TaxTMI 
TaxTMI 
2011 (2) TMI 600
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....lassification of the product "Vipul Booster" as a Plant Growth Regulator under tariff heading 3808.20 as contended by the appellant as against the department's contention that the product is classifiable as an insecticide under heading 3808.10 of the Central Excise Tariff. The other two appeals, namely appeal No. E/1017 & 1018/08 are the appeals filed by the department against the orders of the Commissioner (Appeals) wherein the Commissioner (Appeals) had allowed the parties appeal following the Tribunal's order dated 6-3-2007, which has now been set aside by the Hon'ble Supreme Court. 2.1 The issue involved in all these five appeals is the same, namely, the classification of the product "Vipul Booster" whether as a "Plant Growth Regulator" under tariff heading 3808.20 as claimed by the appellant M/s. Bahar Agrochem & Feeds Pvt Ltd., (Bahar in short) or as an insecticide under tariff heading 3808.10 as claimed by the department. When the matter was heard by the Tribunal earlier, the issue before the Tribunal was whether the product was classifiable under heading 3808.20 of the Central Excise Tariff as claimed by the appellant manufacturer or classifiable under heading 3808.....
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....ith reference to that ingredient only. All these questions will require fresh consideration in accordance with law by the Tribunal. Accordingly, the impugned judgment is set aside and the matter is remitted to the Tribunal for fresh consideration in accordance with law". 3. The appellant's contentions are that the registration under the Insecticide Act is not determinative of its classification under Central Excise Tariff and the law on this point is well settled as has been held in Sujanil Chemo Industries v. CCE - 2000 (115) E.L.T. 546, which was upheld by the Hon'ble Apex Court in the same case vide judgment dated 10-2-2005 reported in 2005 (181) E.L.T. 206. It is their contention that mere registration of a product as an insecticide under the Insecticide Act, 1968 will not give a classification as an insecticide under the Central Excise Tariff Act. It was further argued that the Central Excise Tariff itself classified various products, which are registered under the Insecticides Act, 1968 not as insecticides under the Excise Tariff but under various other headings. For example, boric acid though classified as insecticide under the Insecticide Act, would be classifiab....
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....C.E., 2006 (196) E.L.T. 3 (iii) Colgate Palmolive v. UOI, 1980 (6) E.L.T. 268 3.4 It is their contention that since the department has not discharged the onus placed on them for change in classification, the classification as claimed by Bahar cannot be disturbed. They further submit that in matters of classification, commercial parlance test has to be followed and cited the following case laws : (i) Naturalle Health Products v. C.C.E., 2003 (158) E.L.T. 257 (ii) Ramavatar Budhaiprasad, AIR 1961 SC 1325 (iii) C.C.E. v. Vicco Laboratories, 2005 (179) E.L.T. 17 (S.C.) (iv) Shree Baidhyanath Ayurved Bhavan Ltd. v. C.C.E., Nagpur - 1996 (83) E.L.T. 492 (S.C.) (v) G.S. Auto International Ltd. v. C.C.E., Chandigarh - 2003 (152) E.L.T. 3 (S.C.) 3.5 The appellant further argues that the findings of the Commissioner that end use of the product is not relevant for classification is incorrect because the tariff heading under consideration "insecticides" and "Plant Growth Regulator" by itself incorporate end use and, therefore, end use is a relevant facto....
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....upreme Court, it has been directed that the effect of issuance of certificate under the Insecticides Act, 1968 and all the procedures and formalities stipulated under the Insecticide Act, 1968 being regularly followed by the assessee are relevant and these issues which were not examined earlier by the Tribunal were required to be examined afresh. The assessee had not challenged the order of the Tribunal before the Hon'ble Apex Court and, therefore, they are bound by the above law laid by the Hon'ble Apex Court. According to the ld. Jt. CDR, the appellant Bahar are prevented from taking a plea that registration of the product under Insecticides Act as an insecticide cannot be relevant for deciding the classification under Central Excise. (2) He further contends that the product "Vipul Booster" has been manufactured by using Triacontanol 0.1% w/w (which is registered as insecticide with Directorate of Plant Protection Quarantine and Storage and having Registration No. CIR-136/2002 (210)-Triacontanol (EW-135). Triacontanol is the active ingredient in Vipul Booster and other raw constituent materials are emulsifiers and preservatives. Therefore, the product has been considered ....
