Product ‘MIRACULAN’ based on Traicontanol 0.05% EC is an Insecticide and Classifiable as Growth Promoter: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the product ‘Miraculan’ based on Traicontanol 0.05% EC is an insecticide and classifiable as a growth promoter.

Agro Pack, the appellant is engaged in the manufacture of ‘MIRACULAN’ falling under chapter subheading no. 38083040 of CET, 1985 and applying the provision of section 4A of Central Excise Act, 1944 for valuation purposes by taking abatement of 35% on MRP value as per notification no. 02/2006-CE (N.T.) dated 01.03.2006. The said notification was amended by another notification no. 11/2006-CE (NT) dated 29.05.2006 effective from 01.06.2006 which provides the rate of abatement in respect of plant growth regulator falling under CETH 38083040 was reduced from 35% to 30%. The appellant continued to clear their product namely ‘MIRACULAN’ taking abatement at the rate of 35% from their MRP value even after 31.05.2006.

The department has contended that the product literature of the said product ‘MIRACULAN’ is given on the website of M/s. Dow Agro Science, USA reveals that since ‘MIRACULAN’ contains Traicontanol as the active ingredient and the same is used as a plant growth regulator for increasing yield of the agriculture products.

It was further contended by the department that the appellant’s product is solely marked by M/s. Dow Agro Science is a plant growth regulator and since the marketing agency considers the subject product as Plant Growth Regulator, the appellant should have claimed abatement of 30% only from their MRP Value after 01.06.2006.

The Deputy Commissioner confirmed the charges of the show cause notice primarily on the ground that the sample of the product namely ‘MIRACULAN’ was sent for the chemical test to the Chief Chemical Examiner, Central Excise & Customs, Vadodara with a specific query from the department to ascertain as to whether the product is plant growth regulator or plant growth promoter. The chief chemical examiner in its report has confirmed that the sample contains 0.05% Traicontanol and it may be considered as a plant growth regulator.

The Deputy Commissioner rejected the refund claim of the appellant and held that the product under consideration is nothing but a plant growth regulator and not a plant growth promoter. The Commissioner (Appeals) upheld the Order-In-Original.

It was contended by the appellant that they have been classifying their product under chapter subheading no. 38089340 of Central Excise Tariff Act, 1985. It was during the audit of the records by the department that the audit party objected to their classification saying that the product manufactured by them is not a plant growth promoter but a plant growth regulator and therefore, this should be classified under the chapter subheading no. 38083040 of the Central Excise Tariff Act, 1985.

It was observed that since the product ‘MIRACULAN’ is based on Traicontanol 0.05% EC which is nothing but an insecticide as it requires registration under Section 9(3) of the Insecticides Act, 1968 with the Directorate of the Plant Protection, Quarantine and Storage, Faridabad.

A two-member Coram comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) observed that a similar product which contains Traicontanol has been classified as an insecticide and not a plant growth regulator and held that the product ‘MIRACULAN’ which primarily contains Traicontanol 0.05% by weight is a product under the category of Insecticides and cannot be considered as the plant growth regulator.

To Read the full text of the Order CLICK HERE

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