noted, general provisions relating inter alia to separate chemical compounds. Chapter 38 is the specific chapter dealing with particular chemical compounds viz., insecticides, pesticides etc. In keeping with the Rules quoted, the TGP manufactured by the respondent are classifiable under the particular subsequent provision and not under the residuary headings occurring earlier. 18.This is also how the appellants understood the effect of the 1996 amendment. Trade Notice No. 40/96 dated 23-7-96 enclosed Notes explaining important changes made in excisable duty by the Finance Bill, 1996. Paragraph 19.1. and 19.3. of the Explanatory Notes make the position of the appellants abundantly clear: 19.1. Concessional rate of excise duty of 10% on insecticides, fungicides etc. (sub-head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar products, put up as described in Heading No. 38.08; 2 In relation to products of heading No. 38.08, addition of chemicals and other ingredients like inert carriers or solvents, surface active dispersing and stabilising agents, emulsifiers, wetting and dispersing agents, deodorant, masking agent, attractants and feeding stimulants to pesticidal chemicals in concentrated form, labelling or relabelling of containers intended for consumers and repacking from bulk pack to retail packs or the adoption or any other treatment to render the product marketable to the consumer shall amount to manufacture". Tariff Heading 38.08 now reads as : "Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulphur-treated bands, wicks and candles, and fly-papers)" 23.What is notable is that the 1997 amendment did not change Chapter Note (2) which has been construed by us earlier as including TGP etc. All it did was to extend the exception to the general classification under Chapters 28 and 29 to treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t sub-heading, it is provided that it is freely importable/exportable "if registered and not prohibited for import under Insecticides Act, 1968 and formulations thereof". Similarly, 3808.90.10 provides for 'pesticides, not elsewhere specified'. It is treated as a free item under the policy "if registered and not prohibited for import under the insecticides Act, 1968 and formulations thereof." Undeniably insecticides, pesticides etc. in whatever form are covered by the Insecticides Act. The description demonstrates that bulk concentrates and formulations are covered by the sub-heading 'Aldrin'. The use of the same words in the Tariff Heading in the Schedule to the 1985 Act as has been used for the purposes of the Import Trade Control Policy is an additional reason for holding that insecticides, pesticides concentrates in bulk forms are includible within the Tariff Heading. (See Dunlop India Ltd. v. Union of India and Others 1976 (2) SCC 241.) 26.For all these reasons, we are unable to accept the appellants' submission that the amendments to Chapter 38 in 1996 and 1997 served to exclude TGP or insecticides etc. in bulk forms from Chapter 38. 27.We, accordingly dismiss the appeal ..... 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