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2021 (10) TMI 57
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....Control) Order, 1985; that these products are used as fertilizer to overcome zinc deficiency and iron deficiency respectively, in plants as well as a source of zinc and iron respectively for those plants which require zinc and / or iron for their normal growth and higher yields. The appellant also submitted that it is registered under the Fertilizer (Control) Order, 1985 with the Deputy Director of Agriculture (Extension), District Mehsana, Gujarat. 2. The appellant raised the following questions for advance ruling before the GAAR - (i) Whether the products 'Zn EDTA' (Zinc Ethylenediamine Tetra Acetic Acid) and 'Fe EDTA' (Iron Ethylenediamine Tetra Acetic Acid) being supplied by the applicant are classifiable under Chapter Heading 2833, 2921, 3105 or 3808 or any other Chapter Heading of the Customs Tariff Act, 1962; (ii) Whether the products 'Zn EDTA' (Zinc Ethylenediamine Tetra Acetic Acid) and 'Fe EDTA' (Iron Ethylenediamine Tetra Acetic Acid) being supplied by the applicant are covered under S. No. 182D of Schedule - I, S. No. 56 of Schedule - II, S. No. 40, 45 or 87 of Schedule-III, or any other S. No. of any of the Schedules of Notification No. 1/2017-Central Tax (Rate) d....
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....ely trace elements, it shall be classified under CTH 3824 99 90 as chemical products not elsewhere specified or included. The GAAR has considered the composition of the products and has observed that the appellant had submitted that the Nitrogen is contained in EDTA; that once the impugned products are delivered at the plant system, EDTA breaks out, resulting in release of nitrogen. In view thereof, the GAAR has concluded that the products in question are 'micronutrients' and merit classification under Chapter sub-heading 3824 99 90. As regards the various decisions cited by the appellant, it has been observed by the GAAR that in those decisions, Hon'ble CESTAT dealt with the dispute of the classification of micronutrients in Central Excise regime and hence, ratio of the same cannot be applied in GST regime. Accordingly, the GAAR, vide Advance Ruling No. GUJ/GAAR/R/79/2020 dated 17.09.2020, has ruled as follows - Answer 1 : The products, viz. "Zn EDTA" and "Fe EDTA" manufactured and supplied by the applicant are classifiable under HSN 3824 99 90 of the First Schedule to the Customs Tariff Act, 1975. Answer 2 : The products, `Zn EDTA' and 'Fe EDTA', being supplied by....
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....has referred to the dictionary meaning of the term 'fertilizers' relied upon by the GAAR and has submitted that its products contain zinc and nitrogen / iron and nitrogen; that zinc, iron and nitrogen are used in these products primarily for their plant nutrient content, therefore, the products 'Zn EDTA' and 'Fe EDTA' of the appellant satisfies all the requirements of the definition of 'Fertilizers' relied upon by the GAAR. 4.5 As regards the not following of the decisions of the Hon'ble CESTAT by the GAAR, the appellant has submitted that though the decisions cited by it were in Central Excise regime, the tariff entries, relevant Chapter Notes and Section Notes and the principles to be adopted for classification of the products were same under the Central Excise regime as they are under the Goods and Services Tax regime, therefore the decisions of the Hon'ble CESTAT should not have been disregarded merely on the ground that the same were pertaining to Central Excise regime. It has also been submitted that the Appellate Authority for Advance Ruling in Gujarat as well as in other States and the Authorities for Advance Ruling in different States, including Gujarat, have relied upon ....
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....ol) Order 1985, as amended, promulgated by the Ministry of Agriculture, Government of India; that the Nitrogen is a constituent in EDTA and 'Zn EDTA' / 'Fe EDTA' cannot be manufactured without EDTA, hence Nitrogen is an essential constituent of the products 'Zn EDTA' and 'Fe EDTA'. 5.5 The appellant has submitted that the Chapter Note 6 of Chapter 31 requires that the product, to be covered under 'other fertiliser', should contain Nitrogen as an essential constituent, and not as a predominant constituent, giving essential character to the product. It has further been submitted that in the said Chapter Note, no minimum percentage of Nitrogen to be contained in the product to be classified as 'other fertiliser' has been prescribed; that the only requirement is that the Nitrogen contained in the product should be an essential constituent. The appellant has relied upon the Order-in-Original No. 25/2005 of the Commissioner of Central Excise, Hyderabad-IV, the Orders of the Hon'ble CESTAT reported at 2017 (7) GSTL 317 (Tri.-Hyd.) and Order No. A/86615/2018. The appellant has submitted that its products, thus contain Nitrogen as an essential constituent. It has been submitted that as the....
