1999 (7) TMI 242 - AT - Central Excise

Tribunal decision on classification of pesticides and 'manufacture' criteria. Circulars invalidated, appeals granted.

The Tribunal set aside orders related to the dutiability and classification of formulations and technical grade pesticides. It held that adding chemicals ... Manufacture Issues:1. Classification of formulations out of concentrate pesticides and/or manufacture of technical grade pesticides.2. Dispute regarding the classification of technical grade pesticides under Chapter 28, 29, or 3808.10.Issue 1: Classification of formulations out of concentrate pesticides and/or manufacture of technical grade pesticidesAnalysis:The appeals under consideration dealt with the dutiability and classification of formulations from concentrate pesticides and technical grade pesticides. The issue revolved around whether adding chemicals and ingredients to pesticidal chemicals amounts to 'manufacture.' The Counsel argued that a previous Tribunal decision in the Markfed case held that dilution of pesticides does not constitute manufacture. Show cause notices were issued based on a Circular by CBEC, which was later invalidated by the High Courts in the cases of Indichem and Kissan Chemicals. The Circular was found to be in contradiction with the Markfed decision, which had finality as no appeal was filed against it. Consequently, the orders based on the Circular were set aside for the period before the introduction of Note 2 to Chapter 38 on 23-7-1996.Issue 2: Dispute regarding the classification of technical grade pesticidesAnalysis:For the appeals after 23-7-1996, the classification of technical grade pesticides was in question. The Consultants argued that the law was settled in the Voltas case, where it was held that such pesticides fall under sub-heading 3808.10. This decision was supported by a previous Delhi High Court ruling. The Consultants contended that the packing type was irrelevant to the classification. The Revenue challenged the Delhi High Court decision, but as no stay was granted by the Supreme Court, the decision was applicable. The Tribunal found merit in the Consultants' submissions and set aside the orders, following the Voltas case and the Delhi High Court judgment, thereby allowing the appeals with consequential relief.In conclusion, the judgment addressed the issues related to the dutiability and classification of formulations and technical grade pesticides, providing detailed analysis based on legal precedents and statutory provisions. The Tribunal's decision was guided by established legal principles and previous court judgments, ensuring a thorough examination of the matters at hand.