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.... notes and the impugned product satisfied the criteria for classification as an insecticide. Therefore, no extraneous materials/affidavits can be relied upon when the impugned product is marketed as an insecticide only. (6) In view of the above, the ld. Jt. C.D.R. submits that the product has to be classified as an insecticide under sub-heading 3808.10 and not as a Plant Growth Regulator. Since the product is rightly classifiable under 3808.10 its valuation has to be done as per the provisions of Section 4A of Central Excise Act, 1944. (7) The ld. Jt. C.D.R. further relies on the following judgments in support of his contention : (i) Travancore Chemicals - 1997 (89) E.L.T. 136 (ii) Aero Industries - 2006 (204) E.L.T. 61 (Tri.) (iii) Essen Synthetics Pvt. Ltd. - 1987 (32) E.L.T. 759 (Tri.) (8) The ld. Jt. CDR further argues that though the appellant has claimed the classification of their product as a Plant Growth Regulator, the product has been described and marketed as "Plant Growth Promoter" as can be seen clearly fro....
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....he appellant was of the view that their product is not being used as an insecticide or is not capable of being used as an insecticide, they could have sought exemption under Section 38 of the Insecticides Act, which they have failed to do. Therefore, he submits that the product "Vipul Booster" with Triacontanol which is notified as an insecticide as the active ingredient is classifiable as an insecticide under the central excise tariff, and not as a Plant Growth Regulator and, therefore, the said product is liable to excise duty under the provisions of Section 4A of the Act. Accordingly, he submits that the duty demand confirmed by the ld. Commissioner of Central Excise in his order dated 17-6-2005 is correct in law and therefore, needs to be upheld. 5. We have carefully considered the submissions made by both the sides and our findings are discussed below. 6. The direction of the Hon'ble Apex Court is that as the assessee has registered the above mentioned product as an insecticide with Directorate of Plant Protection, Ministry of Agriculture, Faridabad and that they have been regularly following all procedures and formalities stipulated under the Insecticide Act, ....
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....tification. As per the product composition (as seen from the records) Vipul Booster contains the following : 1. Triacontanol 0.1% w/w (min) 2. Emulsifier (ethoxylated esters of fatty acids) 0.5% w/w/ (max) 3. Preservatives 0.1% w/w (max) 4. Demineralised aqua Q.S. 5. Total 100% w/w Thus going by the composition, the active ingredient of the product is Triacontanol, which gives the product its essential character. The other substances such as emulsifiers, preservatives and demineralized aqua contained in the product do not give the product its essential character Triacontanol by itself is an insecticide specified in the Schedule to the Insecticides Act, 1968. That being so, the product which contains the active ingredient will also have the characteristics of Triacontanol. Therefore, the essential nature of product is derived from the nature of the active ingredients, which is Triacontanol, an insecticide and this position is not in dispute at all. 6.3 In the certificate of registration for the said product issued by the Directorate of Plant protection, quarantine and storage. Ministry of Agriculture, Government of India, vide ....
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....enough for a man of ordinary/normal vision to read them without any external help." 6.5 In the approved leaflet, which is available in the records, it is written as follows : Recommendation for use : Triacontanol E.W. 0.1% a Plant Growth Promoter to increase the yield of crops like cotton, chilies, tomato, rice and groundnut. Storage : The package containing the formulated grade insecticide should be stored in original containers in separate room or almirah under lock and key, away from the reach of children, food stuffs, animal feeds and other articles and keep in cool and dry place. The premises for storage should be well built, well lit, sufficient in dimension and well ventilated. Disposal of empty containers : The empty containers should never be reused and should be destroyed and buried in a safe place. Dispose off packages or surplus material and washings in safe manner so as to prevent environmental and water pollution. Precaution : Avoid contact with skin, eyes and mouth. Wash the affected areas before eating, drinking or smoking. Avoid contamination of environment and water. Symptoms of poisoning : Eyes and skin irritation, nausea, headache may occu....
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....e, any preparation wherein Triacontanol is the active ingredient has to necessarily have the characteristic of Triacontanol, which is an insecticide. That is the reason why under the Insecticides Act not only Triacontanol is included but also the preparations containing Triacontanol. Thus the composition of the product matters a lot in determining the classification, especially with respect to the active ingredient in the product. From that perspective it would appear that the product Vipul Booster which contains Triacontanol has to be a insecticidal preparation and not something else. 7.3 In the case of UOI v. Vicco Laboratories, 2007 (218) E.L.T. 647 (S.C.) while considering the classification of Vicco Turmeric cream under the central excise tariff, the Hon'ble apex Court came to the conclusion that the "essential character of medicine and the primary function of the medicine is derived from the active ingredients contained therein and it has certainly a bearing on the determination of the classification under the Act". The same principle was applied by the Hon'ble Apex Court in the case of Amrutanjan Ltd. v. C.C.E. - 1995 (77) E.L.T. 500 (S.C.). Even in the case of Natur....
