Indian Kanoon - Search engine for Indian Law

Heading No. Description of Goods 31.01 Animal or vegetable fertilisers, whether or not mixed together or chemically treated; fertilizers produced by the mixing or chemical treatment of animal or vegetable products.

38.08 Insecticides, rodenticides, fungicides, herbicides, anti sprouting products and plant growth regulators, disinfectants and similar products.

4. Ld. Cost Accountant, Shri A.B. Nawal appearing for the assessees submitted that 'plantozyme' had both animal origin and vegetable origin inasmuch as it was manufactured from milk protein and seaweed. Reading out from the assessees' own "Technical Note On Plantozyme", the CA gave an outline of the process of manufacture of the product thus: Milk protein (casein) is hydrolysed with a special culture of bacteria, which process (also termed 'fermentation') yields a mixture of various aminoacids. When the fermentation is over, the bacteria are killed by suitable chemical method and the protein hydrolysate (fermentation extract) is mixed with seaweed extract obtained by extracting seaweed with water under high pressure. This combination of the two extracts is 'plantozyme'. The CA further submitted that, while the amino acids contained in the protein hydrolysate served as building units for synthesis of enzymes (which are proteins) which were necessary for the growth of plants, the proteins and carbohydrates present in the seaweed extract in soluble form worked as readily available food which would help plants overcome any deficiencies of proteins and carbohydrates. He relied on the Chemical Examiner's report to establish that the product contained proteins. 'Plantozyme' provided nutritional support to plants and worked as a plant growth promoter, which required to be classified as bio-fertilizer under TH 31.01. Ld. CA relied on the relevant explanatory notes under HSN heading 31.01. He further submitted that the product was not a plant growth regulator to be classified under TH 38.08 as held by the adjudicating authority inasmuch as it did not fall within the purview of the Insecticides Act, 1968. The cytokinin present in the seaweed extract used in the product was a growth promoter for plants and not a growth regulator as found by the Collector. The CA drew support to this plea from a publication (1995) of the National Institute of Oceanography on 'seaweed biofertilizer'. It was also argued, with reference to the Collector's reasonings on the classification issue, that the manufacturer's advertisement of the product alone was not decisive for its classification under the Tariff. In this connection, ld. CA placed reliance on the Tribunal's decisions in the cases of Jeetstex Engineering Pvt. Ltd. [1999 (109) E.L.T. 976], Classic Rugs Pvt. Ltd. [1998 (103) E.L.T. 322] and Shree Laminating Ltd. [1998 (98) E.L.T. 402]. Ld. CA also invited our attention to how certain other manufacturers described their products (which were similar to the one in question) as also what opinion was given on the nature of such products by the competent authority in the Directorate of Plant Protection, Quarantine & Storage, Ministry of Agriculture, Govt. of India. He, further, drew our attention to the Supreme Court's view on the scope of the term "fertilizer" as expressed in Gujarat State Fertilizers Co. v. C.C.E. [1997 (91) E.L.T. 3 (S.C.)]. He urged for classifying the assessees' product under TH 31.01 and prayed for allowing their appeals and cross-objections. He also pointed out that similar products of other manufacturers were not classified by the Department as plant growth regulators under TH 38.08. In this connection, he referred to 'Biozyme' manufactured by Wock-hardt Ltd., Mumbai.

The above literature appears to be consistent with the method of manufacture as explained by the assessees to the Department. We note that the amino acids are products of hydrolysis of the milk protein (casein); The protein complexes have resulted from the chelation of free protein molecules with the minerals i.e., the metal ions used viz. Cu++, Fe++ etc. These complexes have also been specifically named as Copper proteinate, Iron protein-ate etc. The minimum guaranteed percentages of different metals have also been shown, the total metal (Copper, Iron, Zinc, Manganese) content (minimum guaranteed) being only 1.1%. Two other ingredients named on the product label are auxin precursors and cytokinins. Auxins and cytokinins are growth-promoting hormones contained in seaweeds, according to National Institute of Oceanography. It is pertinent to recollect in this context that seaweed extract was one of the raw materials used by the assessees. Milk protein and seaweeds were the main raw materials used for the manufacture of 'Plantozyme' by the assessees. A culture of bacteria was also employed for the purpose. Therefore, the assessees' claim of having derived the product from natural sources including microbes (bacteria) and ocean plants (seaweeds) cannot be rejected. In other words, the animal and vegetable origin of the product is well-established. The Revenue has not attempted to rebut this fact.

7.5 As already noted, one of the main raw materials used in the manufacture of Plantozyme is seaweeds. The National Institute of Oceanography, in its literature referred to by ld. CA, considers seaweed as a bio-fertilizer. The following is the NIO literature :

Effectiveness of seaweed bio-fertilizer Seaweed bio-fertilizer when used in lower concentrations can increase :

1. Rate of seed germination.

2. Cell size, growth and enhanced rate of cell multiplication.

3. General plant growth.

4. Leaf and fruit size.

5. Resistance to diseases.

6. High yield.

Chemical composition of bio-fertiliser

1. Seaweed bio-fertilizer contains growth promoting hormones like Gibberllins, auxins and cytokinine.

2. Trace metals are very effective to promote growth.

3. Other minerals and vitamins are in plenty.

According to the assessees' 'Technical Note On Plantozyme', it was a seaweed species of the genus "Sargassum" that was used by them and its extract contained proteins and carbohydrates of calorific values of 20.20 and 20.00 cal/g. respectively as per NIO data. The NIO results also showed that such seaweed extract contained various amino acids and trace elements (Iron, Manganese, Copper, Zinc etc). The NIO literature has not been contested before us. We would accept this evidence and hold that the product in question, containing seaweed extract, is a bio-fertilizer.