TaxTMI 
TaxTMI 
2024 (9) TMI 1655
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....duct "Siapton 10L" as "fertilizer" under Central Excise Tariff Item [ETI] 3101 00 99 of the First Schedule to the Central Excise Tariff Act, 1985 [the Excise Tariff]. The department, however, believed that the product was a plant bio-stimulant and appeared to be a "plant growth regulator", which would be covered under ETI 3808 93 40. Show cause notices were, accordingly, issued to P.I. Industries requiring it to pay central excise duty as it had cleared the goods without payment of duty by classifying them as "fertilizer" instead of "plant growth regulator". The Commissioner confirmed the demand of central excise duty holding that the product was a plant growth regulator and not a fertilizer. P.I. Industries has assailed this order of the Commissioner in these four appeals. 2. Excise Appeal No's. 11643 of 2013 and 11644 of 2013 have been filed by M/s. Agro Pack [Agro Pack] and its Authorized Signatory Parth H. Patel. Agro Pack had classified the final product "Isabion" as "fertilizer" under ETI 3101 00 99. Show cause notices were issued and ultimately the Commissioner directed for classification of the product Isabion under ETI 3808 93 40 as a "plant growth regulator" and not as....
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....olved in Northern Minerals, except for the fact that in Northern Minerals the product was applied to soil, whereas in the appeals being heard by the Division Bench, the product was to be directly sprayed on plants/trees. The Division Bench observed that a plant growth promoter, so long as it promotes growth by altering the life processes of plant, will be a plant growth regulator and that it is not necessary that it should also be able to inhibit or otherwise modify (apart from promoting) plant processes. The observations made by the Division Bench in the referring order are as follows: "5. We have gone through the rival submissions. The appellants imported Siapton 10L in 200Ltr drums and the same is repacked and sold by them. The appellant sought classification of the product under Chapter heading 31 where repacking, labeling does not amount to manufacture, while the Revenue has sought to classify the product under Chapter heading 38 where repacking, labeling etc. amounts to manufacture. Chapter 31 covers fertilizers whereas Chapter 38, inter-alia, covers Plant Growth Regulator. It is not disputed that product Siapton 10L consists of various amino acids. ***** **....
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....ate or retard growth, enhance field, improve quality or facilitate harvesting etc. This description clearly lays down that there are multiple ways the plant physiological processes can be altered. Moreover, the HSN also makes it clear that apart from Hormones other "Synthetic Organic Chemicals" can also be PGRs.***** ***** From the above, it is seen that Tribunal holds that the PGR should be able to simultaneously accelerate and retard the growth of plant. This appears to be an erroneous finding. ***** ***** It is apparent that most PGR perform only one function of either retarding growth or inhibiting growth or, deflolianting or stimulating growth. Thus, the observation of Tribunal in the said case appears to be misplaced. The said decision has been approved by the Hon'ble Apex Court, however, the approval of Hon'ble Apex Court does not mean approval of all grounds of the order. In the said case, the product was being applied to soil as against the fact that PGRs are not applied to soil but directly to plant. A fact recorded in the said order, in Para 7.3, reproduced above. Thus in the said case the facts were different on a cru....
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....escribing it as a mixture of amino acids, peptones and peptides and classifying it as a "fertilizer" under Chapter Heading 3101 of the Customs Tariff for the purpose of basic customs duty. After bringing the said product in the factory, it carried out activity of re-packing from bulk pack to small packs and also carried out labeling activity. P.I. Industries, thereafter, removed the product from the factory without payment of duty as there is no deeming fiction of "manufacture" in Chapter 31 of the Excise Tariff. The audit party, however, believed that the product was a "plant growth regulator" falling under Chapter Heading 3808 of the Excise Tariff attracting excise duty. 12. The show cause notice dated 16.09.2009 issued to P.I. Industries, contains the following allegations: "3/- Whereas on going through the said technical documents/papers, it was noticed that the Siapton 10L is defined as a unique product of natural origin having multiple activities as a "plant biostimulant", an anti stress agent, a nutritional equilibrator and enhancer in the improved use of macro and micro elements and as an indirect improver of activity of some enzymatic systems to bring about a t....
