Cus - Inclusion of imported items in Fertiliser (Control) Order, 1985 cannot but reinforce opinion that these are indeed fertilizers as decided by competent department of Government of India: CESTAT
By TIOL News Service
MUMBAI, SEPT 28, 2016: THE importers procured what they claimed to be 'fertilizers' classified under heading 3105.60 of the CTA, 1975 &heading 3105.00 of the CETA, 1985.
One of the consignments declared as WSS NPK 02:50:34 was subjected to chemical tests and reported to be 'mono potassium phosphate' with purity of 99.6%. The finding of the adjudicating authority was that these goods are separate chemically defined compound classifiable under chapter 28 and hence liable for duty.
The appellant is before the CESTAT and inter alia contends that note 6 of chapter 31 of First Schedule to the Customs Tariff Act, 1975 defines the term 'other fertilisers' to be products used as fertilizer and containing as essential constituent at least one of the fertilizing elements, namely, nitrogen, phosphorous or potassium, which the imported goods conform to; that the adjudicating authority has overlooked the fundamental fact that there is no allegation to the effect that the goods imported are not used as fertilizers and that once it is a fertiliser, classification under chapter 28 is ruled out; that the adjudicating authority failed to take note of the registration certificate issued by the Director of Agriculture of various States, which is mandatory for sale of fertilizer, wherein 'mono potassium phosphate' has been described as a fertilizer in the Fertilizer (Control) Order dated 12th October 1995.
The National Import Data Base data for the period from November 2012 to April 2013 was also furnished to substantiate that the imports of NPK under the heading 31.05 was made at other custom gateways. The invocation of extended period of limitation was also challenged.
The AR sought to place reliance on the Board Circular no. 44/2001-Customs dated 6th August 2001 and the HSN Explanatory Notes to chapter 28 as well as the decision of the Tribunal in Pioneer Agritechoscan - 2007-TIOL-491-CESTAT-MUM to justify the stand taken by the department.
The Bench distinguished the citation relied upon by the AR and observed -
+ The adjudicating Commissioner has not discounted the contentions of the importers that the goods are indeed fertilizers but has decided against the importers on the ground that these are individually chemically compounds which find a specific mention in the Tariff. There can be no doubt that the potassium phosphate finds specific mention in chapter 28…
+ The goods listed in notes 2(A), 3(A), 4(A) or 5 to which note 1(b) [of Chapter 31] refer are intended to restrict the applicability under one or other of headings 31.02, 31.03, 31.04 as applicable. Note 6 of chapter in relation to the residuary category restricts classification under 'other fertiliser' in 31.05 to goods to be used as 'fertilisers' and containing one of the fertilizing elements. In view of the above arrangement of exclusions and inclusions in chapter 31, it would appear that all of the headings preceding 31.05 are to be taken as 'fertiliser' to the extent that these are also used as fertilizer and not excluded by note 1(b).
+ There is no averment in the note or impugned order that the imported goods are not fertilizer. For the above reasons, we find that the classification of the imported goods should fall under chapter 31 and not chapter 28.
+ The inclusion of the imported items in the Fertiliser (Control) Order 1985, as amended in 1995, cannot but reinforce the opinion that these are indeed fertilizers as decided by the competent department of the Government of India.
The appeals were allowed with consequential relief.
(See 2016-TIOL-2548-CESTAT-MUM)
