TaxTMI 
TaxTMI 
2023 (7) TMI 810
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.... a 'plant growth regulator'. Various show cause notices were issued, which are presently pending before various authorities. 4. The applicant further states that they are manufacturing and supplying the product Rapigro by classifying it under 3507. It is further stated that according to them, the product merits classification under CTH 31010099 5. The applicant has given detailed reasoning to substantiate their belief that Rapigro merits classification under 31010099, viz • that they have applied & have been granted registration for the product as a bio stimulant under clause 20C(5)(b) of the Fertilizer (Inorganic. Organic or mixed) Control Order 1985 [for short -FCO]; that since in terms of the FCO. Rapigro is a bio-stimulant, it falls within the definition of fertilizer; • fertilizers are covered under chapter 31; • Rapigro provides essential nutrients to plants; that it is brought by the farmers for use as a fertilizer for beneficial growth of plants; • that both the terms 'bio stimulant' and 'fertilizers' are defined under FCO; • in terms of circular No. 1022/10/2016-CX dated 6.4.2016. for any product to mer....
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....actions inside or outside living cells without undergoing any change in their chemical structure • Enzyme solely has protein or protein combined with a non protein compound of low' molecular weight acting as a cofactor • Enzymes do not include fertilizing elements eg Nitrogen, Phosphorus. • Rapigro contains organic fractions derived through fermentation process containing growth promoter, organic acid, protein & protein hydrolyzates, amino nitrogen, peptides, vitamins & micronutrients • Rapigro is a complex product containing nitrogen & is a bio-stimulant & therefore a fertilizer and not an enzyme. • Rapigro is a bio-stimulant & is registered with both Central and State Government; that it cannot be relegated to residual entry of heading 3507; • that they wish to rely on rule 1 of the General Rules of Interpretation which states that if a product can be classified in terms of heading of customs tariff, under a specific heading it should not be classified under another entry or residual entry; • that they wish to rely on the case of JOCIL Ltd [2011 (263) ELT 9 (SC). UNI Products [2020(372) ELT....
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.... Chapter 31 Tariff Item Description of goods Unit Rate of duty Standard Preferential Areas (1) (2) (3) (4) (5) 3101 ANIMAL OR VEGETABLE FERTILISERS, WHETHER OR NOT MIXED TOGETHER OR CHEMICALLY TREATED; FERTILISERS PRODUCED BY THE MIXING OR CHEMICAL TREATMENT OF ANIMAL OR VEGETABLE PRODUCTS 3101 00 - Animal or vegetable fertilisers, whether or not mixed together or chemically treated; fertilisers produced by the mixing or chemical treatment of animal or vegetable products : 3101 00 10 --- Guano kg. 7.5% - --- Other : 3101 00 91 ---- Animal dung kg. 7.5% 3101 00 92 ---- Animal excreta kg. 7.5% - 3101 00 99 ---- Other kg. 7.5% - Chapter 35 3507 ENZYMES; PREPARED ENZYMES NOT ELSEWHERE SPECIFIED OR INCLUDED 3507 10 - Rennet and concentrates thereof: --- Microbial rennet: 3507 10 11 ---- Animal rennet kg. 10% - 3507 10 19 ---- Other kg. ....
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.... kg. 10% - 3808 91 13 ---- D.D.V.P. (Dimethyle-dichloro-vinyl- phosphate) kg. 10% - 3808 91 21 ---- Diaginal kg. 10% - 3808 91 22 ---- Methyl bromide kg. 10% - 3808 91 23 ---- Dimethoate, technical grade kg. 10% - 3808 91 24 ---- Melathion kg. 10% - 3808 91 31 ---- Endosulphan, technical grade kg. 10% - 3808 91 32 ---- Quinal phos kg. 10% - 3808 91 33 ---- Isoproturon kg. 10% - 3808 91 34 ---- Fenthion kg. 10% - 3808 91 35 ---- Cipermethrin, technical grade kg. 10% - 3808 91 36 ---- Allethrin kg. 10% - 3808 91 37 ---- Synthetic pyrethrum kg. 10% - --- Goods specified in Supplementary Note 1 and 2 to this Chapter: 3808 91 41 ---- Goods specified in Supplementary Note 1 to this Chapter kg. 10% - 3808 91 42 ---- Goods specified in Supplementary Note 2 to this Chapter kg. 10% - --- Goods specified in Supplementary Note 3 and 4 to this Chapter : 3808 91 51 ---- Goods specified in Sup....
