1986 (11) TMI 213 - AT - Central Excise

Appeal dismissed: Products not classified as insecticides/pesticides, not exempt from excise duty

The Tribunal dismissed the appeal, ruling that the products in question (Ethrel Plant Growth Regulators, Ethrel Latex Stimulant, Fruitone, and ... Demand - Limitation Appeal - Non filing of cross objections Issues Involved:1. Classification of the four products (Ethrel Plant Growth Regulators, Ethrel Latex Stimulant, Fruitone, and Transplantone) as pesticides or insecticides.2. Applicability of Notification No. 55/75 and Notification No. 62/78 for exemption from Central Excise duty.3. Interpretation of statutory terms and definitions.4. Applicability of the law of limitation under Section 11A of the Central Excises and Salt Act, 1944.Issue-wise Detailed Analysis:1. Classification of the Four Products:The appellant argued that their products (Ethrel Plant Growth Regulators, Ethrel Latex Stimulant, Fruitone, and Transplantone) should be classified as pesticides under the Insecticides Act, 1968, and thus be exempt from Central Excise duty. They contended that the products were categorized as pesticides in the Government of India's Insecticides Act, 1968, and referenced various documents, including a letter from the Under Secretary, Government of India, and the Working Group Projection Report, which classified Ethephon as a pesticide.The Assistant Collector, however, did not accept this classification, stating that the products function as plant growth stimulants and are not connected to the destruction of pests, insects, or fungus. The products, according to the Assistant Collector, were meant for healthy plant growth and did not qualify as insecticides or pesticides under Notification No. 55/75 and Notification No. 62/78.2. Applicability of Notification No. 55/75 and Notification No. 62/78:The appellant claimed that their products should be exempt from excise duty under Notification No. 55/75 as amended by Notification No. 62/78, which exempts insecticides, pesticides, weedicides, and fungicides. The Assistant Collector and the Collector (Appeals) both concluded that the products did not qualify for this exemption as they were not insecticides or pesticides.The Tribunal upheld this view, stating that the dictionary meanings of the products indicated they were plant growth regulators and did not function as insecticides or pesticides. The Tribunal referred to a previous judgment (Collector of Central Excise, Bombay v. Bombay Chemicals Pvt. Ltd.) to support this conclusion, emphasizing that the terms in the exemption notification were meant to cover particular formulations specifically for killing insects, etc., and not plant growth regulators.3. Interpretation of Statutory Terms and Definitions:The appellant argued that the term 'pesticides' should be understood in a wider sense, citing various judgments that supported the use of technical or scientific meanings over popular sense in statutory interpretation. They referenced judgments from the Bombay High Court, Delhi High Court, and the Supreme Court to argue that the products should be classified based on their technical definitions under the Insecticides Act, 1968.The respondent, however, cited a Supreme Court judgment (MSCO Pvt. Ltd. v. Union of India) which held that it is hazardous to interpret a word in accordance with its definition in another statute, especially when the statutes are not dealing with cognate subjects. The Tribunal agreed with this view, stating that the products did not qualify as insecticides or pesticides under the Central Excise notifications, regardless of their classification under the Insecticides Act, 1968.4. Applicability of the Law of Limitation:The Collector (Appeals) had given the benefit of the law of limitation to the appellant for the show cause notice dated 23.6.1981, holding the demand of Rs. 1,12,968.74 as time-barred under Section 11A of the Central Excises and Salt Act, 1944. For the show cause notice dated 25.9.1981, the appellant was directed to pay the duty for the period of six months prior to the date of receipt of the notice.The Tribunal did not interfere with the order of the Collector (Appeals) on the point of limitation, as there was no cross objection filed by the respondent.Conclusion:The Tribunal dismissed the appeal, concluding that the four products (Ethrel Plant Growth Regulators, Ethrel Latex Stimulant, Fruitone, and Transplantone) did not qualify as insecticides or pesticides under the Central Excise notifications and were therefore not entitled to exemption from excise duty. The Tribunal upheld the findings of the lower authorities and agreed with the interpretation that the products were plant growth regulators, not insecticides or pesticides.