M/S. RANADEY MICRONUTRIENTS ETC. versus COLLECTOR OF CENTRAL EXCISE

Citation: [1996] SUPP. 5 S.C.R. 755 · Decided: 10-09-1996 · Supreme Court of India · Bench: S.P. BHARUCHA, K. VENKATASWAMI · Disposal: Appeal(s) allowed

Judgment (excerpt)

MIS. RANADEY MICRONUTRIENTS ETC. 
A 
v. 
COLLECTOR OF CENTRAL EXCISE 
""-' 
SEPTEMBER 10, 1996 
'"' 
(S.P. BHARUCHA AND K. VENKATASWAMI, JJ.] 
B 
Central Excise Ac~ 1944-Central Excise Tariff-Heading 31.05 ''fer-
tilisers"-38.08 "plant growth regulators" 38.2:T-"residual products of chemical 
or allied industlies, not elsewhere specified"-Circulars issued by the Central 
Board of Excise and customs-Micronutrients-Classified under 38.08--0n c 
appeal held duty could be levied u11der 31. 05 after the later circula,-.../f later 
circular contrary to statute it must be withdrawn-Wlzile it remains in operation 
Revenue is bound by it-lt does not lie in the mouth of Revenue to repudiate 
a circular issued by the Board on the basis that it is inconsistelll with a 
statutory provision. 
D 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5404 of 
1993 Etc. 
From the Judgment and Order dated 13.5.93 of the Customs 
Excise and Gold (Central) Appellate Tribunal, New Delhi in Appeal E 
No. E/25/91-C, Order No. 179 of 1993-C. 
A. Hidayatullah Joseph Vellapalli, C.A. Sundram, A. Sheerazi and 
Mukul Mudgal for the Appellants. 
M. Gaurishanker Murthy, V.K. Verma and A.K. Srivastava for the F 
Respondent. 
The following Order of the Court was delivered : 
These appeals concern the classification of micronutrients for the 
purposes of Excise duty. Micronutrients are mixtures of soluble salts of G 
... 
elements like calcium, magnesium, manganese, zinc iron, copper, boron 
and molybdenum. They are mixed in stated percentages to get a formulated 
product which assists the growth of plants. The appellants manufacture 
micronutrients. 
Thefacts being similar, we set out those of one of the two appeals. H 
755 
756 
SUPREME COURT REPORTS [1996) SUPP. 5 S.C.R. 
A 
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 not "plant growth 
regulators". However, on 6th November, 1989, the Collector of Central 
-
Excise issued to the appellants (in Civil Appeal No. 5404 of 1983) a notice 
.-· 
B to show cause why the micronutrients made by them should not be clas-
sified as "plant growth regulators" under heading 38.08.90. The show-cause 
notice related to the period 1st April, 1986, to 23rd September, 1989. The 
appellants showed cause and led evidence at the personal hearing before 
the Collector on 6th December, 1989. On 11th December, 1989, an Adden-
dum was issued to the show-cause notice dated 6th November, 1989, which 
c required the appellants to show cause why their micronutrients should not 
be classified undc::r heading 38.23 as "residual products of chemical or allied 
industries, not elsewhere specified". On 22nd February, 1990, a Corrigen-
dum issued to the show-cause notice aforementioned which sought to 
classify the micronutrients under heading 38.23 as "chemical products and 
D preparations of the chemical or allied industries (including those consisting 
of mixture of natural products) not elsewhere specified". On 14th April, 
1990, the appellants showed cause. 
... 
On 20th June, 1990, a circular (now called "the earlier circular") was 
E 
iss!led by the Central Board of Excise and Customs (now called "the 
Board"), addressed to all Collectors of Central Excise, on the subject of 
the classification of micronutrients for the purposes of Central Excise. 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 "fertilisers" or under heading 38.08 as "plant growth regulators". 
F The matter had been examined in consultation with the Deputy Chief 
Chemist who had opined that hearding 31.05 covered only those com-
pounds in which one of the elements was nitrogen or phosphorous or 
potassium. Since micronutrients did not contain these, micronutrients did 
not merit classification as fertilisers under heading 31.05. The opinion of 
G 
the Deputy Chief Chemist was that micronutrients contained other ele-
ments which made them classifiable as "plant growth regulators". "In view 
... 
of the above", the earlier circular stated, "it is clarified that the appropriate 
classification of the product 'plant growth regulator' would be under 
heading 38.08 of CET". The earlier circular required the Collectors of 
Central Excise to bring the clarification it contained to the notice of the 
H lower field fo

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