Fertilizer exemption turns on schedule inclusion under the control order, not tariff classification, for duty-free sulphuric acid use.

Goods such as zinc sulphate, ferrous sulphate, magnesium sulphate and micro nutrients were treated as fertilizers for exemption purposes because they were specified in Part A of Schedule I to the Fertilizer (Control) Order, 1985. The controlling order supplied the relevant definition, so inclusion in that schedule satisfied the fertilizer condition under the exemption notifications. Reference to Chapter 31 of the Central Excise Tariff Act, 1985 did not limit the exemption where the fertilizer control regime governed the classification for input duty relief. As a result, sulphuric acid used in manufacturing those goods could be procured without payment of duty.

---

---

Issues: Whether Zinc Sulphate, Ferrous Sulphate, Magnesium Sulphate and Micro Nutrients manufactured by the assessee were fertilizers within the meaning of the Fertilizer (Control) Order, 1985, so as to qualify for exemption from duty on Sulphuric Acid used in their manufacture.

Analysis: The exemption notifications permitted duty-free procurement of Sulphuric Acid when used in the manufacture of fertilizer. The governing definition of fertilizer under the Fertilizer (Control) Order, 1985 covered substances used or intended to be used as fertilizer and specified in Part A of Schedule I. The goods manufactured by the assessee were found to be included in Part A of Schedule I as micro nutrients. Once the goods were so specified, they answered the definition of fertilizer under the controlling order. The reference to Chapter 31 of the Central Excise Tariff Act, 1985 did not restrict the exemption where the controlling fertilizer order itself supplied the relevant definition.

Conclusion: The goods manufactured by the assessee were fertilizers for the purpose of the exemption notifications, and the assessee was entitled to procure Sulphuric Acid without payment of duty.

Ratio Decidendi: Where an exemption notification for inputs used in the manufacture of fertilizer operates with reference to the statutory fertilizer control regime, goods specifically included in the relevant schedule to that control order satisfy the fertilizer condition for exemption, even if they are not classified as fertilizer under the tariff heading relied on by the Revenue.

---