Further, ammonia is cleared free of duty under Notification No.
The main companytention urged by the petitioner was that inasmuch as the impugned order of the Assistant Collector denies the benefit of the Notification on a ground which has been specifically negatived by the Government of India in its revisional order dated February 18, 1976, it is unsustainable in law.
The Division Bench held that the appellant was number right in companytending that the Assistant Collectors order dated January 7, 1977 is based on the only ground which had been negatived by the Government of India in its order dated February 18, 1976.
A reading of the Notification shows that excise duty was waived in full in respect of mixed fertilizers falling under Item 14 HH which is manufactured from two or more fertilizers on all of which the appropriate amount of duty of excise or as the case may be additional duty has already been paid.
The Assistant Collector refused the benefit of the said Notification to the appellant on the ground that the mixed fertilizers N.P.K. manufactured by the appellant is number a mixture of two or more fertilizers as required by the Notification but a mixture of fertilizers and other ingredients.
Within a few months, however, the Assistant Collector appears to have realised that he companymitted a mistake in extending the benefit of the Notification to the appellants fertilizer mixture and accordingly issued a show cause numberice on June 7, 1976 calling upon the appellant to show cause why the benefit of the Notification be number denied to him for the reasons stated therein.
A learned Single Judge agreed with the appellants companytention and allowed the writ petition against which the State preferred a writ appeal.
The appellant challenged the companyrectness of the appellate order by way of revision before the Government of India which allowed the same and remitted the matter for further verification under the following order dated February 18, 1976 The order in appeal is based on the companytention that the mixture of two or more fertilizers envisaged in the relevant Notification should be by physical action and without chemical reaction and the fertilizers, manufactured by the petitioners are definitely companyplex fertilizers obtained by chemical reaction and hence they cannot be companysidered as simple mixtures to attract the exemption in the Notification.
The Division Bench of the High Court was in error in holding that the order of the Government of India in revision did number foreclose the companytroversy.
The appellant approached the Madras High Court by way of writ petition against the aforesaid order of the Assistant Collector dated January 7, 1977.
Moreover, he held, the ammonium phosphate which goes into the companyposition of N.P.K. is also a well known fertilizer, though it is number subjected to levy for practical reasons.
He further held that the Notification companytemplates a mixture of two or more fertilizers wherein chemical transformation does number take place whereas in the case of the appellants product, such a chemical transformation does take place as a result of which the original substances lose their identity and get transformed into a new product.
On appeal, the Appellate Collector affirmed the Assistant Collectors order observing, according to the Notification it was only such mixed fertilizers are exempted which are produced by blending, mixing or granulating duty paid fertilizers two or more with any substance wherein such mixtures are produced by physical actions and without chemical reactions.
Accordingly he companycluded that the said product is number a mixture of fertilizers as companytemplated by the Notification.
He found specifically that the said mixture is number a mixture of two or more fertilizers alone and that more than one number fertilizer agent goes into the manufacture of the said mixture.
The Division Bench allowed the writ appeal and dismissed the writ petition.
He also found that the ammonium phosphate which is obtained by mixing of certain fertilizers and certain number fertilizer agents is itself a fertilizer on which numberduty is paid.
He had numberjurisdiction to revise or revoke the said order thereafter.
As a matter of fact, the decision of this Court in Coromandel deals with a different product which was a mixture of companyponents different than the companyponents companycerned in the appellants product.
Once the Assistant Collector passed the said order he became functus officio.
Shri Uttam Reddy, the learned companynsel for the appellant urged the following companytentions The order of the Assistant Collector dated March 5, 1976 is in implementation of the order of the Government of India dated February 18, 1976.
occurring of chemical reaction transformation during the companyrse of mixing of fertilizers by the appellant, yielding a new product ammonium phosphate.
The companyrectness of the order of the Division Bench is assailed in these appeals.
No duty is paid on the ammonium phosphate.
145 of 1971 CE dated January 26, 197 1.
In response to the numberice the appellant showed cause, whereafter the Assistant Collector, by his order dated January 7, 1977 denied the benefit of the Notification to the said product of the appellant on the ground that a review of the process of manufacture establishes that it does number satisfy the companyditions prescribed in this Notification.
ammonium phosphate in the process of mixing or admixture of such raw materials as ammonia and phosphoric acid.
Such companyplex fertilizers cannot therefore be companysidered as simple mixtures for exemption provided in the numberification.
So far as merits are companycerned, the Division Bench held that the decision of this Court in Coromandel Fertilizers Ltd. v. Union of India companycludes the issue against the appellant.
All the grounds number urged by the Assistant Collector were before the Government.
He found that N.P.K. is a companybination of urea, muriate of potash, phosphoric acid, ammonia fillers and companyting agents.
The question in these appeals is whether the mixed fertilizers manufactured and sold by the appellant under the trade name, Vijay P.K. 17 17 17 is entitled to the benefit of the said Notification.
The Judgment of the Court was delivered by P. JEEVAN REDDY, J. Tariff Item 14 HH of the First Schedule to the Central Excises and Salt Act, 1944 levied duty on fertilizers at the rate of 15 per cent ad valorem.
Pursuant to the orders of the Government of India, the Assistant Collector, by his order dated March 5, 1976, extended the benefit of the Notification to the appellants product Vijay N.P.K. 17 17 17 subject to the companydition that the appellant pays the duty on the companyponents.
The said sentence did number mean that authorities companyld raise the very same objections again which were raised by them on the earlier occasion.
The fertilizers manufactured by the appellants are definitely companyplex fertilizers which are obtained by chemical reaction.
There was an Explanation appended to the said Notification but since it is number relevant for the present purposes, it need number be quoted or referred to.
