2017 (12) TMI 458 - AT - Customs

Tribunal classifies micronutrients as 'other fertilizers' under CETH 31.05, distinguishing from Plant Growth Regulators.

Commissioner of Customs, Central Excise & Service Tax, Guntur Versus M/s Vikas Agro Products

The Tribunal upheld the classification of micronutrients as 'other fertilizers' under CETH 31.05, rejecting the Department's contention for classification ... Classification of goods - micronutrients - Department has a taken a view that the goods merit classification under CETH 38.08 as Plant Growth Regulator, whereas the respondents claim classification as other fertilizers under CETH 31.05 - Held that: - the issue has already been settled in the case of CCE & ST, Hyderabad-IV Versus M/s Aries Agrovet Industries Ltd [2017 (7) TMI 289 - CESTAT HYDERABAD], where it was held that In view of presence of nitrogen, and also considering that they are mixtures and not separate chemically defined compounds, the said goods would therefore come under the ambit of micronutrient fertilisers and will then required to be classified as in other fertilisers in CETH 31.05. Micronutrients will be classified under CETH 31.05 as other fertilizers - appeal dismissed - decided against Revenue. Issues:Classification of micronutrients under CETH 38.08 as Plant Growth Regulator or under CETH 31.05 as other fertilizers.Analysis:The issue in this appeal revolves around the classification of micronutrients manufactured by the respondent. The Department contends that the goods should be classified under CETH 38.08 as Plant Growth Regulator, while the respondents argue for classification under CETH 31.05 as other fertilizers. Both lower authorities have determined that the items fall under CTH 31.05. The Department, aggrieved by this decision, has approached the forum for resolution.The Tribunal refers to a previous decision in the case of CCE & ST, Hyderabad-IV Vs. Aries Agrovet Industries Ltd., where it was held that micronutrients should be classified as other fertilizers in CETH 3105. The Tribunal cites circulars issued by the CBEC, indicating changes in the classification of micronutrients over the years. The CBEC clarified that micronutrients listed under specific categories are classifiable under Heading No.31.05 as Other Fertilizers. The presence of nitrogen and the nature of the goods as mixtures further support their classification as micronutrient fertilizers under CETH 31.05.The Tribunal delves into the definitions and characteristics of Plant Growth Regulators and micronutrients to differentiate between the two categories. Plant Growth Regulators are identified as organic compounds that affect physiological processes in plants, while micronutrients are essential nutrients required in small quantities for normal plant growth. The CBEC circular dated 06.04.2016 provides clear distinctions between plant growth regulators and micronutrients, emphasizing the role of each in plant development.Based on the findings and analysis, the Tribunal upholds the decision that micronutrients should be classified under CETH 31.05 as 'other fertilizers.' The presence of essential nutrients, including nitrogen, and the nature of the goods as mixtures support this classification. Therefore, the appeal is rejected, maintaining the classification of micronutrients as other fertilizers under CETH 31.05.In conclusion, the Tribunal's detailed analysis and reference to relevant circulars and legal principles establish the proper classification of micronutrients as other fertilizers under CETH 31.05, resolving the classification dispute in this appeal.