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..... (a) Enzymes in which the molecule consists solely of a protein (e g., pepsin, trypsin, urease). (b) Enzymes in which the molecule consists of a protein combined with a non-protein compound of low molecular weight, acting as a cofactor The cofactor may be either a metal ion (e.g., copper in ascorbate oxidase, zinc in human placental alkaline phosphatase) or a complex organic molecule called a coenzyme (e.g., thiamine diphosphate in pyruvate decarboxylase, pyridoxal phosphate in giularnme-oxo-acid aminotransferase». Sometimes both are required (II) According to : (a) their chemical activity as oxidoreductases. transferases, hydrolases, lyases, isomerases, ligases; or (b) their biological activity as amylases, lipases, proteases, etc This heading includes: (A) ''Pure" (isolated) enzymes. These are generally in crystalline form, and are mainly intended for use in medicine or in scientific research. They are not as important in international trade as enzymatic concentrates and prepared enzymes. (B) Enzymatic concentrates. These concentrates are generally, obtained from either aqueous or sol....
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....ertilizing elements namely nitrogen, phosphorous and potassium; other fertilizers (CETH 3105). For the purpose of classification of any product as "other fertilizers", chapter note 6 of Chapter 31 is relevant which provides that the term "other fertilizers" applies only to products of a kind used as fertilizers and contain, as an essential constituent, at least one of the elements nitrogen, phosphorus or potassium. It is quite clear that for any product to merit classification under CETH 3105 as other fertilizers, the product must have nitrogen or phosphorus or potassium or their combination as an essential constituent providing the essential character to the product. The chemical elements - nitrogen, phosphorus and potassium are also referred as macronutrients or primary fertilizer elements and are required in higher quantity by the plants. 4.2 Any product where the essential elements are not nitrogen or phosphorus or potassium or their mixture would not merit classification under CETH 3105. Further, the specific exclusion of separate chemically defined compounds as laid down in chapter note 1 (b) and in the HSN Explanatory Notes to the heading 3105.90, reinforce th....
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....physiological processes in plants. Their modes of application vary and their effects range from obstruction of the plant to enhanced growth vigour and improved crop-yield. 16. We find that the product in respect of which advance ruling is sought was manufactured and cleared by the erstwhile M/s. Isagro. The dispute in respect of the product's classification it is informed, is still pending. 17. During the course of personal hearing, we were provided and shown the copy of the label of Rapigro which is reproduced below: 18. Consequent to the personal hearing, the applicant has provided a copy of the certificate issued by M/s. Sowbhagya Biotech (P) Ltd., which broadly states as follows: • that they supply CPH [Cereal Protein Hydrolysate] in bulk to the applicant under Plant Growth Promoters (Organic Fertilizers); that it is protein based fertilizer commonly also known as Plant Growth Promoter; • it is derived from vegetable source i.e. Maize Protein (Gluten); • that it is a natural fertilizer & is not figuring in the schedule to FCO; • that they purchase maize protein treated with Nzyme & then treat with mild acids later wit....
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....Sowbhagya Bioitech P Ltd, Hyderabad [for short - M/s. Sowbhagya]. The applicant, thereafter sends this CPH liquid to M/s. R.P Chemtech, Ankleshwar, for converting it into Rapigro Liquid by adding DM water to the said CPH liquid and also manufacturing Rapigro granules through heating process. The applicant has also provided a process flow chart, [refer para 2.3 of the application], undertaken by M/s. Sowbhagya to obtain CPH liquid. 23. During the course of personal hearing, applicant was specifically asked as to what was the addition in step 5 of the process flow chart reproduced in para 2.3 of the application mentioned as 'organic nutrients obtained through fermentation'. The applicant has shied away from clarifying the same & has once again forwarded the certificate from M/s. Sowbhagya, the contents of which is already reproduced supra to substantiate their argument that it is derived from vegetable source ie maize protein (Gluten). 24. In the aforesaid backdrop, Rapigro cannot be termed as an Enzyme. Hence, we agree with the contention put forth by the applicant that the product would not fall within the ambit of 3507. However, this is notwithstanding the fact that in the p....
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....at affect the physiological processes of growth and development in plants when applied in low concentration. Plant growth regulators are active at low concentrations in promoting, inhibiting or modifying growth and development. They are either natural or synthetic compounds that are applied directly to a target plant to alter its life processes and its structure to improve quality, increase yields, or facilitate harvesting etc. These are in the nature of plant hormones and classical of them are auxins, cytokinins, gibberellins (all three promoters) and abscisic acid, ethylene (both inhibitors). PGRs in the list are not exhaustive and more growth substances are being discovered in this category. PGRs are naturally produced by plants and they act by controlling or modifying, plant growth processes such as formation of leaves and flowers, elongation of stems, development and ripening of fruits etc. Synthetic organic chemicals are also used as PGRs and are industrially produced and marketed. A list of some of the PGRs industrially produced in India is enclosed with the reply of IARI. 3.2 It would thus be noted that PGRs are different from nutrients, be it macronutrient or micr....
