TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 165
X X X X Extracts X X X X
X X X X Extracts X X X X
....he appellant is engaged in manufacture, import, export, wholesale, retail sale and distribution of Agro Chemicals, Bio-Control, Agri-Inputs and Bio-Stimulants, including Rapigro Liquid as well as Rapigro Granules (collectively "Rapigro"]. 4. The appellant has further stated that M/s. Isagro (Asia) Agrochemicals P Ltd [for short - M/s. Isagro] merged with P I Industries Ltd & the B2C vertical of M/s. Isagro was transferred to M/s Jivagro Limited. Prior to this merger, M/s. Isagro was engaged in the manufacture of the product Rapigro & was classifying it under HSN 3507 of CETA '85. It is the appellant's case that though they are clearing Rapigro by classifying it under HSN 3507, however, now they feel that the product merits classification under CTH 3101/3105 and, on this premise, had approached the GAAR [Gujarat Authority for Advance Ruling] seeking a ruling on the below mentioned questions viz (i) Classification of Rapigro under the Customs Tariff Act, 1975; (ii) Classification of Rapigro under the Central Goods & Services Tax Act, 2017; (iii) Rate of tax payable on Rapigro. 5. GAAR, post admittance & personal hearing, pronounced its impugned ruling....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de active ingredient along with the filler. This leads to the conclusion that the product is effective in very low concentration. h) the characteristics of RAPIGRO inter-alia clearly state that it reduces the vegetative growth period without any deleterious effect on the overall duration of the productive phase of plant. 7. Aggrieved, the appellant is before the GAAAR [Gujarat Appellate Authority for Advance Ruling], against the impugned ruling, dated 30.6.2023, raising the following averments, viz a) that GAAR took various extraneous considerations into account, which have no bearing on the classification of Rapigro; b) that the appellant cannot force M/s. Sowbhagya, to disclose proprietary information in respect of CPH liquid; c) that the appellant is not party to any dispute of classification of Rapigro in the past; d) that once the product is notified as fertilizer under FCO & bio-stimulant and protein hydrolysates the same cannot be treated as PGR under chapter 3808; that they would like to rely on the judgement in the case of Vasu Pharmaceutical 2017 (350) ELT 166; e) for a product to be covered under PGR it needs to ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., dated 19.11.2014 of the Plant Pathology of the Indian Agricultural Research Institute, New Delhi; g) OIO No. 16/2006(ADC), dated 10.10.2006 passed by the ADC, Customs and Central Excise, Hyderabad-III Commissionerate, Hyderabad; i) Northland Industries [1988 (37) ELT 229 (Tri.)] j) Hamdard (Wakf) Laboratories [1999 (113) ELT 20 (SC)] k) Vardhman Fertilizers & Seeds Private Limited [2017 (345) ELT 560 (Tri.) l) Solufeed Plant Product & Services Limited [2018 (364) ELT 999 (Tri.) m) GB Agro Industries - [2022 (57) GSTL 393 (AAAR-Guj.) n) Criyagen Agri & Biotech Private Limited- [2023 (74) GSTL 241 (AAAR - Kar.) o) Northern Minerals Limited - [2001 (131) ELT 355 (Tri.)] p) Northern Minerals - [2003 (156) ELT A161 (SC)] q) Safex Chemicals India Limited - [2017 (7) GSTL 234 (Tri.)] r) Jai Shree Rasayan Udyog Limited - [2015 (316) ELT 338 (T)] s) Leeds Kem - [2001 (134) ELT 294 (Tri.)] t) PI Industries Limited vide Interim Order No. 25-30/2024. dated 2.9.2024 u) PI Industries Limited [Final Order No. 13047-13052/2024. dated 5.12.2024]. FINDINGS 9. We have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....th regulators work on specific areas resulting in modified growth or even retardation of certain growth. We find that as far as classification under TI 3507 is concerned, the applicant has himself in depth provided the reasoning as to why Rapigro would not fall within the ambit of TI 3507. The department has since years been requesting/informing their predecessor [M/s. Isagro] that Rapigro is not classifiable under TI 3507. The explanatory notes which we have reproduced above, clearly state that enzymes are organic substances produced by living cells & have the property of causing & regulating specific chemical reactions inside or outside living cells without themselves undergoing any change in their chemical structure. 22. As per the manufacturing process, applicant purchases CPH [Cereal Protein Hydrolysate] liquid from M/s. Sowbhagya Bioitech P Ltd, Hyderabad [for short - M/s. Sowbhagya]. The applicant, thereafter sends this CPH liquid to M/s. RP 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ional Company Law Tribunal vide its order dated 6.12.2021. 