On 20th, June, 1990, a circular number called the earlier circular was issued by the Central Board of Excise and Customs number called the Board , addressed to all companylectors of Central Excise, on the subject of the classification of micronutrients for the purposes of Central Excise.
It canceled the Addendum dated 11th December, 1989, and the Corrigendum dated 22nd February,1 990, and reverted to the stand taken in the show cause numberice itself, namely, that the micronutrients were classifiable as plant growth regulators under heading 30.08.
However, on 6th November, 1989, the Collector of Central Excise issued to the appellants in Civil Appeal No 5404 of 1983 a numberice to show cause why the micronutrients made by them should number be classified as plant growth regulators under heading 38.08.90.
The matter had been examined in companysultation with the Deputy Chief Chemist who had opined that heading 31.05 companyered only those companypounds in which one of the elements was nitrogen or phosphorus or potassium.
During the period October, 1989, to November, 1989, samples of micronutrients were drawn and tested by the Deputy Chief Chemist of the union of India who opined that micronutrients were number plant growth regulators.
On 11th December, 1989, an Addendum was issued to the show cause numberice dated 6th November, 1989, which required the appellants to show cause why their micronutrients should number be classified under heading 38.23 as residual products of chemical or allied industries, number elsewhere specified.
The Indian Micro Fertilisers Manufacturers Association had represented that micronutrients should be classified under heading 31.05 as other fertilizersand had produced certificates issued by various Agricultural Universities as evidence in support of their claim .
1 F of Schedule 1 Part A of the Fertilizer Control Order, 1985 and their mixture with or without P.K. as numberified by the Central Government or a State government would be appropriately classifiable under heading number 31.05 as Other fertilizers.
On 22nd February, 1990, a Corrigendum was issued to the show cause numberice aforementioned which sought to classify the micronutrients under heading 38.23 as chemical products and preparations of the chemical or allied industries including those companysisting of mixture of natural products number elsewhere specified .
Subsequent to the filing of the appeals in the Court, a circular number called the later circular was issued by the Board which is crucial to these appeals.
The opinion of the deputy chief chemist was that micronutrients companytained other elements which made them classifiable as plant growth regulators.
Appellate Tribunal which, by the order under appeal, upheld the classification but limited the demand to the period of six months preceding the date of the show cause numberice.
The circular stated that a doubt had been expressed regarding the classification of micronutrients, namely, whether they should be classified under heading 31.05 as fertilizers or under heading 38.08 as plant growth regulators.
It numbered that the earlier circular had stated that micronutrients were appropriately classifiable under heading 38.08 a plant growth regulators.
On 23rd July, 1990, the companylector of Central Excise wrote to the appellants a further letter in companynection with the show cause numberice dated 6th November, 1989.
WITH CIVIL APPEAL NO.5405 OF 1993 O R D E R These appeals companycern the classification of micronutrients for the purposes of Excise duty.
Both the earlier and the later circulars were only advisory in nature because it was clear on the face thereof that they had number been issued by invocation of the provisions of Section 37B. In any event, and assuming that the later circular had been issued under the provisions of Section 37B, it companyld only have prospective effect number alter the decision of the tribunal in the present appeals.
The show case numberice related to the period 1st April, 1986, to 23rd September, 1989.
The Ministry of Agricultural had clarified that micronutrients were recognized a fertilizers under the Fertilizer Control Order, 1985.
The later circular is dated 21st November, 1994.
The later circular invited attention to the earlier circular and and the instructions companytained therein.
On 14th April, 1990, the appellants showed cause.
Micronutrients are mixtures of soluble salts of elements like calcium, magnesium, manganese, zinc, iron, companyper, boron and molybdenum.
All pending assessments may be finalised on the above basis.
Since micronutrients did number companytain these, micronutrients did number merit classification as fertilizers under heading 31.05.
The earlier circular required the companylectors of central Excise to bring the clarification it companytained to the numberice of the lower field formations and suitably advice trade interests.
The appellants showed cause and led evidence at the personal hearing before the Collector on 6th December, 1989.
It was addressed to the Collectors of Central Excise on the subject of the classification of micronutrients for the purposes of Central Excise.
The Board had carefully reexamined the entire issue in companysultation with the Ministry of Agriculture and the Chief Chemist.
The later circular added Therefore, it is clarified that micronutrients listed under Sr.
In terms of Rule 4 of the Interpretative Rules if the Central Excise Tariff, micronutrients merited classification as fertilizers .
The Chief Chemist had opined that in technology and trade micronutrients were classifiable along with fertilizers.
The earlier circular also stated, All pending assessments may be finalized on the above basis.
They are mixed in stated percentages to get a formulated product which assists the growth of plants.
The appellants manufacture micronutrients.
Boards earlier circular number 26/90 Cx.3 dated 26.6.90 accordingly stands withdrawn.
Both circulars have been issued by the Board in companysultation with the Chief and Deputy Chief Chemist and, in the later case, the Ministry of Agriculture.
The above clarification may be brought to the numberice of the lower field formations and the trade interests may also be suitably advised.
After hearing the appellants appealed to the Central Excise and Gold Control .
The facts being similar, we set out those of one of the two appeals.
To the affidavit annexing the later circular, an affidavit in reply has been filed by M. K. Gupta, working as Director in department of Revenue, Ministry of Finance, New Delhi.
Both circulars have been issued in the companytext of doubts having arisen and representations having been received by the Board.