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....rocesses in plants. Thus the submission of the assessee that PGR always inhibits the growth of plant and causes phytotoxicity is on wrong footing. ***** 18.8 In the present case as discussed in foregoing paras, it is clear from the product literature produced by assessee and also from above referred various field studies that "SIAPTON 10L" a) It is a Biostimulant. b) It constituents mainly organic fraction. c) It is used directly through leaves i.e. foliar applications. d) It influences various physiological processes in plants. e) It increases growth and yield. I find that "SIAPTON 10L" being a Biostimulant cannot be a Fertilizer/Plant growth Promoter/Nutrient by virtue of my findings in regards to Biostimulants in foregoing paras 18 and 18.1 and also on account that fertilizers are used in soil, while "SIAPTON 10L" is used through foliar application/drip irrigation. "SIAPTON 10L" has also satisfied the three main characteristics of "Plant Growth Regulator" i.e. it constituents mainly organic fraction; it is used directly i.e. foliar application, and It influences various physiological processes/metab....
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.... 10L is not a plant growth regulator. The report is reproduced below: Doctors' Analytical Laboratories Pvt. Ltd., Pune TEST REPORT Date: 01/Mar./2011 Customer Name & Address Isagro Asia Agrochemicals Pvt. Ltd., Plot No. 640, GIDC, Panoli-394116, Dist. Bharuch, Gujarat, India Supplier/Exporter Name & Address Isagro Asia Agrochemicals Pvt. Ltd., Plot No. 640, GIDC, Panoli-394116, Dist. Bharuch, Gujarat, India Lab Code And Date Of Sample Received 711010088 05/Jan./2011 Sample Name SIAPTON 10L (B.No. 15A-372 mfg.20.12.2010 & Exp. 19.12.2012) Condition of Sample Packed in Plastic Bottle Test Performance Date 10/Jan./2011 To 01/Mar./2011 Sr. No. Name of Test Result Method of Analysis Equipment Used Plant Growth Regulators 1 Indol Acetic Acid Not Detected SOP No. QP/DALPL/098 HPLC 2 Gibberellic Acid Not Detected SOP No. QP/DALPL/098 HPLC 3 1-Naphthyl Acetic Acid(NAA) Not Detected....
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....ROWTH REGULATOR SIAPTON 10L is not a PPP because it does not control any disease of any kind. As far as a PGR action is concerned, there is no doubt that the actions of SIAPTON 10L (and of the amino acids and peptides from animal by-product) are various; the product acts on improving growth and overcoming stress situations. It improves for example nitrogen assimilation. NOTABLY, THESE ACTIONS ARE TYPICAL OF FERTILISERS; IN NO WAY SIAPTON 10L CAN BE INCLUDED IN THE GROUP OF PRODUCTS UNIVERSALLY RECOGNISED AS "PLANT GROWTH REGULATOR" In fact, a "PGR is defined as an organic compound, either natural or synthetic, that modifies or controls one or more specific physiological processes within a plant". A further definition is : "plant growth regulators (also known as growth regulators or plant naturally produced by plants, substances that control normal plant functions, such as root growth, used to alter the growth of a plant or plant part. Hormones are substances naturally produced by plants, substance that control normal plant functions, such as root growth, fruit set and drop, growth and other development processes. SIAPTON 10L does not mod....
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....xcise duty is payable on MRP/RSP basis (as applicable at the relevant period) allowing for such abatement as given under Third Schedule of CETA. The details of month wise manufacture and clearance and duty payment details for ISABION for the period from 2009-10, 2010- 11 & 2011-12 are shown in the Annexure-'A' attached to this show cause notice." (emphasis supplied) 21. The relevant portion of the order dated 04.03.2013 passed by the Commissioner is reproduced below: "32.4. I have gone through the description of "Isabion", as discussed in forgoing paras and the facts that emerged are - It mainly constituent organic fraction. - It is used directly through leaves. - It is used as organic bio-stimulant of roots, leaves, flowers and fruits on every kind of crops and recommended during the active growth phases of the production cycle i.e. they alter the physiology of various parts of plants. - It helps in mitigating the damage done by hail, phyto-toxicity, parasites and diseases, drought, etc. I find that "Isabion" being a Biostimulant cannot be a Fertilizer/Plant growth Promoter/Nutrient by virtue of my findings in regards to ....
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....ar spray or by soil irrigation. ISABION is recommended as an organic bio-stimulant of roots, leaves, flowers and fruits or every kind of crops: Fruit trees- Citrus trees, Grape Vines, Mango & other Fruits, Vegetables- Tomato, Brinjal, Cole crops, Potato, Chilli, Cucurbits, Onion, All Leafy Vegetables. Field Crops- Cereals, Pulses, Oilseeds, Cotton, SugarBeet, Flowers and Ornamental crops. ISABION is recommended during the active growth phases of the production cycle, in nurseries and in young plantations. ISABION helps the crops in mitigating the damage done by hail, phyto- toxicity, parasites and diseases, drought, etc. Dosage rates and use: ISABION has a flexibility of usages as foliar spray, soil application or fertigation. The number of applications & timing depends on the crop, however application at the time of transplantation, flowering, fruit-setting, ripening are the most important. Foliar spray: 200-300 ml/100 L of water (For more details on application refer attached Isabion Booklet). Chemical Composition: Organic fraction derived from amino acids, peptides mixture 62.5% w/w Inorganic faction and aqu....
