TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 382
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....nd holding it to be classified under CTI 2922 4990. 2. Relevant facts are that the Appellant is engaged in the manufacture and sale of fertilizers. In the course of its business, the Appellant imported good declared as 'Zinc EDTA' ("subject goods") vide Bills of Entry filed in the year 2010. The appellant states that the subject goods are chelated micronutrient fertilizers containing Zinc in a form which can be easily absorbed by plants. During the period of dispute, the appellant procured the subject goods from two suppliers viz. M/s. Akzo Nobel, Netherlands and M/s. RNZ DMCC, Dubai (Chinese Origin). At the time of import, the Appellant classified the subject goods under CTI 3105 9090 as "other fertilizers". However, based on investigations by Directorate of Revenue Intelligence, Chennai, the Department took the view that the said goods being an organo-metallic complex compound (a coordination compound) consisting of acyclic amino acids and a zinc complex in conjunction with a di-sodium salt, merits classification under Tariff Item No. 2922 4990 of the Customs Tariff Act, 1975 as "salts of Amino acids.". 3. Accordingly, Show Cause Notice dated 17.08.2010 in F. No. VIII/26/22....
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..... Commissioner of Customs (Appeals) who then directed a pre deposit and subsequently dismissed the appeal for not depositing the pre-deposit directed. The appellant had preferred an appeal against the said dismissal before this Tribunal and consequent to an order, the matter was decided by the Ld. Commissioner of Customs (Appeals) without insisting on pre-deposit, and has culminated in the impugned Order in Appeal C.Cus II No.317/2014 dated 24.12.2014 rejecting the appeal preferred by the Appellant holding that the said goods merit classification under customs tariff heading 2922 and more suitably under the subheading 29224990 as against customs tariff heading 31059090 as claimed by the appellant. 8. The Ld. Commissioner of Customs (Appeals), vide the impugned Order in Appeal dated 24.12.2014, found that: a) In the instant case, the subject goods are separate chemically defined compounds which merit classification under the CTH 2922 and the HSN Explanatory Notes which defines the exclusion clause to CTH 3105 also confirms the same. b) Further, the small amount of nitrogen present in the subject goods is insignificant for any purpose whatsoever and therefore the....
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....ng Zinc in a form which can be easily absorbed by plants. The said goods are commonly used to overcome the Zinc deficiency in crops, improve their growth and yield, and enhance the overall plant health. The subject goods have both soil and foliar applications, in other words, they can either be mixed with the soil or can be sprayed on the standing crops. b) The issue of classification of the subject goods is no longer res integra as the issue has been conclusively settled vide decisions passed by various tribunals in multiple cases, including the Appellant's own case. The classification of the subject goods was held to be under CTI 3105 9090 in CC v. Coromandel Fertilizers Ltd. [2023 (12) TMI 191] passed by the Hon'ble Hyderabad Tribunal in Appellant's own case. c) It is a well settled position of law that an earlier order on the same issue is required to be followed in the absence of any challenge or any variance in the circumstances. Reliance in this regard is placed on the following judgments. a) Birla Corporation Ltd. V. CCE, 2005 (186) E.L.T. 266 (S.C.), b) CCE v. Bigen Industries Ltd., 2006 (197) E.L.T. 305 (S.C.) c) Indian Oil Cor....
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.... chapter in tablets or similar forms or in packages of a gross weight not exceeding 10 kg CTH 2922: Amino-acids, other than those containing more than one kind of oxygen function, and their esters; salts thereof: i) As per Note 6 to Chapter 31, the term "other fertilizers" under CTH 3105 applies only to products of a kind used as fertilizers and containing, as an essential constituent, at least one of the fertilizing elements nitrogen, phosphorus or potassium. The note does not specify the minimum content of the fertilizing element to be present to make it an essential constituent. EDTA Zinc is used as fertilizer and contains Nitrogen which is one of the essential fertilizing elements and therefore, the Appellant classified the same as fertilizer under CTI 3105 9090. j) The subject goods are not classifiable under CTI 29224990 as held in the impugned orders. That as per Note 1(a) to Chapter 29, inter alia, the said chapter only covers separate chemically defined organic compounds, whether or not containing impurities. Further, the HSN Explanatory Notes to Chapter 29 clarify that a separate chemically defined compound consists of one molecular species with....
