TaxTMI 
TaxTMI 
2021 (10) TMI 50
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....Entry No.182 of Schedule-I of rate of GST on Goods comprising of 'List of Goods at 2.5% Rate' or Chapter 3002-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; toxins, cultures of micro-organisms (excluding yeasts) and similar products- Entry 61 of ScheduleII of rate of GST on Goods, comprising of 'List of Goods at 6% Rate' 3. The appellant had contended that their products were rightly classifiable under chapter 3101 of the Customs Tariff Act, 1975. The Advance Ruling Authority vide order bearing No. GUJ/GAAR/R/23/2020 dated 02.07.2020 ruled that their products are classifiable under Heading No.3002 of the Customs Tariff Act, 1975 based on the findings as mentioned below: (i) From the details submitted by the applicant and comparing the same to the definitions and benefits of biofertilisers described in para-9 of the order, it can be seen that the above products manufactured and supplied by the applicant are biofertilisers. (ii) In para 9 of the order, the definitions and benefits of biofertilise....
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....t and crop residues). Naturally occurring organic fertilizers include animal wastes from meat processing, peat, manure, slurry, and guano. (c) Since the definition of vegetable fertilisers is not available anywhere, hence it would have to be construed in generic terms. In generic terms, vegetable fertilisers would be the fertilizers derived from vegetable matter like compost and crop residues. (iv) As can be seen from the definitions, animal fertilizers and organic fertilizers are similar in definition whereas vegetable fertilizers are those obtained from vegetable matter like compost and crop residues. Further, these fertilizers are mixed directly in the soil and can improve the soil structure(aggregate) so that the soil holds more nutrients and water, and therefore becomes more fertile. However, biofertiliser consists of living microorganisms which, when applied to seeds, plant surfaces or soil, colonize the thizosphere or the interior of the plant and promotes growth by increasing the supply or availability of primary nutrients to the host plant. Besides as per Vikaspedia, biofertilizers are produced by culturing of microorganisms and that such cultured micro o....
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....jasthan. Also, the ingredients in the products are akin to 'animal fertiliser' as the culture of micro organisms are animal in broader sense. In addition, the other ingredients of the products are of the same nature as that of vegetable fertilizers. (iii) The impugned order has not considered the explanatory notes to HSN. The appellant wishes to draw attention of the Hon'ble Appellate Authority that HSN notes clarifies that chapter 3101 inter alia covers compost consisting of rotted waste vegetable and other matter where decay has been accelerated or controlled by treatment with lime, etc. The humic acid which is an ingredient of the product is complex organic acid by decomposition of dead vegetable matter. In common parlance, it can be called as compost. Further mycorrhizza which is an active ingredient contains live animals. Therefore, the Appellant submits that the products in question are classifiable as other fertilisers of heading 3101(Sl.No.182 of Schedule-I to the GST rate schedule). (iv) Further in this connection, the appellant wishes to submit that in an Hon'ble Rajasthan Advance Ruling authority vide its order bearing no. RAJ/AAR/2018-19/04 dated 16.06....
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....nd due to the fact that the appellant is working from home and receipt of the order was intimated very late. The authorized signatory was also working from home which has caused delay in filing the appeal. The appellant has requested that the delay be considered in light of the merits of the case since the delay is not intentional. The appellant has placed reliance on Apex Court's decisions in the case of (i) Collector, Land Acquisition vs. Mst.Katiji [1987] 66 STC 228 (SC) and (ii)West Bengal Infrastructure Dev. Fin. Corpn.Ltd., reported in 2012 (279) ELT 3 (SC) wherein it was held that in case of high stake matters the appeals should not be disposed off on ground of delay and there could be cost imposed and delay condoned in the case of revenue appeals. 6. The appellant concluded their submission with a request that the Appellate Authority be pleased to hold that the products in question being bio fertilizers are classifiable under heading 3101. FINDINGS :- 7. We have considered the submissions made by the appellant in the appeal filed by them, their contentions during the course personal hearing as well as evidences available on record. We have also gone through the Rul....