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....g. Nil 3101 00 92 ---- Animal excreta Kg. Nil 3101 00 99 ---- Other Kg. Nil 29. Chapter 38 of the First Schedule to the Excise Tariff deals with Miscellaneous Chemical Products, including "plant growth regulators" and the relevant entries are: Tariff Item Description of goods Unit Rate of duty (1) (2) (3) (4) 3808 Insecticides, rodenticides, fungicides, herbicides, antisprouting products and plantgrowth regulators, disinfectants and similar products, put up in forms or packings for retail sale or as preparations or articles (for example, sulphur- treated bands, wicks and candles, and fly-papers) 3808 93 -- Herbicides, anti-sprouting products and plant-growth regulators 3808 93 10 --- Chloromethyl phenozy acetic acid (M.C.P.A.) Kg. 8% 3808 93 20 --- 2:4 Dichloro phenozy acetic acid and its Esters Kg. 8% 3808 93 30 --- Gibberellic acid Kg. 8% 3808 93 40 --- Plant growth regulators Kg. 8% 30. It would be seen that the description of goods under ETH 3101 is "animal or vegetable fer....
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....It can be used with fertiliser nutrients readily soluble in water. It is also used when there is a soil fixation problem. In this method, it is difficult to apply sufficient amount of major elements. Nutrient concentration of 1% to 2% can be applied without injury to foliage. Foliar application, therefore, is commonly used only to apply minor elements or to supplement the major elements. Fertigation This application of fertilisers is through the irrigation water. Nitrogen is the principle nutrient commonly used for this purpose. Potassium and highly soluble forms of zinc and iron can also be readily applied this way. When an element forms precipitate with another substance commonly found in the irrigation water, it is not advisable to use this method. Phosphorus and anhydrous ammonia may form a precipitate in water with high calcium and magnesium content. So they are not used in fertigation. Normally, this system is used through drip irrigation, and liquid fertilisers containing all three major nutrients are normally used." 36. When plant nutrients are applied by foliar application, smaller quantities of fertilizer materials are required when compared to applic....
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.... between short chain peptides, long chain peptides and free amino acids. The product label of Isabion also mentions that Isabion contains a well balanced and optimal ratio between short chain peptides, long chain peptides and free amino acids. 43. According to Agro Pack, the Chemical Examiner of Central Excise and Customs Laboratory reported that Isabion contains nitrogen, potassium and phosphorous, which according to Agro Pack provide nutrient to the recipient plant. An analytical report submitted by Syngenta concludes that Isabion contains 58% free amino acid with nitrogen, phosphorus and potassium content as 11.24%, 00.37% and 0.041%, respectively. These two reports demonstrate the presence of macro-nutrients. 44. It cannot be doubted that both Siapton 10L and Isabion are biostimulants, and indeed the Commissioner has also found as a fact that both these products are bio-stimulants. 45. Bio-stimulants are fertilizers which influence the growth, yield and quality of plants by providing essential nutrients. The Ministry of Agriculture also considers "bio-stimulants" as "fertilizer", and hence, requires compliance of the Fertiliser (Inorganic, Organic or Mixed) (Control) O....
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....nce. (ii) Cytokinins: They stimulate cell division and promote lateral bud growth. (iii) Gibberellins: These regulate stem elongation, seed germination, and flowering. (iv) Abscisic Acid: It influences seed dormancy, drought tolerance, and stomatal closure. (v) Ethylene: It affects fruit ripening, flowering, and response to stress. 47. Plant growth regulators are used in specific concentrations to manipulate plant growth responses, such as controlling fruit ripening, promoting flowering, or preventing premature shedding of fruits. 48. It can, therefore, be said that fertilizers provide essential nutrients for plant growth and health, while plant growth regulators are chemicals that influence specific aspects of plant growth and development by regulating physiological processes. Both are vital tools in modern agriculture to optimize plant growth and maximize crop yields. 49. The following four aspects would demonstrate the distinction between fertilizers and plant growth regulators. Purpose (i) Fertilizers primarily provide essential nutrients to plants, aiding in their growth, development, and overall health. They ensure that....