Customs, Excise and Gold Tribunal - Delhi
Sarabhai M. Chemicals vs Commissioner Of Central Excise on 28 October, 1996
Equivalent citations: 1997(89)ELT540(TRI-DEL)
ORDER A.C.C. Unni, Member (J)
1. The appellants in this case have challenged the Order-in-Original dated 15-3-1990 given by the Additional Collector of Central Excise & Customs, Vadodara ordering them to pay an excise duty amounting to Rs. 23,193.16 on their product 'Cycocel' and imposing a penalty of Rs. 2000/-.
2. The appellants are manufacturers of Chlormequat Chloride (Cycocel) and they held a L-4 licence. They had cleared their product classifying it under the erstwhile Tariff Item 68 claiming exemption under Notification No. 234/82. After 1-3-1986 they had classified their product under Chapter sub-heading 3808.10 of the CETA, 1985. declaring the products as 'pesticides'. On information received by the Department a Show Cause Notice was issued on 18-5-1989 calling upon the appellants to show cause as to why duty of excise should not be demanded from them and penalty imposed for mis-declaring and mis-classifying their products as insecticides /pesticides falling under Chapter sub-heading 3808.10 though the product was chargeable to duty under sub-heading 3808.90. In reply the appellants contended that their product is basically a pesticide, though, the same is also used as plant growth regulator. They claimed that their product belonged to the general group of pesticides, though it is a plant growth regulator. They further contended that their classification had been approved by the Department and the exemption Notification No. 234/82 had not prescribed any condition of end-use as a basis for eligibility for exemption.
3. In the adjudication before the Additional growth regulator and classifiable under Chapter heading 3808.90 and not under 3808.10 (insecticides/ pesticides). On the question of entitlement for exemption under Notification No. 234/82 the Additional Collector held that since their product was something other than insecticides /pesticides (to which the exemption Notification No. 234/82 applies, they were not eligible to the exemption under the said Notification. Additional Collector also held that the appellants had suppressed information in relation to the detailed process of manufacture and actual use of the product in their classification list. Therefore, the appellants could not take shelter of filing of classification lists or RT-12 returns which had been approved.
4. In the appeal before us the appellants have contended that the Show Cause Notice which was issued on 18-5-1989 was time barred as the period for which duty has been claimed relates to the period from April, 1983 and onwards. On the question of suppression of information they claimed that they had disclosed the process of manufacture and had filed the necessary classification list right from the year 1979 onwards and they had also been filing monthly RT-12 returns which had been approved by the proper officer from time to time. In view of this there could not be any question of suppression of information on their part. They have also contended that the Collector has no power to review the classification list which had been finally approved by the excise department, the proper course for the Collector could have been to resort to appeal procedure under Section 35. As regards their product, 'increcel', which is a plant growth regulator, belonged to the general and generic category of pesticides/insecticides. They had also submitted technical literature and affidavits before the Additional Collector which had not been taken into account by the Additional Collector. Even after 1-3-1986 they had classified the product under chapter heading 3808.10 and the said classification list had been duly approved by the proper Central Excise officer attracting nil rate of duty. Chapter heading 3808.20 included insecticides, fungicides, roden-ticides, herbicides, veedicides and pesticides.
5. Ld. DR reiterated the findings of the Additional Collector and pleaded for the dismissal of the appeal.
6. We have considered the submissions made by the ld. DR and have gone through the grounds of appeal filed by the appellants. On the question of time bar we are of the view that the appellants are right in their contention that the Show Cause Notice issued on 18-5-1989 demanding duty for the period from April, 1983 is not sustainable. The Department's contention that the appellants had not given full description of their product and end-use in their classification list and, therefore, there was suppression of information does not appear to be well founded. It is not in dispute that before 1-3-1986 there was no specific item of classification for insecticides/pesticides. The product was allowed to be classified under T.I 68 and their declaration of the goods as pesticides were also approved and the benefits of Notification No. 234/82 had also been allowed. It is well settled that for the purpose of invoking the extended period of 5 years under the provisions of Section 11A suppression of facts has to be established. Having regard to the fact that the appellants had filed classification list regularly it cannot be said that the charge of mis-declaration or mis-classification has been established especially when there is no specific chapter heading or sub-heading for plant growth regulator. On the question whether the product produced by the appellants was classifiable under T.I. 68 before 1-3-1986 and under 3808.90 thereafter instead of 3808.10, we have already held in the case of Northern Mineral (P) Ltd. v. CCE, Final Order No. 486/96-C, dated 24-7-1996 (A. No. E/2248/90-C) that a product generally classifiable as herbicides, fungicides, etc., cannot be classified under 3810.90 when such product contained lesser percentage of pest destroying/fungi destroying chemicals. In the case the product in question had only 4.5% Alpha Nepthyl Acetic Acid (ANA) and 95.5% was water. Further, in Agromore Ltd. v. Collector, -1987 (28) E.L.T. 409 (Tri.), the Tribunal on the basis of its description in condensed chemical Dictionary by G.G. Hawley (pp.236 and 713), held that Ethal Plant Growth Regulator having a chemical composition of 2-chloroethyl phosphoric acid (ethephon, "Ethrel") being a plant growth regulator, that increases the rate of ripening of plants by promoting release of ethylene, stimulated rubber latex formation, ripening of sugarcane and flowe ing agent for pineapple would not qualify to be called as pesticides or insecticides. The said decision had also been followed in CCE v. Paushak Ltd. -1991 (52) E.L.T. 429 (Tri.).
7. In view of the above discussions, we find that the order of the Additional Collector suffers from no infirmity and does not call for any modification or interferance. The impugned order is upheld and the appeal