The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), CESTAT quashed order rejecting lower rate of duty on breach of Section 9D of Central Excise Act, 1944.
The issue in dispute is the classification of forty items manufactured and clearedby appellant, M/s DhartiAgro Chemicals Pvt Ltd of which thirty one were held to conform to descriptions corresponding to tariff items of Schedule to Central Excise Tariff Act, 1985 thereby denying them the lower rate of duty prescribed for heading no. 3105 corresponding to ‘other fertilisers’ in Schedule to Central Excise Tariff Act, 1985.
Four other productswere being cleared at rates of duty prescribed for tariff items of Schedule to Central Excise Tariff Act, 1985. Consequently, differential duty liability of Rs 18 crores was sought to be fastened on the appellant herein under section 11A of Central Excise Act, 1944 along with applicable interest under section 11AA of Central Excise Act, 1944.
The Counsel for the appellant submitted that the circular, relied upon by the adjudicating authority, has since been rendered inapplicable by the decision of the High Court of Bombay, disposing off the writ petition. He further contends that the employee, General Manager, a chemical engineering graduate, had not been examined in accordance with section 9D of Central Excise Act, 1944.
The Counsel further argued that the statement of the employee could not be taken at face value as the denial of deployment of nitrogen, phosphorous or potassium in the impugned goods is contradicted by the test reports.
The Authorised Representative submitted that the High Court of Bombay, in disposing off the writ petition of the appellant herein, had directed that expert opinion be solicited and inherent in reliance on the statement of the employee is the mandate to the adjudicating authority and further contends that the impugned goods contain only trace of the fertilizer which renders those to be ‘plant growth regulator as evident from the statement of their own employee.
A Coram consisting of C J Mathew, Technical Member and Ajay Sharma, Judicial Member observed that “Section 9D of Central Excise Act, 1944 appears to have been observed in its breach and must be remedied. To enable that, we set aside the impugned order and remand the matter back to the original authority for subjecting the statement of the employee, considered to be of particular relevance in determining the outcome of the impugned order, to the prescriptive mandate of section 9D of Central Excise Act, 1944.”
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