Fertiliser exemption for sulphuric acid used in zinc sulphate manufacturing survives despite later tariff reclassification.

Sulphuric acid used to manufacture zinc sulphate was treated as eligible for exemption under Notification No. 81/75 because the notification covered sulphuric acid intended for use in the manufacture of fertilizers without limiting the exemption to any particular tariff heading. Zinc sulphate had earlier been regarded as a fertilizer in trade parlance and technical usage, and the later change in tariff classification did not alter the nature of the raw material or the end product. On that reasoning, micronutrient-bearing products such as zinc sulphate remained within the fertiliser concept, so the demand was not sustainable.

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Issues: Whether sulphuric acid used in the manufacture of zinc sulphate was eligible for exemption under Notification No. 81/75 dated 22-3-1975.

Analysis: The notification exempted sulphuric acid intended for use in the manufacture of fertilizers and did not confine the exemption to fertilizers falling under any particular tariff heading. Zinc sulphate had earlier been treated as a fertilizer, and there was no change in the raw material or the final product; only the tariff classification had changed after the coming into force of the Central Excise Tariff Act, 1985. The product was examined in light of the earlier Tribunal view that micronutrient-bearing products, including zinc sulphate, are fertilizers in trade parlance and in technical usage, and the separate treatment of micronutrients in technical literature did not exclude them from the concept of fertilizer.

Conclusion: Yes. Sulphuric acid used in the manufacture of zinc sulphate qualified for exemption under Notification No. 81/75 dated 22-3-1975, and the demand was not sustainable.

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