12. Further, as far as the test reports, annexed in the compilation submitted during the course of personal hearing, as Annexure 2, 3 and 4 are concerned, viz Annexure Description Page No. Written Statement dated June 25, 2025. 1-16 1. Original Label of Rapigro Liquid. 17 2. Certificate of Analysis dated September 17, 2011 and September 26, 2011 of Rapigro issued by Doctors' Analytical Laboratories Private Limited. 18 - 25 3. Test Report by SGS of Rapigro dated August 30, 2012. 26 4. Test Report No. 40/BP/14-15 dated May 12, 2014 of the National Institute of Plant Management. 27 - 32 5. Test Report No. NRI/2014/5/430 dated May 15, 2014 of the National Research Centre for Grapes of the Indian Council of Agricultural Research, Pune. 33 - 47 6. Test Report No. PFT/Analysis/14- 15/21 dated August 28, 2014 of the Institute of Pesticide Formulation Technology (IPFT). 48 7. Test Report No. 4/7 dated November 19, 2014 of the Plant Pathology of the Indian Agricultural Research Institute, New Delhi 49 - 50 we find that the certificate of ana....
X X X X Extracts X X X X
X X X X Extracts X X X X
....zer Control Order are not relevant for deciding classification under the Central Excise Tariff." [emphasis supplied] In view of the foregoing, neither the averment nor the reliance on the aforementioned judgement is tenable. We also find that the above view of the Board is approved by the Tribunal in the following cases:- (a) Rupali Chemicals Vs CCE, Jaipur - [2017 (6) G.S.T.L. 161 (Tri. - Del.)] 4. The learned Counsel pleaded that they are covered by Fertilizer Control Order and also in their clearance invoices they are naming the product as fertilizer. We find these facts are not relevant to decide the classification under Central Excise Tariff, which should be in terms of the wordings of Tariff entries read with relevant chapter notes. As already explained above Magnesium Sulphate being a defined inorganic chemical not having any fertilizing element, is correctly classifiable under Chapter 28. (b) Sree Ramcides Chemicals P. Ltd. Vs CCE, Tiruchirapalli - [2016 (337) E.L.T. 412 (Tri. - Chennai)] 17. As far as the second criteria is concerned, goods are used as fertilizer spray on the folioge, which is not in dispute. As per the definition ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ulator are discovered and are currently used by the farmer for increasing their yield/quality of their produce. This fact is forthcoming from Sr. No. (iv) of the comments of ICAR -Indian Agricultural Research Institute, appended with circular No. 1022/10/2016-Cx dated 6.4.2016, which is reproduced below for ease of reference viz: iv) Kindly give examples of Plant Micro Nutrients and Plant Growth Regulators naturally found. Kindly also give examples of Plant Growth Regulators and Plant Growth Hormones which are produced industrially and sold in the market, Micro Nutrients: Iron (Fe), manganese (Mn), zinc (Zn), copper (Cu), boron (B), molybdenum (Mo), nickel (Ni) and chlorine (CI) 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 growth substances that have phytohormonal-like regulatory roles (polyamines, oligosaccharins, salicylates, jasmonates, sterols, brassinosteroids, dehydr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll be final and that cannot be changed/questioned at the consignee's end. Therefore, 'Guide Car' shall be treated and/or considered as classifiable under Chapter sub-heading 8603.00 of the tariff. 9. Considering the process and the manner in which and/or for the purpose for which the 'Guide Car' is used, by no stretch of imagination, it can be said to be a 'component' of Coke Oven Battery. It cannot be said that without the 'Guide Car' the Coke Oven Battery shall not be functional. The 'Guide Car' is being used for the purpose of transporting the hot coke after it is processed in the Coke Oven Battery. Therefore, 'Guide Car' can be said to be a different equipment distinct from the Coke Oven Battery and cannot be considered to be a part of the Coke Oven Battery. In that view of the matter, the appellant shall not be entitled to the Modvat credit on 'Guide Car' as 'component' and/or part of Coke Oven Battery as claimed by the appellant. The Adjudicating Authority as well as the learned Tribunal have rightly confirmed the demand of Modvat credit availed by the appellant on 'Guide Cars's. We are in complete agreement with the view taken by the Adjudicating Authority as well a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....strued as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton (1951 AC 737 at p. 761), Lord Mac Dermot observed : "The matter cannot, of course, be settled merely by treating the ipsissima vertra of Willes, J as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished judge." 