Fertiliser classification upheld for mono potassium phosphate; reclassification to Chapter 28 rejected as inapplicable on the facts.

Mono potassium phosphate, fertiliser grade, was held classifiable under CTH 31056000 because Chapter 31 covers goods answering the fertiliser description by their intended agricultural use. The Revenue's attempt to reclassify the import under CTH 28352400 failed because the product was not shown to be a separate chemically defined compound outside the fertiliser entry, and the relied-upon customs circular was found inapplicable on the facts. The Tribunal followed coordinate-Bench reasoning that mixtures or compounds falling within Chapter 31 remain classifiable as fertilisers, and rejected reclassification based only on general chemical composition.

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Issues: Whether mono potassium phosphate, fertiliser grade, was correctly classifiable under CTH 31056000 as declared by the importer or under CTH 28352400 as reclassified by the Revenue.

Analysis: The dispute turned on tariff classification of the imported goods. The Revenue relied mainly on Circular No. 44/2001-Customs dated 06.08.2001 and sought reclassification on the premise that the goods were a separate chemically defined compound falling within Chapter 28. The Tribunal noted that in an almost identical factual setting, a coordinate Bench had already examined the scope of the same circular and held that it applied to calcium nitrate as a single product and not to mixtures or compounds falling within Chapter 31. The Tribunal further relied on the reasoning that Chapter 31 covers fertilisers by their intended agricultural use and that mixtures or compounds answering the relevant tariff description remain classifiable as fertilisers, while only separate chemically defined compounds not intended for fertiliser use would fall in Chapter 28. As the Revenue could not distinguish the coordinate Bench ruling on facts or in law, the attempted reclassification was found unsustainable.

Conclusion: The declared classification under CTH 31056000 was upheld and the Revenue's reclassification under CTH 28352400 was rejected in favour of the assessee.

Final Conclusion: The impugned classification order did not survive, and the assessee obtained consequential relief by setting aside the demand based on reclassification.

Ratio Decidendi: Where imported fertiliser-grade goods answer the description of Chapter 31 and are not shown to be a separate chemically defined compound outside the fertiliser entry, they are to be classified as fertilisers and not shifted to Chapter 28 merely on the basis of the general chemical composition or an inapplicable circular.

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