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....ts. The question which arose for consideration in that case was whether a product by name "Licel", which is used for the purpose of killing lice on the human head/hair should be classified as insecticide falling in heading No. 3808.10 or as a medicine falling under heading No. 3003.10. The Hon'ble Apex Court in that case held that the product has to be classified under heading Nos. 3003 or 3004 as medicaments, in view of the fact that the product has prophylactic and therapeutic properties. The Apex Court also took into the consideration the fact that Chapter note 1(c) of Chapter 38 specifically provided that Chapter 38 would not cover medicaments under heading No. 3003 or 3004 and Chapter 30 defined "medicaments", inter alia, as a product comprising of two or more constituents which have been mixed or compounded together for therapeutic or prophylactic use. Thus, even though, in normal parlance, a product may be considered to be an insecticide, if that product has any therapeutic and prophylactic property, then for purposes of classification that product cannot fall under chapter 38. In the instant case, there are no such issues as far as Triacontanol is concerned. There is no spe....
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....etween a Plant Growth Promoter on the one hand and Plant Growth Regulator on the other. In the case of Northern Minerals Ltd. v. C.C.E., New Delhi - 2001 (131) E.L.T. 355 (Tri.-Del), this Tribunal had occasion to examine the difference between a Plant Growth Promoter and a Plant Growth Regulator. The Tribunal observed in the said case that Plant Growth Regulator is a natural or synthetic compound, other than nutrients, which can inhibit, promote or otherwise alter physiological processes in plants, whereas a plant growth promoter only promotes plant growth and would not inhibit it. Accordingly, they held that a plant growth promoter cannot be considered as a plant growth regulator. The said conclusion was derived by this Tribunal based on the HSN explanatory notes and also based on the technical literature on the subject, namely, Kirk-Othmer "Encyclopedia of Chemical Technology", Plant Physiology by Robert M Devlin & Francis H. Witham and J.C. Johnson's Plant Growth Regulators and Herbicide Antagonists - Recent Advances". Based on the technical literature and the HSN explanatory notes, this Tribunal held that plant growth promoter and plant growth regulator are distinct and differe....
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....ction 38 of the Insecticides Act and they need not have followed any of the procedures prescribed under the said Act or the Rules made there under. However, they have not exercised this option available under the law. This clearly shows that the appellants, by their very conduct, have agreed that their product is an insecticide coming within the purview of the Insecticides Act. If they did not want to market their product as an insecticide at all they should have sought exemption under Section 38 of the said Act rather than following the procedures, such as, registration, labeling, packing, providing statutory warning, etc. applicable to insecticides and preparations thereof in respect of said product. So from this angle also, it is clear that the product under consideration merits classification as an insecticide and not as a plant growth regulator. 7.9 The appellants have also contended that a number of products such as boric acid, copper sulphate, sodium chlorate, gibberellic acid etc. (which are insecticides) are classified not under heading No. 3808.10 but under various other headings in Chapter 28 or 38 of the excise tariff. However, it has to be borne in mind that in....
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....s. The product Triacontanol, which is the active ingredient was brought under the Insecticide Act, 1968 vide gazette notification dated 3-1-1996. Thereafter, the appellants took registration under the said Act and started complying with the procedures specified thereunder. Merely because they did not inform the department of their product registration under the Insecticides Act, 1968, it cannot be held that they have suppressed the facts with an intent to evade payment of duty. So long as the constitution of product was known to the department and the notification of Triacontanol under the purview of the Insecticides Act was made under a Gazette notification, which is a public document, it was the responsibility of the department to take note of the changes in the law and reclassify the product accordingly. As has been held in a number of judicial pronouncements which have been relied upon by the appellant as mentioned in paras 3.6 to 3.8 (supra), mere omission to inform the department of the registration of the product under the Insecticides Act, 1968 can not be held as suppression or willful mis-statement of facts with an intent to evade duty. The department has not adduced any e....