TaxTMI 
TaxTMI 
2018 (6) TMI 1070
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....entative drew attention to the patent infirmity in the impugned order having restricted itself to three of the products, viz., 'Agromin', 'Chelamin' and 'Chelafir', without rendering a finding on nine other products manufactured by respondent and covered in two of the notices. Taking note of this, we restrict this proceeding to the three covered by the impugned order. As to the fate of the other nine, we shall address that in due course. 3. Noting that the submission on facts, and the chronology of the dispute, made by Mr Hitesh Shah, appearing for Revenue, and Mr V Sridharan, Learned Senior Counsel for respondents, are common ground, we consider it necessary to pause for a perspective of the patchy canvas on which we are called upon to apply the strokes of our brush for we tread on quicksand - a combination of the unwillingness of the executive branch to articulate its intent to tax and the repercussions impacting that most basic human want, food - and are swamped with a plethora of scientific material and judicial decisions of all hues to persuade us of the correctness of the rival claims. 4. Though Learned Senior Counsel may be anguished by our choosing to describe the imp....
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....ord primary to circulars and instructions. Unfortunately, the assertion in these executive clarifications are in anticipation of accountability, qualified and enable lower authorities to rely upon the adjurements to initiate recoveries that are unable to survive the first stage of adjudication. It would appear that the efforts are aimed at classification that obtains higher rate rather than the rate appropriate to fitment within the description in the Schedule. 7. The Schedule is not a doomsday book; it is also not a manifesto for the chemical or fertiliser industry. It is the creation of a global body of experts that has been adopted as a tool to promulgate duty rates for different articles or goods. With the objective being limited to the determining of the tariff applicable to various goods between competing headings, extensive scientific or industrial research is not a requisite for the task. 8. We, therefore, propose to refer to the voluminous literature placed before us only if unavoidable. The submissions of Learned Authorised Representative are that presence of the principal agents - nitrogen, phosphorous and potassium - in various combinations, is the pri....
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....r and minor fertilizers with nitrogen, phosphorous and potassium being the former. The correction of deficiency in, or the enrichment of, any of these is remedied by human intervention. Thus fertilizers are essential for survival of the eco-system and are, deservingly, bestowed with hallowed status in policy formulation all over the world. To the extent that 'micronutrients' are 'fertilizers', denial of that privilege imperils the very sustainability of human life. 12. A scientific and rational tariff bears the distinct advantage of easy formulation of duty structure for insertion against the appropriate heading without exhaustive inventorising. Coupled with exemptions notified under section 5A of Central Excise Act, 1944, the government is thus enabled to implement its tax policy. Manufacturers are also enabled to ascertain the classification that their products would best fit - and extending to goods that are yet to be thought of, or engineered by, human ingenuity. The range, and the limitation thereof, necessitates certain rules for fitment that have evolved by consensus. 13. On examination of the Schedule, we note that 'fertilizers' and 'pharmaceuticals' are favoured enou....
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...., it would appear that classification as 'fertilizer' is merited on clearance of goods specified in the referred notes pertaining to heading 3102, 3103 and 3104 cleared in bulk packing, even if these may find fitment in other chapters. From the remaining sub-notes pertaining to these headings, it is apparent that these are the only compounds where such ambivalence exists owing to specific description elsewhere whereas chapter 31 may contain only a generic description. The individual identification of two compounds in note 5 as classifiable in chapter 31 does not exclude others which answer to the description in heading 3105. Learned Authorized Representative places heavy emphasis on note 6, i.e. 'For the purposes of heading 3105, the term "other fertilisers" applies only to products of a kind used as fertilizers and containing, as an essential constituent, at least one of the fertilising elements nitrogen, phosphorous or potassium.' to contend that the impugned goods are separately defined compounds and, not being 'fertilizer', in the absence of nitrogen, phosphorous or potassium, must not be accorded the privilege due to 'fertilizers.' According to him, this was the very err....
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....ng 3105 of the First Schedule to the Central Excise Tariff Act, 1985; apparently, the wisdom of the regulatory authority in bringing 'micronutrients' under regulatory control was sufficient to consider these as fertilizers for classification. When this latter was sought to be disowned, as having been invalidated by being contrary to law, leading to disapproval by the Hon'ble Supreme Court, in re Ranadey Micronutrients, of the denial of classification as 'fertilizer', the view was again altered in circular no. 392/25/98-CX dated 19th May 1998 to classify 'micronutrients' as 'other fertilizers' in heading 3105 of the First Schedule of the Central Excise Tariff Act, 1985 to conform with note 6 in chapter 31 of the First Schedule. This circular, while not excluding coverage of 'micronutrients' under the broad heading of 'other fertilizers', required the field authorities to ascertain if these were 'separate chemically defined component' and, if not, to be subjected to ascertainment of the presence of the primary elements, before allowing classification as 'other fertilizers.' Even here, the confusion is palpable for the circular requires such goods, as are found to be 'separate chemica....
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....ew, from coverage under this chapter and, if 'micronutrients' are not fertilizers, they are to be classified on merit based on their composition. The decisions of the Tribunal in Rajasthan Synthetic Industries Ltd v. Collector of Central Excise [1989 (42) ELT 24 (Tribunal)] and of the Hon'ble High Court of Bombay in Subash Photographics v. Union of India [1992 (62) ELT 270 (Bom)] leave no room for doubt on this score. The impugned goods will have to be classified under section 28 or 29 if they be separate chemically defined compounds. Consequently, considering the nature of heading 3808 of the First Schedule of the Central Excise Tariff Act, 1985, it would appear that unless intended use of the goods is markedly inherent in commercial nomenclature, classification will have to be restricted to chapter 28 or 29. 18. In re Ranadey Micronutrients, though the dispute pertained to classification as 'other fertilizers' claimed by the manufacturer on the basis of the circular of 1994, the Hon'ble Supreme Court was called upon to adjudge on the propriety of disowning of a circular by the Central Board of Excise & Customs. According to Learned Authorized Representative, the Hon'ble Suprem....
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....kalinity of soil from rendering a 'micronutrient' insoluble and unusable by the plant or overcome imperviousness of foliage that blocks assimilation of the 'micronutrient.' A chelate does not alter the essential character of the 'micronutrient' as a metal nutrient needed by plants. Such chemically modified metals, denominated as coordinating complex compounds, have widespread use in various delivery systems in the pharmaceutical or metallurgical industries but in the agricultural sector when these are designated as chelate. The chemical used for engineering the chelate contains nitrogen; indeed, without that nitrogen it would not be able to provide the barrier necessary for impeding insolubility of the metal. The contention of Learned Authorized Representative that, being chemical compounds, the impugned goods are not classifiable under chapter 31 of First Schedule to Central Excise Tariff Act, 1985 is out of accord with our finding on the scope of exclusion of 'separate chemically defined compounds' supra. 20. 'Micronutrients' manufactured in factories are, in our opinion, 'fertilizers', both by use as reflected in Fertilizer (Control) Order, 1985 and the deficiency that is sou....