TaxTMI 
TaxTMI 
2023 (7) TMI 810
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....ow 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 merit classification under CETH 3105 as other fertilizers it must have nitrogen, or phosphorus or pot....
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.... 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 465 (SC)]. Mauri Yeast India P Ltd [2008 (225) ELT 321 (SC)], HPL Chemicals Ltd [2006 (197) ELT 324 (SC)], Gujarat Perstrop Electronics Ltd [2005 (186) ELT 532 (SC)]. 7. In view of the foregoing, the applicant has filed this application seeking advance ruling on the below mentioned questions viz 1. Classification of Rapigro under the Customs Tariff Act, 1975; 2. Cla....
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....cally 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. 10% - --- Other : 3507 10 91 ---- Animal rennet kg. 10% - 3507 10 99 ---- Other kg. 10% - 3507 90 - Other : 3507 90 10 --- Industrial enzymes (textile assistant) kg. 10% - 3507 90 20 --- Pancretin pure (excluding medicament) kg. 10% - 3507 90 30 --- Pepsin (excluding medicament) kg. 10% - 3507 90 40 --- Pectin esterases pure kg. 10% - 3507 90 50 --- Pectolytic enzyme (pectimase) kg. 10% - --- Other enzymes of microbial origin: ....
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....y Note 2 to this Chapter kg. 10% - --- Goods specified in Supplementary Note 3 and 4 to this Chapter : 3808 91 51 ---- Goods specified in Supplementary Note 3 to this Chapter kg. 10% - 3808 91 52 ---- Goods specified in Supplementary Note 4 to this Chapter kg. 10% - --- Other 3808 91 91 ---- Repellants for insects such as flies, mosquito kg. 10% - 3808 91 92 ---- Paper impregnated or coated with insecticides such as D.D.T. coated paper kg. 10% - 3808 91 99 ---- Other kg. 10% - 3808 92 - - Fungicides: 3808 92 10 --- Maneb kg. 10% - 3808 92 20 --- Sodium penta chlorophenate (santrobrite) kg. 10% - 3808 92 30 --- Thiram (tetra methyl thiuram disulphide) kg. 10% - 3808 92 40 --- Zineb kg. 10% - 3808 92 50 --- Copper oxychloride kg. 10% - 3808 92 60 --- Goods specified in Supplementary Note 5 to this Chapter kg. 10% - 3808 92 70 --- Goods specified in Supplementary Note 6 to this Chapter kg. 10% - 3808 92 90 --- Other kg. 10% - 3808 93 -- Herbicides, anti-sprouting products and plant-growth regulators 3....
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.... various proportions, can be standardised or stabilised. It should be noted that certain standardising or stabilising agents may already exist in the concentrates in variable quantities, deriving either from the fermentation liquor or from the clarifying or precipitating processes. The concentrates can be obtained, for example, in powder form by precipitation or freeze-drying or in granular form by using granulating agents or inert supports or earners. (C) Prepared enzymes not elsewhere specified or included Prepared enzymes are obtained by further dilution of the concentrates mentioned in Part (B) above or by intermixing isolated enzymes or enzymatic concentrates. Preparations with substances added, which render them suitable for specific purposes, are also included in this heading, provided they are not covered by a more specific heading in the Nomenclature. This group includes, inter alia : (i) Enzymatic preparations for tenderising meat, such as those consisting of a proteolytic enzyme (e.g., papain) with added dextrose or other foodstuffs. (ii) Enzymatic preparations for clarifying beer, wine or fruit juice (e g., pectic enzymes containing added gelatin, bentonit....
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....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. 15. Explanatory notes of HSN 3808 states as under: 3808- Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products, put up in forms or Cachings for retail sale or as preparations or articles (for example, sulphur-treated bands, wicks and candles, and fly-papers) (+). 3808.50 - Goods specified in Subheading Note I to this Chapter - Other: 3808 91 - Insecticides 3808 92 - - Fungicides 3808 93 - - Herbicides, anti-sprouting products and plant-growth regulators 3808....
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....he rate of GST under the various competing entries viz Sr.No. Tariff Item (TI) Rate of GST Remarks 1 3101 5% The applicant now wants Rapigro to be classified under this TI. 2 3507 18% The applicant and its predecessor M/s. Isagro, was classifying the product Rapigro under this TI. 3 3808 18% Department in the earlier rounds of classification dispute had ordered classification of Rapigro under this TI. The GST rate of both TI 3507 and 3808 being 18%, possibly could be the reason for the applicant seeking a ruling proposing classification under TI 3101, which as is evident, was never in contention in the past as far as the classification of Rapigro is concerned. 21. Be that as it may, we now take up the classification of Rapigro. The dispute primarily is whether the product is a fertilizer as claimed by the applicant or a plant growth regulator. We note that there is only a fine distinction between 'fertilizer' and a 'plant growth regulator'. While fertilizer is generally for promoting the growth of plant or crop for desired increased harvest, the plant growth regulators work on specific areas resulting in modified growth or even retardation of certain growth. We fi....