12. In Home Office v. Dorset Yacht Co. [1970 (2) All ER 294] Lord Reid said, "Lord Atkin's speech ......... is not to be treated as if it was a statute definition. It will require qualification in new circumstances." Megarry, J in (1971) 1 WLR 1062 observed: "One must not, of course, construe even a reserved judgment of Russell L.J. as if it were an Act of Parliament." And, in Herrington v. British Railways....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l (Ni) and chlorine (CI) are included in this category. These elements are also called minor or trace elements, but this does not mean that they are less important than macronutrients. Reply received from IARI on the subject, enclosed with the circular, may please be referred for further details. Inputs received from the trade indicates that these micronutrients are sold in the market as 'micronutrient fertilizer' supplying one or more of the eight essential nutrients listed above, namely iron to chlorine. However, in the trade parlance sale of micronutrients as 'micronutrient fertilizers' would not lead to classification thereof under chapter 31 as fertilizers for the purposes of Central Excise Tariff. For classification under chapter 31, at least one of the elements, namely - nitrogen, phosphorus or potassium should be an essential constituent of the fertilizer as per chapter note 6 of chapter 31. 2.2 There is no specific heading in the tariff for classification of micronutrients. However, where the micronutrient is a separate chemically defined compound, it will be classifiable under the heading for that chemically defined compound under chapter 28 or chapter 29. For ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rs consisting of two or three of the fertilizing 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 th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rmining 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, depending upon its composition." Again, ongoing through the analytical composition, we find that neither Nitrogen, Phosphorus or Potassium is the essential constituent giving character to the product Rapigro. 35. We find that the applicant has also attached the Rapigro Liquid Technical Literature. The introduction states the following viz • that it is a stable, balanced, systemic & biologically active liquid concentrate consisting of proteins, protein hydrolysates, amino acids, organic acids and short chain peptides; • it is derived biologically through the process of fermentation and selection of certain products obtained through the fermentation process • certain cellular products are present in the concentrate; • it produces certain complex proteins to initiate germination, physiological diff....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ible with most of agrochemicals, user friendly and environmentally non-toxic 37. A further reading of the technical bulletin of Rapigro states the following viz "Rate of application - 2 ml/lt water or 200 ml/acre." 38. We understand that both fertilizer and plant growth regulator are different. While a 'fertilizer' promotes growth of the plant, a 'plant growth regulator' on the other hand also stimulates plant growth. The plant growth regulator in-fact promotes/inhibits the growth by affecting the structure at the physiological level. Whereas fertilizers provide nutrients, - the plant growth regulator is an organic component which when applied in low concentration promotes, inhibits or qualitatively modifies plant growth. Plant growth regulator further helps plants in making efficient use of the nutrients for their growth. Plant growth regulators are classified under CETH 38.08 alongside other insecticides, fungicides, herbicides and disinfectants. In-fact plant growth regulator are even considered as pesticides in some parts of the world. It is in this background, that on a conjoint reading of the technical bulletin, characteristics, ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....utrients" and availing SSI exemption. Pursuant to audit, it emerged that the appellants were also engaged in manufacture of Chelated Zinc as 12%, Chelated Iron as 12% Fe, mixture of Chelated substance. It emerged that appellants