TaxTMI 
TaxTMI 
2012 (9) TMI 602
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....ff Act, 1985 with nil rate of duty and declared it as a fertiliser in powder form. Samples of the product were drawn and referred to CRCL (Central Revenue Control Laboratory) who opined that the product is correctly classifiable under CETH 38241990 and on an appeal filed by the appellants, the sample was referred to Chief Chemist who also gave the same opinion. Proceedings were initiated which has culminated in the impugned order holding that the product manufactured by the appellants is classifiable under CETH 38241990 and differential duty of Rs.2,10,42,534/- with interest is payable. Further penalty under Section 11AC has been imposed on the appellant and a penalty of Rs.10,00,000/- has been imposed on Shri Deepak B. Shah, Managing Direc....
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....he appellant s claim is that the process does not amount to manufacture at all, question of classification does not arise and therefore the classification of the product on the basis of chemical examiner s report cannot be sustained. 4. The ld. A.R. on behalf of Revenue submits that according to chapter note 1 to chapter note 2503 if any other material is added to form mixtures with sulphur, the product would go out of chapter 25. She also submits that the process undertaken by the appellants results in manufacture since the process enables sulphur to act as a fertiliser by preventing it from flying away and enabling it to get absorbed by the plants. 5. We have considered the submissions made by both the sides. ....
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....lphur since sulphur of all kinds are covered by the tariff heading. The fact that the note begins with the words Except where their context or Note 4 to this Chapter otherwise requires would support the view that sulphur of all kinds are covered by this heading. Further, the Hon ble Supreme Court had considered this issue in the case of Deepak Agro Solution Ltd. 2008 (227) ELT 52 (S.C.). The relevant paragraphs are reproduced below: 17. Chapter Note 1 of Chapter 25 starts with the words except where their context or Note 4 to this Chapter otherwise requires . It is, therefore, difficult to hold that the headings of the Chapter would cover only the products which are in the crude state or comes within the purview of other activities co....
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....t fillers such as bentonite clay. Such mixture is applied to the plants. On application of water bentonite expands and disintegrates the sulphur particles surrounding it. Over the years 10% bentonite in the mixture has been established as appropriate. 9.The addition of bentonite clay does not alter the? chemical properties of the sulphur particles. Therefore even in admixture of the bentonite the sulphur does not merit classification under any other tariff entry. The sulphur component of such mixture also continues to fall under the term unrefined sulphur . Therefore such unrefined sulphur tracing its origin in refinery processing natural gas, etc. of which it is a by-product would continue to merit the title unrefined sulphur with or wi....