CESTAT classifies Siapton 10L and Isabion as Fertilizers under Tariff 3101 00 99 Citing Primary Nutrient-Based Composition [Read Order]

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) classified Siapton 10L and Isabion as fertilizers under Central Excise Tariff Item No. 3101 00 99, citing their primary nutrient-based composition.

The appellant, P I Industries submitted that Siapton 10L and Isabion are classified as fertilizers that contain organic nitrogen, amino acids, and peptides providing nutrients to plants for healthy growth. The company submitted test reports and expert opinions to show that the products do not modify or regulate physiological processes which was an important characteristic of plant growth regulators ( PGRs ).

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The revenue classified the products as plant growth regulators stating that technical documents described them as bio-stimulants that influence plant physiology and growth patterns. The department issued show cause notices claiming the products fell under Tariff Item No. 3808 93 40 which attracts excise duty.

The appellant submitted evidence such as international supplier certifications and the Fertilizer Control Order, 2021, which categorized bio-stimulants as fertilizers and explicitly excluded PGRs.

The Revenue relied on laboratory findings and technical literature to argue that the products influenced physiological processes which align them with PGR characteristics. The department explained that the application method, primarily foliar spray, suggested the products were not conventional fertilizers.

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The appellant approached CESTAT regarding this issue. The two-member bench comprising Judicial Member Ramesh Nair and Technical Member Raju observed that fertilizers supply essential nutrients and PGRs actively regulate physiological processes like growth promotion or inhibition.

The tribunal found that Siapton 10L and Isabion primarily facilitated nutrient uptake and growth without altering plant physiology.

The tribunal held that bio-stimulants were fertilizers under Tariff Item No. 3101 00 99 because they were nutrient providers. It further analyzed the Fertilizer Control Order amendment in 2021, which categorized bio-stimulants as fertilizers.

The Tribunal set aside the excise duty demands under Tariff Item No. 3808 93 40 and ruled that the Revenue’s classification was incorrect. The appellant’s appeals were allowed with granting relief.

To Read the full text of the Order CLICK HERE

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