TaxTMI 
TaxTMI 
2019 (8) TMI 1251
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....tory premises on 19.11.2011 and recovered certain documents. Samples were drawn of micro nutrients and sent for chemical examination. Show cause notice was issued on the allegation that micronutrient which are classified by the assessee under 3105 of Central Excise Tariff Act (CETA), 1985 was actually Plant Growth Regulators and would fall under Chapter heading 3808 9340 attracting higher rate of duty. Further, it was alleged that bio-pesticides/bio-fertilizers of microbial origin has to be classified under 3105 and not under 3002. Similarly bio-pesticides / bio-fertilizers of plant / animal origin were proposed to be classified under 3105 / 3808 of CETA, 1985. 2.1 After due process of law, the original authority ordered classification of the Multi Micro Nutrient Mixtures under Tariff heading 3808 9340 as Plant Growth Regulators and also confirmed the demand of excise duty along with interest and imposed penalties.With regard to the Single Micro Nutrient Fertilizers manufactured and cleared by the assessee the demand was dropped. With regard to the Bio-fertilizers / bio-pesticides of Microbial origin manufactured and cleared by the assessees, the adjudicating authority held that....
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.... CETH 3101 August 2009 to March 2013 9,59,107 4,81,995 They are not chemically defined compounds but fertilizers 1,09,07,358 3.1 With regard to the first issue in the above table as to the classification of Multi Micro Nutrient Fertilizers it is submitted by ld. counselthat the assessee cleared these products classifying them under CETA 3105 while the department alleges that these are Plant Growth Regulators and would fall under 3808. The main ground for alleging that these products are Plant Growth Regulators is that Multi Micro Nutrient Fertilizers do not contain either of the fertilizing elements N or P or K. The classification under CETA 3808 was proposed by the department without explaining how the Micro Nutrient Fertilizers fall under category of chemically defined compounds. No reasoning has been given so as to reject the classification adopted by the assessee under CETA 3105. The assessee manufactures micro nutrient fertilizers on the basis of licenses issued by Ministry of Agriculture, as per the standards prescribed under Fertilisation (Control) Order, 1985. These products are recogniz....
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....shed products were taken and sent for analysis. On such analysis, it was seen that the percentage of Nitrogen/Potassium/Phosphorus in the micronutrients was either nil or negligible. The assessees have been clearing the Micronutrients manufactured by them as 'other fertilizers'. The products cannot fall under the category of 'fertilizers' as they do not have sufficient amount of N/P/K in them. The product has to be classifiedon the basis of active ingredient which gives the essential characteristics to the product. It is admitted by Shri Dr. K.R.K. Reddy, the Managing Director that the products are basically designed to provide micronutrients only. This would establish that the products do not have N/P/K in order to classify them as 'fertilizers'. In the instant case, the products manufactured by the assesseeare chemically defined compounds packed in unit packing for retail sale and are classifiable under Chapter 3808 only. Further, in terms of note 9 of Chapter 38 in relation to heading 3808, addition of chemicals and other ingredients like inert carriers or solvents, surface active dispersing and stabilising agents, emulsifiers or any other treatment to render the product marketa....
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....3808 9340 specifically covers Plant Growth Regulators. The scope of the term 'Plant Growth Regulators' is elicited in HSN Explanatory note which is as under: "Plant Growth Regulators are applied to alter the life process of a plant so as to accelerate or retard growth, enhance yield, improve quality or facilitate harvesting, etc. Plant hormones (Phytohormones) are one type of plant growth regulator (eg. Gibberellic acid), Synthetic organic chemicals are also used as plant growth regulators." Learned AR has stressed upon the chemical examination report to argue that the Micronutrients/products manufactured by the assessees does not contain N/P/K and therefore will not fall under category of 'other fertilizers'. The issue as to the classification of Micronutrients has been clarified by the Board vide Circular No. 1022/10/2016-CX dated 06.04.2016. It is explained in the circular that Plant Growth Regulators are different from nutrients (Micronutrients). The Tribunal in the case of ShivashakthiBio Technologies Ltd (supra) had occasion to analyze the very same issue and observed that Micronutrients are properly classifiable under Chapter heading 3105 of CETA 1985 and not und....
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....this case is of interpretation of the chapter notes for classification, we find that there is no necessity to visit the appellant with any penalties. The penalties are set aside." 6.1 Similar view was taken by the Tribunal in the case of Aries Agrovet Industries Ltd (supra). Following the above decisions which are on identical set of facts, we are of the view that the Micronutrients (single/multi) have to be classified under 3105 only. The demand raised by the department classifying them as Plant Growth Regulators under 3808 cannot sustain and requires to be set aside. The demand, interest and penalties imposed classifying the multi micronutrient under heading 3808 is set aside. 6.2 The Commissioner has dropped the proposal of classification as well s duty demand in respect of single micronutrients as per the Board Circular dated 19.5.1998. The decision in the case of multi-micro nutrients would apply to single micronutrients also. The Board has clarified by later circular dated 6.4.2016. For these reasons, we do not find any impropriety in the decision of the Commissioner in rejecting the proposal to classify single micronutrients under 3808 and also dropping the demand in t....
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....; Human blood; animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; vaccines, toxins, cultures of micro-organisms (excluding yeasts) and similar products 3002 10 - Antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes : .................................................. 3002 90 - Other : 3002 90 10 --- Human blood 3002 90 20 --- Animal blood prepared for therapeutic, prophylactic or diagnostic uses 3002 90 30 --- Cultures of micro-organisms (excluding yeast) HSN Explanatory notes to Chapter 3002 clarifies that the heading includes 'cultures of micro-organisms for technical purposes (eg. for aiding plant growth). 'Whether the microbes aided plant growth was a biological question, the Commissioner (Appeals) had left to the original authority when he had passed the Order-in-Appeal No. 40/05 dated 28-2-05. This is answered in the affirmative by the original authority. We note....