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....or filing between 20.03.2020 and 30.08.2020 were extended upto 31.08.2020. The appellant has filed the appeal on 10.09.2020 and therefore there is a delay of 10 days. We take into consideration the fact that the Goods and Services Tax is a new tax regime and there may be bona-fide mistake on the part of a registered person. Therefore, the delay in filing of appeal in this case is condoned in exercise of the powers contained in proviso to the sub-section (2) of Section 100 of the Central Goods and Services Tax Act, 2017 (herein after referred to as the 'CGST Act, 2017') and the Gujarat Goods and Services Tax Act, 2017 (herein after referred to as the 'GGST Act, 2017'). 10. On going through the submission given by the appellant, they have contended that the products manufactured by them are rightly classifiable under Heading 3101. However, we find that the appellant has not submitted any supporting documents to support their claim. We therefore proceed to decide the issue of classification of the products of the appellant viz. Rhizomyx and Rhyzomyco based on the evidences available on records. Before deciding the classification of the above products, we need to find out whether th....
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....at the products in question are classifiable as other fertilisers of heading 3101 (Sl.No.182 of Schedule-I to the GST rate schedule). As per Wikipedia, definitions of mycorrhiza and Endomycorrhiza are as under: (a) Mycorrhiza: A mycorrhiza is a mutual symbiotic association between a fungus and a plant. The term mycorrhiza refers to the role of the fungus in the plant's rhizosphere, its root system. Mycorrhizae play important roles in plant nutrition, soil biology and soil chemistry. (b) Humic acid: A group of molecules that bind to, and help plant roots receive, water and nutrients. High humic acid levels can dramatically increase yields. Humic acid deficiency can prevent farmers and gardeners from growing crops with optimum nutrition. Further, brief of the details as per the brochures of Rhizomyco and Rhizomyx, is as under: (a) Rhizomyco: Rhizomyco is uniquely formulated with Novozymes proprietary blend of microbes and growth promoting substances containing eighteen species of endo and ectomycorrhizae in a soluble/injectable form to provide broad spectrum application for increased nutrient update and enhances root systems. It increases nutrient and w....
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.... drenching, fertigation • Apply approximately 15 days after sowing or first application(coinciding with flowering). • 250 grams per hectare. (ii) Application on Transplanted crops(rice, chilly, capsicum, onion, tomato etc.): First application: seeding dip. • 10 grams per litre of water • Dip the seeding in solution for 5 minutes before transplanting. Second application: drenching spray, soil drenching, fertigation • Apply approximately 15 days after sowing or first application. • 250 grams per hectare. (iii) Application on Tree crops(fruit crops, plantation crops etc.) First application: soil drenching or fertigation. • At the time of fertilizer application. • 250 grams per hectare: 0 to 6 year old crop. • 500 grams per hectare>6 year old crop. Second application: soil drenching or fertigation • 40 to 45 days after first application. • 250 grams per hectare: 0 to 6 year old crop. • 500 grams per hectare>6 year old crop. From the above details and comparing the same to the ....
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.... products converted into fertilizers by mixing together or chemical treatment (other than bone superphosphates of heading 31.03). However, these products fall in heading 31.05 when put up in the forms or packages described in the Heading. The heading includes, inter alia: (1) Guano, which is an accumulation of the excreta and remains of sea birds, found in large quantities on certain islands and coasts. It is both nitrogenous and phosphatic, and is usually a yellowish powder with a strong ammoniacal odour. (2) Excreta, dung, soiled fleece waste and manure, unsuitable for use other than as fertilizers. (3) Rotted vegetable producs, unsuitable for use other than as fertilizers. (4) Disintegrated guano. (5) Products resulting from the treatment of leather with sulphuric acid. (6) Compost consisting of rotted waste vegetable and other matter where decay has been accelerated or controlled by treatment with lime, etc. (7) Wool scouring residues. (8) Mixtures of dried blood and bone meal. (9) Stabilised sewage sludge from urban effluent treatment plants. Stabilised sewage sludge is obtained ....
