TaxTMI 
TaxTMI 
2002 (10) TMI 95
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation of the circular and for a direction on the appellants before us, to classify TGP etc. and bulk formulations under sub-heading 3808.10 and for a refund of the enhanced duty paid for the past under protest or any excess amount received by the Department. The Delhi High Court accepted the respondent's contention and allowed the writ petition. On the application of the appellants, leave was granted by this Court to appeal against the High Court's judgment. 2.While impugning the decision of the High Court, the appellants have conceded that prior to 1996 TGP and insecticides etc. in bulk were classified under the Tariff Heading No. 38.08 of the Act. According to the appellants, because this tariff heading was amended in July 1996, after 1996 TGP etc. in bulk concentrated forms were excluded from Heading No. 38.08 and were covered under Chapter 28 or 29 of the Act depending upon the composition. This position, according to the appellants, was further clarified when Chapter 38 Note 1 (a) (2) was amended in 1997. 3.According to the respondent the amendments in 1996 and 1997 have made no difference to the classification of bulk pesticides and insecticides etc. It is submitted that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....apter covered the items mentioned in Note 1 (a)(2). This was also reflected in the Tariff Heading 38.08 which then read as : "38.08 Insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectant and similar products." 6.Therefore the respondent's products were expressly classifiable under this tariff heading and this position is not now disputed by the appellants. Incidentally the concession was also made before the High Court in the appellants' affidavit. Besides the circular dated 27th July, 1995 issued by CBEC under S. 37B of the Central Excise Act, 1944 stated that "The Pesticide Chemicals and formulations will both be classified under heading 38.08 of the CETA, 1985". Similarly the Department of Revenue's circular dated 28th October 1997 records, "Prior to the 1996 Finance Bill (2), there was no distinction between bulk packings and retail packings, and all pesticides were falling under heading no. 38.08''. However, earlier a question had arisen as to whether the processing of concentrated basic pesticidal chemicals through addition of inert carriers/solvent and dispersing and stabilising agents which rendered them....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar as the Chapter Notes were concerned Note 1 was left untouched but Note 2 was inserted which reads : "In relation to products of heading No. 38.08, addition of chemicals and other ingredients like inert carriers or solvents, surface active, dispersing and stabilising agents, emulsifiers, wetting and dispersing agents, deodorant, masking agent, attractants and feeding stimulants to pesticidal chemicals in concentrated form, labelling or relabelling of containers intended for consumers and repacking from bulk pack to retail packs or the adoption of any other treatment to render the product marketable to the consumer shall amount to 'manufacture'." 10.Patently, Chapter Note 2 of Chapter 38 proceeds on the basis that TGP is covered by Chapter 38. Were it not so it was not necessary to provide that the addition of chemical pesticides and re-packing and labelling etc. of the product would amount to manufacture. The language in Chapter Note (2) that "addition of chemicals and other ingredients" to "products of heading No. 38.08" and adoption of any other treatment to render the product marketable would amount to manufacture, plainly understood means that (i) the product (without addit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f additives or treatment. This would include the respondent's product. 15.There is also substance in the submission of learned counsel for the respondent that classification of TGP, insecticides etc. in bulk form under Tariff Heading 38.08 would be in keeping with the Rules for interpretation of the Schedule to the 1985 Act. The Rules in so far as they are relevant provide : "2(b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance." 3. When by application of sub-rule (b) of rule 2 or for any other reason, goods are prima facie, classifiable under two or more headings, classification shall be effected as follows : (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However when two or more headings each refer to part only of the materials or substances contained in mixe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hasized above, indicate that what was originally classified under Tariff Heading 3808 viz. concentrates would continue to be so classified and in addition formulations of such concentrates would be liable to excise duty. It was therefore not the intention of the 1996 amendment to exclude concentrates of insecticides etc. in bulk form from Chapter 38 but to extend the incidence of excise duty to formulations from and retail packages of the concentrates. 20.It is not open to the Revenue now to take a stand contrary to what had been expressed in the Trade Notice. As stated by this Court in Collector of Central Excise, Bombay v. Kores (India) Ltd : "A Tariff Advice or a Trade Notice issued by the Board certainly does not bind the Tribunal or the Courts and an assessee may argue that it is erroneous; but it is not open to the Revenue to advance arguments that are contrary to the terms thereof." [See also Steel Authority of India v. Collector of Customs, Bombay - 2000 (115) E.L.T. 42 (S.C.)] 21.In 1997, there was a further amendment to the Chapter Note of Chapter 38. By this amendment, Chapter Note 2 which had been introduced by the 1996 amendment was left untouched as also the Tarif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re effected to bring it on par with the HSN. Sub-headings 3808.10, 3808.20, 3808.30, 3808.40 and 3808.90 respectively of the HSN refer to "Insecticides", "Fungicides", "Herbicides" "Disinfectants" and "others". The explanatory note clarifies that the classification covered products (1) when they are put up in packings or in such forms that there can be no doubt that they will normally be sold by retail and (2) when they have the character of preparations. It also says : "Intermediate preparations, requiring further compounding to produce the ready for use insecticides, fungicides, disinfectants, etc. are also classified here, provided they already possess insecticidal, fungicidal etc. properties." Hence preparations with insecticidal, fungicidal properties are classifiable under Heading 38.08. 25.The HS of Commodity classification which was developed by the World Customs Organisation, Brussels was adopted by India also in the ITC (HS) Classification of Export and Import items, 2002-2007 which was issued by the Government under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of the Export and Import Policy, 2002-2007. The ITC (HS) lik....