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....tilisers', and the decisions of the Hon'ble Tribunal have been accepted by the department on merit, the view which has held the field for more than 25 years, should not be unsettled. 5.7 The appellant has submitted that though the Customs Tariff has been followed in the GST, the decision in respect of relevant chapter notes and section notes and classification under Chapter Heading / Sub -heading / Tariff item rendered for Central Excise Tariff are equally applicable as the Customs Tariff and the Central Excise Tariff are similar. The appellant has relied upon the decision of the Hon'ble Tribunal in the case of Jersyindia Ltd. [2001 (131) E.L.T. 434 (Tri. - Del.)] in this regard. 5.8 The appellant has also relied upon the judgements of the Hon'ble Gujarat High Court in the cases of Raymon Glues & Chemicals [2000 (117) E.L.T. 29 (Guj.)] and General Foods Ltd. [2010 (258) E.L.T. A49 (Guj)] and Hon'ble Supreme Court judgement in the case of Ratan Melting & Wire Industries [2008 (231) E.L.T. 22 (S.C.)]. 5.9 The appellant has requested to hold the products 'Zn EDTA' and 'Fe EDTA' classifiable under Chapter Heading 31.05 (Tariff Item 3105 90 90) as 'Other fertilisers' attracting Goods....
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....nd the product 'Fe EDTA' contains Iron 12%+, Nitrogen - 6.5%, EDTA Acid, Salt and it has Ph level 6-6.5. The appellant has submitted that these products are classifiable under Chapter Heading 31.05 (Tariff Item 3105 90 90) as 'other fertilisers', whereas the GAAR has held these products are classifiable under Tariff Item 3824 99 90 of the CTA, 1975. 10.1 Chapter heading 3105 of the CTA, 1975 covers "Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg." 10.2 The appellant has claimed that the products under consideration fall under chapter heading 3105 of the CTA, 1975 as 'other fertilisers'. The appellant has also referred to the dictionary meaning of the term 'fertiliser' as well as the term 'fertiliser' defined in sub-clause (h) of clause (2) of the Fertiliser (control) Order, 1985, as amended. 10.3 It is a settled principle that the dictionary meaning or the definition given in other enactment cannot be adopted when the meaning of the term has been specified in the Chapter Note or Section ....
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.... Chapter Note 6 of Chapter 31 of the CTA, 1975 to term a product as "other fertilizer" classifiable under heading 3105 of the CTA, 1975. 10.5 It has also been observed that the Explanatory Notes of the Harmonized System of Nomenclature (HSN) for Chapter 31 contain following note under the heading "General" - "This Chapter also excludes micronutrient preparations which are applied to seed, to foliage or to soil to assist in seed germination and plant growth. They may contain small amounts of the fertilizing elements nitrogen, phosphorus and potassium, but not as essential constituents (e.g. heading 38.24)" The products 'Zn EDTA' and 'Fe EDTA' are covered under serial no. 1(g) of Part-A Schedule-I of the Fertilizer Control Order, 1985, which is for 'Micronutrients'. As per the Explanatory Note of Chapter 31, even if the micronutrient preparations contain small amounts of fertilizing elements nitrogen, phosphorus and potassium, but not as essential constituents, the said products are excluded from Chapter 31. We have already held that the products 'Zn EDTA' and 'Fe EDTA' do not contain fertilizing elements nitrogen, phosphorus and potassium as an essential constituent. The appella....
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....trients with fertilisers are also manufactured and sold. They shall be classified according to their essential characters and general rules for interpretation of the schedule to the tariff. Where the essential constituent giving character to the mixture is one or more of the three elements namely Nitrogen, Phosphorous or Potassium, the mixture shall be classified under any of the heading of Chapter 31, depending upon its composition. On the other hand, where the essential character of the product is that of mixture of micronutrients/multi-micronutrients having predominately trace elements, it shall be classified under CETH 3824 as chemical products not elsewhere specified or included. [underlining supplied] 11.2 There is no specific heading in the tariff (CTA, 1975) for classification of the 'Micronutrients'. However, as discussed, as per specifications for the products 'Zn-EDTA' and 'Fe-EDTA' given in the Fertilizer Control Order, 1985, minimum 12 percent of Zinc is essential in the product 'Zn-EDTA' and minimum 12 percent of Iron is essential in the product 'Fe-EDTA. Thus, the essential character of the product 'Zn EDTA' is given by Zinc and essential character of the product '....
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....et Industries Ltd. However, the issue in the present case is not limited to the classification of Micronutrients under heading 38.08 or 31.05 only. Therefore the decisions in those cases cannot be applied in the present case. APPLICABLE RATE OF GOODS AND SERVICES TAX 13.1 The appellant has submitted that the products 'Zn EDTA' and 'Fe EDTA' being supplied by it be held classifiable under Chapter Heading 31.05 attracting Goods and Services Tax @ 5% (CGST 2.5% + SGST 2.5%) under Sr. No. 182D of Schedule - I of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017, as amended, and corresponding Notification issued under the GGST Act, 2017. 13.2 In Schedule I (2.5%) of Notification No. 1/20107-Central Tax (Rate), it is mentioned at Sr. No. 182 as follows :- Schedule I - 2.5% Sr.No. Chapter/Heading/ Subheading/ Tariff item Description of Goods 182D 3105 Mineral or chemical fertilisers containing two or three of the fertilising elements nitrogen, phosphorus and potassium; other fertilisers; goods of this Chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg; other than those which are clearly not to be used as fertilizers 13.3 As we hav....