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....igorous plant/larger leaves; better flowering, better fruit in larger size; * it increases plant resistance/tolerance to pest and diseases; * it rejuvenates plants exposed to climate stresses and other injuries; it reduces Hower drop and fruit fixation; * it is non-toxic and safe for use. 26. The two competing entries post our finding supra that Rapigro would not fall within TI 3507 are TI 3101 and TI 3808. Now chapter note to chapter 38 of the Customs Tariff Act, states as follow: NOTES: 1. This Chapter does not cover: (a) separate chemically defined elements or compounds with the exception of the following: (1)....; (2) insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products, put up as described in heading 3808: 27. The applicant's reasoning as to why Rapigro merits classification under 3101 as a fertilizer, is mentioned in detail in para 5 above. For the sake of brevity, we are not repeating it. To summarize, we find that the applicant has stated that they had applied & was granted registration for the product as a 'bio-stimulant' under clause 20C(5)(b) of the FCO & being a bio-....
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....lants when applied in low concentrations. Plant growth regulators are active at low concentrations (1-10ng/ nl) 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 or its structure to improve quality, increase yields, or facilitate harvesting. In modern agriculture, people have established the benefits of extending the use of plant hormones to regulate growth of other plants. When natural or synthetic substances used in this manner, they are called Plant Growth Regulators. Role: * Plant hormones are produced naturally by plants and are essential for regulating their own growth. They act by controlling or modifying plant growth processes. such as formation of leaves and flowers. elongation of stems. development and ripening of fruit etc. * Plant hormones rarely act alone, and for most processes-- at least those that are observed at the organ level-many of these regulators have interacted in order to produce the final effect. Examples: * Classical plant hormones (auxins, cytokinins. gibberellins, abscisic acid. ethylene) and growth regulatory s....
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....l scouring residues. (8) Mixtures of dried blood and bone meal. (9) Stabilised sewage sludge from urban effluent treatment plants. Stabilised sewage sludge is obtained by screening the sewage effluent to remove large objects and settling out grit and heavy non-biological constituents; the remaining sludge is then allowed to air dry or is filleted. The stabilised sludge so obtained contains a high proportion of organic matter and also contains some fertilising elements (e g. phosphorus and nitrogen). However, such sludge containing other materials (e.g. heavy metals) at a high concentration, which make the stabilised sludge unfit for use as fertilisers, is excluded (heading 38.25) The heading also excludes (a) Animal blood, whether liquid or dried (heading 05.11) (b) Powdered bone, horn or boof or fish waste (Chapter 5). (c) Flours, meals and pellets of meat or meat offal of fish or of crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption (heading 2341), and tuber products covered by Chapter 23 (oil cakes, brewing or distilling dregs, etc.) (d) Ash from bone, wood, peal or coaI (heading 26.21) (e) Mixtures of the natural fertilisers of thi....
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....el (Ni) and chlorine (Cl) are classified as plant micronutrients. Plant Growth Regulators Naturally Found: * The plant hormones are identified as promoters (auxins, gibberellin and cytokinin), inhibitors (abscissic acid and ethylene) and other hypothetical growth substance(florigen, flowering hormone, etc.,) * More recently discovered natural groMth substances that have phytohormonal-like regulatory roles (polyamines, oligosaccharins, salicylates, jasmonates. sterols, brassinosteroids, dehydrodiconiferyl alcohol glucosides, turgorins. systemin. unrelated natural stimulators and as well as myoinositol. Plant Growth Regulators which are produced industrially are listed in Table 1. As the applicant has not disclosed the constituents added in step 5 as mentioned in process flow chart, it is difficult to exclude this product from classification as a plant growth regulator falling in chapter 3805. 32. Further, the applicant has relied on the definition of fertilizers as defined under FCO, which states as follows: Fertiliser means any essential substance, either in straight or mixed form and derived from either inorganic, organic or mixed sources, that is used or intended to he ....
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....elp enhance different physiological process in plants; * When it is applied, the plants absorb vitamins, organic acids, etc.; * It increases these compounds level in plants * The benefits/effects are already listed in para 25 above. 35.1 Further, we find that the technical literature also lists the important characteristics of "'Rapigro". Important characteristics of "RAPIGRO" * Activates absorption of available soil nutrients and provides required minerals in readily available form. * Does not affect the genetic make-up of plant but increases yield and crop quality by improving the expression of the genetic potential of the crop. * Vitalizes the plant and induces tolerance to pests and diseases. * Reduces the vegetative growth period without any deleterious effect on the overall duration of productive phase of plant. * Induces the strength to withstand adverse environmental conditions. (High or low temperature, drought, all of which reduce crop yield). * Increases the average yield of plant by stimulating the photosynthetic activity and result in high profitability. * Induces early and uniform maturity of fruit (size, shape, colour development). * The organ....
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....f the product in question RAPIGRO, is only 2 ml/lt water or 200 ml/acre. meaning thereby that such low quantity of formulation is only required of which the active ingredient will be considerably very negligible, the reason being that the formulation will also include active ingredient along with the filler. This leads to the conclusion that the product is effective in very low concentration. * The characteristics of the product RAPIGRO inter-alia clearly state that the product reduces the vegetative growth period without any deleterious effect on the overall duration of the productive phase of plant. CBIC circular dated 6.4.2016, supra regarding classification of PGR, clearly states viz "They are either natural or synthetic compounds that are applied directly to a target plant to alter its life processes and its structure to imporove quality, increase yields or facilitate harvesting etc." Thus we find no difficulty in holding that the product Rapigro merits classification under TI 38089340 as a Plant Growth Regulator. 37. The applicant has relied upon various judgements viz o BPL Pharmaceuticals Ltd (1995(77) ELT 485 (SC); The dispute in this case was whether the product....