TaxTMI 
TaxTMI 
2001 (1) TMI 585
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....n was not accepted by the appellants who filed an appeal against the Assistant Commissioner. The said appeals were rejected by the Commissioner (Appeals) as time-barred and thereafter, the Tribunal also rejected the appeals on the issue of time-bar without going into the merits of assessment. 2. Thereafter, in respect of the second lot of 400 M.T. of Potassium Nitrate, which is the subject matter of the present appeals, the appellants filed bills of entry showing classification as determined by the Assistant Commissioner earlier, but paid the duty under protest and thereafter, filed applications claiming refund of duty. The said refund claims filed by the appellants based upon the their own claim of classification of the goods in question under Chapter 31 were rejected by the Assistant Commissioner by holding that the goods were properly classifiable under sub-heading 2834.21. The appeal against the above Order of the Assistant Commissioner did not succeed before the Assistant Commissioner (Appeals). Hence the present appeal. 3. The main question required to be decided in the present appeal is as to whether Potassium Nitrate Grade 13-0-45 Prilled imported by the app....
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....h in the trade and used as such throughout the world. (C) In fact, the appellant had negotiated with the Belgian supplier for purchase of Potassium Nitrate Grade 13-0-45 Prilled for use as fertilizer. In the import documents, it is clearly stated that the goods in question are for use as fertilizer. The Belgian Ministry of Agriculture has certified that the use of goods purchased by the appellant is as fertilizer. The process flow and production method of the Chilean company would show that the natural ore "Caliche" obtained from the mines is processed to get Potassium Nitrate for use as fertilizer containing, inter alia, Nitrogen as Nitrate, Potassium Oxide and Sodium. In this connection, attention is invited to the following documents :- (i) The appellant's enquiry dated October 3, 1994 for Potassium Nitrate Agricultural Grade Fertilizer; (ii) Proforma invoice of the Belgian Supplier for Potassium Nitrate Prilled Grade 13-0-45; (iii) Process flow chart and production method statement of the Chilean Company; (iv) Certificate of the Belgian Ministry of Agriculture in respect of ....
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....tilizer. (E) It is submitted that in the present case there is no dispute that the goods in question contained as essential constituents, two of the fertilising elements namely, Nitrogen and Potassium. In the circumstances, the Potassium Nitrate imported by the appellant for use as fertilizer on the face of it is classifiable under sub-heading No. 3105.90 which attracts 'nil' duty. (F) The Authorities below sought to unduly restrict the scope of Heading No. 31.05 by seeking to rely upon the HSN Explanatory Notes. It is submitted that the HSN Explanatory Notes referred to by the Authorities below merely specify three examples and are not exhaustive as to the coverage of "other fertilizers". The Authorities below completely misconstrued the said Explanatory Notes. (G) The Commissioner (Appeals) accepted that Potassium Nitrate for use as fertilizer is classifiable under Chapter 31. But he sought to hold that the appellant's goods were not of fertilizer grade since according to him there was no authentic chemical test report. It is submitted that the goods were duly accompanied by certificates of analysis of the....
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....ty. (I) In the Merck Index, an Encyclopaedia of Chemicals, Drugs and Biologicals (11th Edition) published by Merck & Co. Inc. USA, the constituents and features of pure Potassium Nitrate have been stated. The appellant sets out here-in-below the requirements of pure Potassium Nitrate according to the said Encyclopaedia and the corresponding specifications of the goods imported by the appellant :- Item Merck Index Requirement Actual specifications of the imported goods KNO3 99.5% Not specified but less than 99.5%. K 38.67% 37% N 13.86% 13% O 47.47% Not specified Sodium Nil 0.5% Chlorine Nil 0.5% Density 2.11 1.2 Acidity(pH) 7 Not specified but 9 - 11 as per Israeli literature In the said Encyclopaedia, the different uses of Potassium Nitrate are stated which include its use in fire works, pickling meat, manufacturing glass, freezing mixtures, treating tobacco to make it burn evenly, tempering steel, etc. The said Encyclopaedia does not list the use of such Potassium Nitrate as fertilizer. As would be apparent from the above chart, the product imported by the appellant....
