Order Date: 15 September 2022

Facts-

•  The Appellant, KPR fertilizer limited manufactures micronutrients for plants and has classified them under Chapter heading 3105 of Central Excise Tariff Act, 1985. A show cause notice dated 14.03.2011 was issued to the appellant covering the period 2007-08 to 20010-11 proposing to classify the micronutrients manufactured by the appellant as plant growth regulators under Chapter heading 38089304 of Schedule to the Central Excise Tariff Act.
• Consequently recover the differential duty of Rs.1, 23, 49,088/- under provision to section 11A(1) of Central Excise Act along with interest under section 11AB. It was further proposed to impose a penalty on them under section 11AC and under Rule 25 of the Central Excise Rules, 2002. 
• The appellant contested the proposal before the Commissioner both on merits and on limitation. After following due process, the learned Commissioner has passed the impugned order. Hence this appeal is filed by the appellant.

Issue-

• Whether the impugned order upholding such classification and demanding differential duty is sustainable?

Order-

• The Tribunal observed that clearly, macronutrients, micronutrients and plant growth regulators are these three distinctly known to agricultural experts, as known in the market and as clarified by the CBEC. The show cause notice proposed to classify the micronutrients manufactured by the appellant as plant growth regulators. Learned Authorized Representative for the Revenue also admits that such classification is not sustainable. Therefore, the impugned order upholding such classification and demanding differential duty cannot be sustained and needs to be set aside.
• Nothing is found in the Chapter note 6 to Chapter 31 which says that Nitrogen, Phosphorus & Potassium cannot be part of chelating agents or the chelating agents are not essential ingredients. There is no reason to go merely by the assertion of the learned Authorized Representative in this regard. Since one of these elements is available, the classification of the goods under Chapter heading 3105 is clearly sustainable. The alternative classification as plant growth regulators is not sustainable.
• The impugned order is set aside and the appeal is allowed with consequential relief.