2017 (4) TMI 1128 - AT - Central Excise

Tribunal denies exemption for Dermitol C-024 as insecticide under Central Excise Tariff

Anu Products Ltd. Versus C.C.E. Meerut

The Tribunal upheld the Commissioner Appeals' decision, classifying Dermitol C-024 under sub-heading 3808.10 of the Central Excise Tariff, thus denying ... Classification of manufactured goods - organic bio-fertilizers, Dermitol C-024 - classified under Heading No.3801.10 of Central Excise Tariff, or under Exemption N/N. 50/2003-C.E. dated 10.06.2003? - whether the goods are entitled to benefit of N/N. 50/2003-CE dated 10.06.2003 or not? - Held that: - the item is meant for killing the insecticides/pests. A mere non-mention of the item in the Schedule to the Insecticides Act 1968 will not change the situation and cannot automatically gives the conclusion that because of the non-mentioning of subject item in the said Schedule, the item is not an “insecticide‟ - no doubt that the subject item is an “insecticide‟ covered by the chapter sub-heading 3808.10 of Central Excise Tariff; when it is so the item will be covered by the entry at Sl.No.15 of the Annx.I attached to the N/N. 50/2003 Central Excise. Appellant has failed to prove that the goods are not insecticides but are plant growth regulator (Tariff sub-Heading 3808.20) or are of “other” category of chapter sub-Heading 3808.90 of Central Excise Tariff. The goods namely Dermitol C-024 are covered under Central Excisie Tariff sub-heading 3808.10 and they are not entitled to the benefit of the N/N. 50/2003 Central Excise - appeal dismissed - decided against appellant. Issues:Classification of product Dermitol-C024 and entitlement to benefit of Notification No.50/2003-CE dated 10.06.2003.Analysis:The case involved an appeal against the Commissioner Appeals' order classifying Dermitol C-024 under Heading No.3801.10 of the Central Excise Tariff, denying the benefit of Exemption Notification 50/2003-C.E. The main contention was whether the goods should be classified under sub-heading 3808.10, 3808.20, or 3808.90, determining their eligibility for the mentioned exemption.The Appellant, engaged in manufacturing organic bio-fertilizers and agricultural spray oil Dermitol C-024, argued for classification under sub-heading 3808.20 or 3808.90, claiming exemption under Notification No.50/2003. The Revenue contended that Dermitol C-024 fell under sub-heading 3808.10, which includes insecticides, fungicides, herbicides, weedicides, and pesticides, not covered by the said exemption.The Tribunal analyzed the description of Chapter Heading 3808, highlighting sub-headings 3808.10, 3808.20, and 3808.90. The Appellant's position was that Dermitol C-024 did not fall under 3808.10 but under 3808.20 as a plant growth regulator or under 3808.90 as 'other.' However, the Tribunal found that Dermitol C-024, based on its characteristics and intended use, qualified as an insecticide falling under 3808.10, thus not eligible for the exemption.The Tribunal considered various definitions and sources indicating that insecticides are substances used for killing insects, which aligned with Dermitol C-024's functionality as described in the literature. Despite the Appellant's argument regarding the Insecticides Act's schedule, the Tribunal emphasized that the item's actual properties and usage determined its classification. The lack of evidence provided by the Appellant to support an alternative classification further weakened their case.Ultimately, the Tribunal upheld the Commissioner Appeals' decision, dismissing the appeal due to the Appellant's failure to demonstrate that Dermitol C-024 should be classified differently. The judgment was pronounced on 20.04.2017 by the Tribunal, affirming the classification under sub-heading 3808.10 and denying the benefit of Notification No.50/2003-CE to the goods.