Fertilizer exemption for basic slag upheld where evidence showed phosphatic fertilizer use despite soil conditioner description.

Basic slag classifiable under Chapter 31 qualified for fertilizer exemption because the evidence showed it was used as a phosphatic fertilizer in crop production. The Revenue's characterisation of the product as a soil conditioner did not defeat the exemption, since the notification covered products used as fertilizer and the record supported that use. The exemption under Notification No. 181/86-C.E., as amended, was therefore available, and the Revenue's challenge failed.

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Issues: Whether basic slag manufactured by the assessee was used as fertilizer and thus qualified for exemption under Notification No. 181/86-C.E. dated 1-3-1986 as amended.

Analysis: The product was undisputedly classifiable under Chapter 31, and the exemption depended on whether it was used as fertilizer. The Revenue treated the product as a soil conditioner, while the assessee relied on technical literature and agricultural publication material showing that basic slag or soil conditioner was used as a phosphatic fertilizer and for crop production. On the evidence placed on record, the product was found to be used as an important phosphatic fertilizer and not excluded from the scope of the notification.

Conclusion: The product was held entitled to the exemption under Notification No. 181/86-C.E. as amended, and the Revenue's appeal was rejected.

Final Conclusion: The exemption claim succeeded because the product was accepted as a fertilizer use commodity within the notification.

Ratio Decidendi: Where a product falling under the relevant tariff chapter is shown on evidence to be used as fertilizer, the exemption available to fertilizers cannot be denied merely because it is also described as a soil conditioner.

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