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....er submitted to Dr. K. Vidyasagar and therefore, the opinion issued by Dr. K. Vidyasagar is not applicable to the present case. n) That at no point in time did the Department conduct any chemical test to determine the actual constituents of the product under dispute. Therefore, the Department has not discharged its burden in the present case. o) Without prejudice to the above submissions, even if it is assumed, not admitted, that the subject goods are classifiable under both disputed headings i.e., CTH 3105 and CTH 2922, the subject goods would still merit classification under CTH 3105 by virtue of General Rules of Interpretation Rule 3(c) as the same mandates classification under the heading that occurs last in numerical order when among the headings which equally merit consideration. p) In the present case, a substantial portion of the entire demand pertains to the differential additional duties i.e., Counter Vailing Duty (CVD) and Special Additional Duty (SAD). Out of the total demand in both the Appeals put together to the tune of Rs. 47,42,918, the demand pertaining to Rs. 39,09,863 pertains to CVD and SAD. That it is a well settled position of law t....
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....ce and a new, distinct compound is created which as distinct physical and chemical properties. It would require a complex chemical or enzymatic process to get Nitrogen released from the molecule and this is not the intent for using Zn EDTA for soil. The primary function of EDTA is to chelate, making it more accessible to plants and improving their ability to absorb other essential nutrients. While Zn-EDTA is primarily used to deliver Zinc to plants, the release of nitrogen from the EDTA molecule is only a subsidiary, unintended effect of microbial activity. The Nitrogen in Zn-EDTA is insignificant and is not the main purpose of using ZnEDTA. The Nitrogen in Zn-EDTA is only because of its chemical composition and not a primary source of Nitrogen for soil. e) that the classification of goods as fertilizers under the Customs Tariff is different from the nomenclature under the Fertilizer Control Order. For the purposes of levy of Customs duty, only the Customs Tariff is the legal authority. He submits that the impugned orders merit to be upheld. 14. The Ld. Counsel for the Appellant distinguished the applicability of the decision in Meghmani Organics Ltd. vs CCE Ahmedaba....
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....tic Acid Di-Sodium Iron complex and Zinc complex, respectively. The decision in Meghmani Organics was primarily based on multiple rounds of chemical examinations and testing, where actual samples of the products were analysed for its constituent materials and chemical structure. h. In the tests conducted by the Department, it was specifically stated in the test report that products in dispute were 'coordination compounds'. While in the case of Meghmani Organics, the Department produced chemical examination reports of the sample products to substantiate that the same were coordination compounds. However, in the present case, no such sample testing/chemical examination of the actual product was conducted by the Department. Instead, the Department sought expert opinion based on the publicly available information on the internet. It is a well settled position of law that the burden of proof lies on the Department to substantiate the re-classification. i. Further, in the case of Meghmani Organics, as noted in paragraph 2.2 of the order, the presence of nitrogen itself was under dispute. In fact, the retest report issued by the Director (Revenue Laboratories), Central R....
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....h i.e., M/s. Meghmani Organics Ltd. (supra) relied upon by the Ld. Assistant Commissioner, the Ld. Bench has distinguished the order in M/s. CIBA India Ltd. (supra), but however, we find at the threshold that the reclassification attempted by the original authority deserves to be set aside since what was proposed in the Show Cause Notice was under a different CTH, but what was confirmed in the Order-in-Original is under a totally different CTH. This approach of the original authority is not proper and correct since, very clearly, the principles of natural justice have been violated. Hence, we do not get into the other aspects even though we find that the ratio of the order in M/s. CIBA India Ltd. (supra) is more or less identical. 15. Heard both sides and perused the appeal records and the citations submitted. 16. The solitary question which arises for consideration in the instant appeals is whether the classification of the Zinc-EDTA under Customs Tariff Item 3105 0000 adopted by the appellant while importing the same is tenable or is it to be classified under CTI 2922 4990 as held in the impugned orders. 17. We find that in so far as the SCN A is concerned, the goods the....
