TaxTMI 
TaxTMI 
2019 (9) TMI 278
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.... said goods were not fertilizer as claimed by them before Customs Authority but are classifiable under Chapter 29 therefore, were liable to be assessed to duty. The appellant paid the said duty under protest. 2.2 The samples of the goods were taken and send for chemical examination. The chemical examiner, Central Excise Laboratory, Vadodara vide his letters F. No. RCL/AH/C.Ex./10 and No. RCL/AH.C.Ex./11 both dated 16.12.2008 communicated the test result as under: (A) Megaboost FE "The sample is in the form of light brown powder. It is ethylene Diamine Tetra Acetic Acid Di-Sodium-Iron Complex. It is a co-ordination compound. It is having following characteristics: Iron (chelated by EDTA) =11.9% PH (1%) =4.00 Noter-Co-ordination Compound are finds mentioned in Chapter29 Noters 5 (c) (3)". (B) Megaboost ZN "The sample is in the form of light brown powder. It is ethylene Diamine Tetra Acetic Acid Di-Sodium- Zinc Complex. It is a co-ordination compound. It is having following characteristics: % Zinc (chelated by EDTA) =13.6% PH (1%) =4.00 Noter-Co-ordination Compound are finds mentioned in Chapt....
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....ries does not have the facilities for performing the particular test in question. The request for retest in outside laboratories will be conditional upon the party concerned meeting the cost of retest." The DGCRCL, New Delhi vide letter dated 29.12.2010 replied the clarification as under: "In this connection, it is to inform you that each of the two samples under reference was received in a unit packing in a printed Carton. As such each is a Ethylene Diamine Tetra Acetic Acid Disodium (EDTA)-Iron (Fe) and Zinc (Zn) Complex- a co-ordination compound. It is true that each of the two samples contains Nitrogen, but this nitrogen is from EDTA only. Each is free from Mineral or chemical fertilizers-Nitrogenous covered under Chapter31 which is evident from the Iron and Zinc contents in the samples as mentioned under Chapter31. EDTA chelates are not covered under nitrogenous fertilizers. Therefore each merits classification under Chapter29 of Central Excise Tariff. Further, as per Central Excise Circular No. 392/1998, it is also stated that Notification under FCO covering micronutrients is irrelevant for deciding classification under the Central Excise Tariff ....
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....be claimed as primary source of nitrogen, to hold that nitrogen is not an essential constituent so as to classify the goods under Chapter 31. However, we note that the International Institute of Biotechnology and Toxicology (IIBAT) has certified on 19-12-2006 that during the process of supply of potential micronutrients for the plant growth, once the micronutrients are delivered at the plant system EDTA breaks out resulting in elemental nitrogen which further helps to promote the plant growth and that without nitrogen it is not possible to deliver the metal ions or micronutrients to the plant system. This certificate was placed by the appellants before the authorities below. Further reliance placed by the Revenue on the specific exclusion of separate chemically defined compounds from Heading 3105.90 in the HSN Explanatory Notes (the EDTA chelate is separate chemically defined compound) is also misplaced for the reason that HSN Explanatory Notes to Chapter 29 clearly state that separate chemically defined compounds containing other substances deliberately added during or after their manufacture are excluded from Chapter 29 and the product in dispute contains zinc/manganese/iron whic....
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....d 'Chelated'. 5. Ld. AR relies on the impugned order. 6. We have gone through arguments of both the sides. We find that the issue under consideration is if the product sold by the appellant is classifiable under chapter 31 as fertilizer or under chapter 29 specifically defined chemical. It is seen that the decision in case of Ciba India Ltd (Supra) was taken without considering Chapter Note 5 of Central Excise Tariff Act, 1985 which reads as under: \ "(C) Subject to Note 1 to Section VI and Note 2 to Chapter28: (1) Inorganic salts of organic compounds such as acid-, phenol- or enolfunction compounds or organic bases, of sub- Chapters I to X or heading 2942, are to be classified in the heading appropriate to the organic compound; and (2) Salts formed between organic compounds of sub- Chapters I to X or heading 2942 are to be classified in the heading appropriate to the base or to the acid (including phenol- or enol-function compounds) from which they are formed, whichever occurs last in numerical order in the Chapter. (3) Co-ordination compounds, other than products classifiable in sub Chapter XI or heading 2941, are to be classified in the ....
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....Counsel has claimed that the product is mixture of goods whereas the test report describes the product as 'Coordination Compound' and not as a mixture. The literature of foreign supplier as well as the test reports produced by the appellant also describe prodyuct as 'chelated Iron' or Chelated Zinc'. It is seen that the decision in case of Ciba India Ltd (supra) was taken in respect of Ethylene Diamine Tetraacetic Acid (EDTA) which is on chelating agent and also contains Nitrogen, Zinc, Manganese and Iron. In the said case, the reliance has been placed on Note 6 of Chapter 31 of Central Excise Tariff Act, 1985 which reads as under: "6. For the purposes of heading 3105, the term "other fertilizers" applies only to products of a kind used as fertilizers and containing, as an essential constituent, at least one of the fertilizing elements nitrogen, phosphorus or potassium." It fails to notice that the Chapter 31 does not include separate chemically defined compounds. Chapter Note 1 to Chapter 31 reads as under: "1. This Chapter does not cover: (a) Animal blood of heading 0511; (b) Separate chemically defined compounds (other than those answering to the description....