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....Most manure consists of animal feces; other sources include compost and green manure. Manures contribute to the fertility of soil by adding organic matter and nutrients, such as nitrogen, that are utilized by bacteria, fungi and other organisms in the soil. (vii) Organic fertilizers are fertilizers derived from animal matter, animal excreta (manure), human excreta and vegetable matter (e.g. compost and crop residues). Naturally occurring organic fertilizers include animal wastes from meat processing, peat, manure, slurry, and guano. Since the definition of vegetable fertilisers is not available anywhere, hence it would have to be construed in generic terms. In generic terms, vegetable fertilisers would be the fertilizers derived from vegetable matter like compost and crop residues. As per the submission of the appellant, their products are biofertilisers. The definition of biofertilisers is as under: Biofertiliser: A biofertiliser is a substance which contains living microorganisms which, when applied to seeds, plant surfaces, or soil, colonize the rhizosphere or the interior of the plant and promotes growth by increasing the supply or availability of primary nutr....
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....10 - Antisera, other blood fractions and immunological products, whether or not modified or obtained by means of biotechnological processes: --- Antisera; 3002 10 11 ---- For diptheria 3002 10 12 ---- For tetanus 3002 10 13 ---- For rabies 3002 10 14 ---- For snake venom 3002 10 19 ---- Other 3002 10 20 --- Hemoglobin blood globulins and serum globulins --- Other : 3002 10 91 ---- Of human origin 3002 10 99 ---- Other 3002 20 - Vaccines for human medicine : --- Single vaccines : 3002 20 11 ---- For cholera and typhoid. 3002 20 12 ---- For hepatitis. 3002 20 13 ---- For tetanus. 3002 20 14 ---- For polio. 3002 20 15 ---- For tuberculosis. 3002 20 16 ---- For rabies. 3002 20 17 ---- For Japanese encephalitis. 3002 20 18 ---- For whopping cough (pertusis). 3002 20 19 ---- Other --- Mixed vaccines : 3002 20 21 ---- For diphtheria, pertusis and tetanus (DPT). 3002 20 22 ---- For diphtheria and tetanus (DT). 3002 20 23 ---- For measles, mumps and rubella (MMR). 3002 20 24 ---- For typhoid-par....
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....icroorganisms and that such cultured micro organisms packed in some carrier material for easy application in the field are called biofertilisers. Thus, it can be seen that bio-fertilizers are produced by culturing of micro-organisms which is covered by the entry 'cultures of micro-organisms(excluding yeast) which falls under Sub-heading No.30029030. It is also seen that the explanatory notes to HSN for Heading 3002 specifically mentions 'cultures of micro-organisms for technical purposes (e.g., for aiding plant growth)'. Further, the products of the appellant are a culture of microorganisms i.e. ecto mycorrhiza and endomycorrhia. Also, as can be seen from the uses of biofertilisers as mentioned in para-12 above(asper Vikaspedia), it promotes/aids plant growth, directly or indirectly as it fixes atmospheric nitrogen in the soil and root nodules of legume crops and make it available to the plant, scavenges phosphate from soil layers, produces hormones and anti metabolites which promote root growth, decompose organic matter and help in mineralization in soil and when applied to seed or soil, biofertilizers increases the availability of nutrients and improved the yield by 10 to 25% wit....
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.... the aforesaid judgement, states that their products are classifiable under Heading 3101 which contradicts our point of view, we find it prudent to refer to the General Rules for interpretation of the First Schedule to the Customs Tariff Act to sort out the matter. Rule 3 of the General Rules for the interpretation of Customs Tariff reads as under: "3. When by application of Rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified ....