TaxTMI 
TaxTMI 
2024 (12) TMI 1451
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....d referred the matter to the larger bench and the larger bench vide Interim Order No. 25-30/2024 dated 02.09.2024 settled the dispute whereby it was held that the product in question merit classification as fertilizer under Central Excise Tariff Item No. 31010099 and not as plant growth regulator under Central Excise Tariff Item No. 38089340. Therefore, the issue is settled and in view of the said larger bench decision in these appeals itself, the appeals deserves to be set aside. 3. Shri M.G Rayka, Learned Additional Commissioner appearing on behalf of the Revenue fairly concedes that now the issue is settled as per the larger bench decision vide order dated 02.09.2024. 4. Considering the submission made by both sides and perusal of record. We find that since the larger bench of this tribunal has finally decided the question in dispute in these appeals vide Interim Order No.25-30/2024 dated 02.09.2024 , these appeals can be disposed of in accordance with the decision given by the larger bench. The relevant order of the larger bench is reproduced below:- "8. It is for this reason that the Division Bench referred the following issue in P.I. Industries to be decided by....
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....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 tremendous boost in quality and quantity of the product. But none of the said documents/papers (technical literature) indicate that Siapton 10L is fertilizer ***** 4/- Whereas the description given in the said technical documents/papers indicated that Siaption 10L is a plant biostimulant, further a plant biostimulant is a plant growth stimulant. Hence, Siapton 10L appe....
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....PTON 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/metabolic processes in plants, which further help in increasing growth and yield of plants. Thus I find that the department has rightly alleged that "SIAPTON 10L" is a "Plant Growth Regulator" which merits classification under chapter heading 3808. 93 of the Central Excise Tariff Act, attracting applicable Central Excise duty. 19. I have also gone throu....
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....o 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 SOP No. QP/DALPL/098 HPLC 4 6-Benzyladenine Not Detected SOP No. QP/DALPL/098 HPLC 5 Hydrogen Cynamide Not Detected SOP No. QP/DALPL/214 LCMS/MS 6 Ethephon Not Detected SOP No. QP/DALPL/214 LCMS/MS 7 Florchlorfenuron Not Detected SOP No. QP/DALPL/214 LCMS/MS 8 Mepiquate Chloride Not Detected SOP No. QP/DALPL/214 LCMS/MS 9 Paclobutrazole Not Detected SOP No. QP/DALPL/214 LCMS/MS 10 Triacontanol Not Detected SOP No. QP/DALPL/21....
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....D 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 modify, or control or alter any physiological process; it just provides Nitrogen (in an organic form for an improved up-take and utilization) and does what nitrogen does: improved crop growth and yield. SIAPTON 10L instead of providing the element alone, provides Nitrogen in an organic form (amino acids and peptides) so it provides the building blocks for an improved growth. ***** We conclude that the classification of SIAPTON 10L as PGR is not appropriate, being the classification as "FERTILISER" the....
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.... "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 Biostimulants in foregoing paras and also on account that fertilizers are used in soil, while "Isabion" is used also through foliar application. I find that Biostimulant, Plant Biochemical Regulators and Plant Growth Regulators are treated on equal footing and "Isabion" 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....
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....th 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 aqua 37.5% w/w Total 100% w/w" 25. During the audit, a sample of Isabion was drawn and forwarded to the Chemical Examiner, Central Excise & Customs Laboratory at Vadodara. As per the said report, Isabion contains nitrogen, potassium and phosphorus. Syngenta also obtained analytical test report on chemical analysis of Isabion and the said report dated 10.07.2018 concludes that Isabion contains 58% free amino acid with nitrogen, phosphoru....
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.... 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 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 fertilizers" while the description of goods under ETH 3808 are insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products. Plant growth regulators are described under ETI 3808 93 40. 31. It is in the light of the aforesaid that the submissions that have been advanced by the learned counsel appearing for P.I. Indus....
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....he 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 application through the soil. Upon foliar application of the macronutrient fertilizer, the nutrients enter the leaves through the stomata, correct the disorders, and improve the yield and quality of the produce. Urea is generally suitable for foliar application owing to its high solubility, ease, and quick absorption by the plant tissue. 37. It is an undisputed....
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....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) Order, 1985. In this connection, it needs to be noted that "bio-stimulants", being a fertilizer, was brought under this Control Order by Order dated 23.02.2021 issued by Ministry of Agriculture and Farmers Welfare. The definition of "bio-stimulants" contained in the aforesaid Order excludes plant growth reg....
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..... (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 plants have an adequate supply of nutrients for optimal performance. (ii) Plant growth regulators, on the other hand, influence and control specific physiological processes within plants, such as growth patterns, flowering, fruit development, and re....