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....tors are mentioned as Plant-growth regulators are applied to alter the life processes 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 (e.g., gibberellic acid). Synthetic organic chemicals are also used as plant growth regulators. 29. We find that the applicant has vehemently stated that according to them Rapigro would be covered under TI 3101. Before dwelling on the same, we find it apprpriate to re-produce the explanatory notes of HSN in respect of 3101 31.01 - ANIMAL OR VEGETABLE FERTILISERS, WHETHER OR NOT MIXED TOGETHER OR CHEMICALLY TREATED; FERTILISERS PRODUCED BY THE MIXING OR CHEMICAL TREATMENT OF ANIMAL OR VEGETABLE PRODUCTS This heading covers: (a) Animal or vegetable fertilisers, whether or not mixed together or chemically treated; (b) Animal or vegetable products converted into fertilisers 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 so that hea....
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....ted 6.4.2016, has clarified on classification of Fertilizers. We have reproduced the relevant extract and hence for brevity the same is not being repeated. However, to summarize, the clarification states that fertilizers classified under chapter 31 may inter alia be minerals or chemical fertilizers - nitrogenous (CETH 3102), phosphatic (CETH 3103), potassic (CETH 3104) or fertilizers consisting of two or three of the fertilizing elements namely nitrogen, phosphorous and potassium. The chemical elements - nitrogen, phosphorus and potassium are also referred as macronutrients or primary fertilizer elements and are required in higher quantity by the plants. 31. On going through the TI 3101 we find that the description mentioned is of animal or vegetable fertilizer, whether mixed together or chemically treated, Guano, & Other which includes animal dung, animal excreta & others. The applicant has not specifically pointed out to us as to how the product Rapigro would fall under the description 'Others' ie CTH 31010099. Moreover, at the cost of repetition, the applicant has failed to divulge as to what is the addition of other "organic nutrients obtained through fermentation' which is ....
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....dules appended to this order or as may be notified by the State Government and includes a bio stimulant and namo fertilisers As per the explanation, essential plant nutrients includes any primary nutrients viz nitrogen, phosphorus and potassium, secondary nutrients like calcium, magnesium and sulphur and micro nutrients like zinc, manganese, copper, iron, boron and molybdenum. On going through the analytical composition provided by the applicant [refer para 2.4] we do not find any mention or inclusion of these secondary or micro nutrients. 33. The circular dated 6.4.2016 clarifies that "It may also be noted that notifications issued under FCO are not relevant for deciding classification under Central Excise Tariff". The averment therefore, that since they have applied and have been granted registration as a bio stimulant under FCO would not be the sole determining factor under the present proceedings. 34. Further the circular dated 6.4.2016 goes on to state that "Where the essential constituent giving character to the mixture is one or more of the three elements namely Nitrogen, Phosphorus or Potassium, the mixture shall be classified under any of the heading of chapter 31....
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.... • It helps plant through crucial physiological changes such as flowers formation and fruit set. • The keeping quality (shelf life) is markedly increased. • Increase colour intensity of leaves, flowers and enhances shelf-life of ornamental plants. • Absence of live microorganisms and toxins. • Does not leave any toxic residue on plant body. • Increase chlorophyll content of plant and stimulates photosynthesis. • Brings fast normalcy to metabolic imbalances. • Provides supplementary organic micronutrients, amino acids, short chain peptides, vitamins in a balanced form leading to overall plant development and growth. • A stepping-stone towards satisfying the needs of the emerging biotechnology oriented market segment. • it is compatible with most of agrochemicals, user friendly and environmentally non-toxic 35.2 A further reading of the technical bulletin of Rapigro states the following viz "Rate of application - 2 ml/lt water or 200 ml/acre." 36. We understand that both fertilizer and plant growth regulator are different. While a '....
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....n this case was whether the product manufactured was a drug or a cosmetic product. The relevant portion of the judgement is as under: 29. We cannot ignore the above broad classification while considering the character of the product in question. Certainly, the product in question is not intended for cleansing, beautifying, promoting attractiveness or altering appearance. On the other hand it is intended to cure certain diseases as mentioned supra. Based on the above the applicant states that since their product Rapigro is registered as a Bio stimulant under the FCO. it is a fertilizer. The averment made is not tenable since even the CBIC while clarifying has clearly stated that notifications issued under FCO are not relevant for deciding classification under Central Excise Tariff. This holds good even for classification under the GST. Even otherwise, what is stated is that the broad classification cannot be ignored. We have already held that as far as the product in question is concerned in terms of the findings recorded supra, the end use and the technical bulletin, the product Rapigro is a plant growth regulator. o Soulfeed Plant Product & Services P Lt....