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....arate chemically defined compound and as such are outside the purview of Chapter 28 by virtue of Chapter Note : 1 thereof. It is necessary to mention here that HSN Explanatory Notes under Heading 28.34 stated that the said heading covers nitrates "subject to the exclusions mentioned in the introduction to this sub-chapter". The relevant Sub-chapter "V" covers Heading Nos. 28.26 to 28.42 i.e. it includes Heading No. 28.34 under which the goods in question are sought to be classified by the Revenue. One of the exclusions mentioned in the said sub-chapter notes is salts of Chapter 31. The Fertilizer Dictionary describes Potassium Nitrate as a potassium salt of nitric acid. Submissions have already been made here-in-before to show that the said salt falls under Chapter 31. It is submitted that the goods in question which are a salt of Chapter 31 are specifically excluded from Chapter 28. The HSN Explanatory Notes below Heading No. 31.05 state that the said heading does not include other "chemically defined compounds" even if they could be used as fertilizer and by way of example Potassium Nitrate falling under Heading No. 28.34 has been mentioned. Potassium Nitrate falling under Headin....
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....that the position is just the other way round. Heading No. 28.34 is the general heading for Potassium Nitrate and Heading No. 31.05 is the specific heading for Potassium Nitrate fertilizer and is to be preferred over Heading No. 28.34 in accordance with Rule 3(a) of the Rules of Interpretation. It is further submitted that Potassium Nitrate has multi-farious uses which have been referred to here-in-before. Potassium Nitrate made for specific use as fertilizer by deliberately adding Sodium Chloride(brine) and deliberately leaving Sodium Nitrate and Chlorine in the manufactured product answers the specification description in Heading No. 3105.90. (N) Further and in any event and without prejudice to the aforesaid, it is submitted that the goods in question have to be classified under sub-heading No. 3105.90 in view of Rule 3(c) of the Rules of Interpretation. Assuming though denying that the goods in question equally merit consideration under sub-heading No. 2834.21 and sub-heading No. 3105.90, the same have to be classified under sub-heading No. 3105.90 which occurs last in numerical order. For the reasons aforesaid and those stated in the petition of appeal,....
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....ation. In the case of M/s. Lalitha Imports & Exports, Madras v. Collector of Customs, Madras, the Hon'ble CEGAT, Special Bench, New Delhi reported in 1987 (30) E.L.T. 955 (T) has clearly observed the classification as classification to be in terms of heading and heading providing specific description to be preferred to heading of general description. 5.3. He also submits that the Honourable Supreme Court in the case of M/s. Dunlop India Ltd. v. Union of India & Others supra, has clearly observed that in the case of classification basis of end use is not relevant. When there is no reference to the use or adaptation of the articles, the basis of end use for classification under a Tariff entry is absolutely irrelevant. 5.4. He also submits that use of the item in question, Potassium Nitrate is various. Kind attention of the Hon'ble Bench is drawn to the Chemical Dictionary meaning of the Item, Potassium Nitrate (The condensed Chemical Dictionary by Hawley - Page : 851). In the said Dictionary, the use of the Item, Potassium Nitrate is shown as below :- "USE : Pyrotechnics; explosives; matches; speciality fertilizers; reagent; to modify burning properties of tobac....
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....ng process (including purification) and by-products. The appellant has, in their submission, referred to the constituents and features of Pure Potassium Nitrate, as reflected in the Merck Index, an Encyclopaedia of Chemicals, Drugs and Biologicals. A comparative reading of the Merck Index replacement and specification of the appellant's goods, shows that the product imported by them does not conform to the specification as laid down by the said Encyclopaedia. The appellant's product contains Sodium and Chlorine, which are not the specified constituents of Potassium Nitrate. As per the appellant, Sodium makes the product suitable for specific use as fertilizer which the Potassium Nitrate is otherwise not. The process flow chart in the paper-book shows the addition of Sodium Nitrate and Chlorine. According to the appellant, this is a deliberate addition in order to render the Potassium Nitrate to be used as fertilizer. The Assistant Commissioner has also accepted that the goods in question contains Sodium Nitrate. 6.2. We have also seen the flow chart of manufacture as produced by the appellant indicating the presence of Sodium and Chlorine in the goods in question. The fact ....