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....ntention of the appellant that HSN explanatory notes to Chapter 29 clearly state that separately chemically defined compounds containing other substances deliberately added during or after their manufacture are excluded from Chapter 29 and further that since there has been a deliberate addition of Zinc and Nitrogen, the subject goods viz. EDTA Zinc 12% stand excluded from chapter 29 and merit classification under CTI 31059090. 19. In this context, we are of the view that the single line opinion of Dr. K. Vidyasagar, Department of Chemistry, relied upon by the Department, have been rightly discredited by the appellant contending that the constituents of the subject goods or the manufacturing process of the subject goods were never submitted to Dr. K. Vidyasagar and therefore, the opinion issued by Dr. K. Vidyasagar is not applicable to the present case. It is also seen from the letter of DRI that the opinion has been sought on inputs provided by DRI as downloaded from the Internet and not on the basis of any test results of the imported goods. Further, the reliance placed by the appellate authority in the OIA 317/2014 dated 24.12.2014 on the observations of Deputy Director, RFCL ....
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....nc EDTA imported by the appellant classifiable under CTI 31059090. The Relevant portions are as under: "11. We have perused the provisions under Chapter 29 & Chapter 31. Note 1 to Chapter 29 provides for inclusion of separate chemically defined organic compound, whether or not containing impurities, whereas, Chapter 31 provides for exclusion of separate chemically defined compounds (other than those answering to the descriptions in Note 2(a), 3(a), 4(a) or 5 below). Therefore, the first issue to be decided is whether the product in question can be considered as separate chemically defined compound as Revenue is arguing or otherwise. From the manufacturing process, as well as expert opinion, it is apparent that Nitrogen is added deliberately in the process simultaneously, along with Zinc Oxide, as also EDTA acid. Therefore, Nitrogen is not an in situ development rather it is part of the manufacturing process and Nitrogen remains in the product even after the reaction is over, as confirmed by the test report of the final product. Therefore, even if it is a micronutrient or plant growth regulator essential for providing Zn, since it also contains fertilizing element i.e., Nit....
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....2% under CTH 3105 9090. Accordingly, we find no merit in interfering with the Impugned Order. 15. Appeal is dismissed." 23. Indisputably, while in the present case it is the contention of the Department that the presence of small quantity of nitrogen in the subject goods is incidental and does not make it a primary source of nitrogen, the fact remains that the presence of nitrogen is uncontested. Further, as per Note 6 to Chapter 31, for the purposes of CTH 3105, the term "other fertilizers" applies only to products of a kind used as fertilizers and containing, as an essential constituent, at least one of the fertilizing elements nitrogen, phosphorus, or potassium. The said chapter note does not specify the minimum content of the fertilizing element to be present to make it an essential constituent. Therefore, when we find that a coordinate bench of this Tribunal, in the said decision, has held that it cannot be said that Nitrogen is not an essential constituent in the product, by virtue of its presence in the product and gone on to uphold the classification of Zinc EDTA that was imported by the appellant under CTI 31059090, we find no reason to take a different view. Y....
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.... not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws. xxxx 8. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assessee-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in future and utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them." (emphasis supplied) 25. It is seen that the need to follow judicial discipline in adjudication proceedings has been impressed upon t....
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....nce of the aforesaid binding law laid down by the Highest Court as well as administrative instructions, the scant disregard shown by the appellate authority to the binding decision of the Tribunal relied upon by the appellant, is deprecated. 26. Furthermore, the Appeal records reflect that the appellant has filed a letter received in reply to information sought under RTI Act, 2005, which states that the Final Order No.A/30403/2023 dated 01.11.2023 passed by the Hon'ble CESTAT, Hyderabad in Customs Appeal No.1337 of 2012 has been accepted in review by the competent authority on merits and no further appeal was contemplated. The Revenue has not brought anything contrary to our notice. Thus, the aforesaid order of a coordinate bench of this Tribunal, reported in CC v. Coromandel Fertilizers Ltd, 2023 (12)TMI 191 -CESTAT HYDERBAD in the appellant's own case pertaining to the import of Zinc-EDTA, has attained finality. 27. Such being the case, we find the reliance placed by the appellant on the decision of the Hon'ble Supreme Court in CCE, Mumbai v Bigen Industries Ltd, 2006 (197) ELT 305 (SC), apposite. The relevant observations are as under: " ....This apart, the earlie....