are manufacturing the said products under nil rate of duty vide Notification No. 4/2006-CE dated 1.3.2006 classifying the same under Central Excise Tariff Heading 3105 as "other fertilizers". Department took a view that the products would appropriately fall as 'Plant Growth Regulators' under CETA 3808 9340. Proceedings initiated by issue of a show cause notice culminated in an order dated 20.11.2013 by adjudicating authority inter alia holding that the goods are classifiable only as 'Plant Growth Regulators' under CETA 38089340, confirming the differential duty of Rs. 14,95,381/-, along with interest thereon and imposition of equal penalty under section 11AC of Central Excise Act, 1944. In appeal, Commissioner (Appeals) vide impugned order dated 26.12.2014 upheld the orders of the original authority. Hence the appellants before this Tribunal 8.5........... From the data on plant growth regulators submitted by the appellant, we find that at least in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e impugned products definitely do contain more than one of the essential nutrients listed in the circular, they have also contain recognisable percentage of nitrogen. This being so, the disputed items are certainly micronutrients. In view of presence of nitrogen, and also considering that they are mixtures and not separate chemically defined compounds, the said goods would therefore come under the ambit of micronutrient fertilisers and will then required to be classified as in "other fertilisers" in CETH 31.05. The appellant, after extensively quoting from the judgement of the Hon'ble Tribunal, has not stated how this is applicable specifically to their case, more so since the judgement relies on the circular dated 6.4.2016, which was also relied upon by the GAAR in its impugned ruling. It appears that the appellant wants to rely on the analytical composition of CPH liquid provided by M/s Sowbhagya Biotech (P) Ltd. (their supplier), which is reproduced below :- Analytical Composition S. No. PARAMETERS SPECIFICATIONS 01 Description Brown Colour liquid 02 pH (As Such) 2.0+/-0.5 03 pH (0.4% aqueous Solution) 6.0+0.5 04 Specific Gravity (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o look at these definitions to have an idea as to how authorities concerned with a particular industry have viewed the subject. However, consequent to the aforementioned judgements, CBIC vide its circular dated 6.4.2016, has in paragraph 4.2 stated that "it may also be noted that notifications issued under the Fertilizer Control Order are not relevant for deciding classification under Central Excise Tariff." Now, the mention of the term Central Excise Tariff, would not make much difference as the Hon'ble SC in the case of M/s. Thermax Ltd [2022 (382) ELT 442 (SC)], held as under: "6. The definition of a product given in the HSN should be given due weightage in the classification of a product for the purpose of levying excise duty. This is because in the Statement of Objects and Reasons of the Bill leading to enactment of Central Excise Tariff Act, 1985, it was clearly stated that the pattern of tariff classification is broadly based on the system of classification derived from the International Convention on the Harmonised Commodity Description and Coding System (Harmonised System) with such contraction or modification thereto as are necessary, to fall wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uj) & Criyagen Agri & Biotech Private Limited-[2023 (74) GSTL 241 (AAAR -Kar). In terms of Section 103 of the CGST Act, 2017, the advance ruling pronounced by the Appellate Authority is only binding on the applicant and the jurisdictional officer. The reliance therefore on these two appellate rulings are not legally tenable. d) Northern Minerals Limited-[2001 (131) ELT 355 (Tri.)] & Northern Minerals-[2003 (156) ELT A161 (SC)] The judgement of the Hon'ble Tribunal, upheld by the Hon'ble Supreme Court, lays down the principle that a PGP [plant growth promoter] will only promote growth of plant and will not inhibit it; that on the other hand, a PGR can inhibit, promote or otherwise alter physiological process in plants. We find that the impugned ruling of GAAR dated 30.6.2023, has followed the aforementioned principle, which incidentally also finds a mention in the circular dated 6.4.2016. e) Safex Chemicals India Limited - [2017 (7) GSTL 234 (Tri.)] In this case, the Tribunal decided the classification based on the chemical report. In the present dispute, though test reports are annexed during the course of personal hear....