Minimum Percentage of NPK for Classification Under 'Other Fertilizer' Questioned: CESTAT Remands Appeal [Read Order]
CESTAT allowed an appeal by remand with directions on finding whether the test report is sufficient for determining classification.
![Minimum Percentage of NPK for Classification Under Other Fertilizer Questioned: CESTAT Remands Appeal [Read Order]](https://images.taxscan.in/h-upload/2026/03/03/2127701-minimum-percentage-of-npk-for-classification-other-fertilizer-cestat-.webp "Minimum Percentage of NPK for Classification Under Other Fertilizer Questioned: CESTAT Remands Appeal [Read Order]")
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad, remanded an appeal wherein the minimum percentage of Nitrogen (N), Phosphorous (P) and Potassium (K) for classification as fertiliser under Chapter 31 was questioned. After the search conducted in their factory premises, revenue officials observed that the appellant started manufacturing new soil...
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad, remanded an appeal wherein the minimum percentage of Nitrogen (N), Phosphorous (P) and Potassium (K) for classification as fertiliser under Chapter 31 was questioned.
After the search conducted in their factory premises, revenue officials observed that the appellant started manufacturing new soil conditioner under the brand name ‘Sikko Fast’ and clearing the same as fertilisers by evading Central Excise Duty.
The department issued a Show Cause Notice(SCN) dated 16.03.2018 demanding Central Excise duty of INR 8,63,543/- under proviso to Section 11A along with interest under Section 11AA and penalty under Section 11AC of the Central Excise Act, 1944 read with rule 25(1) of the Central Excise Duty Rules, 2002.
The Assistant Commissioner vide order dated 19.06.2018 confirmed the charges and demand along with interest and imposition of penalty. When appealed, Commissioner (Appeals) vide impugned order dated 13.05.2019 upheld the order of the lower authority and rejected the appeal. The appellant then approached the CESTAT.
The counsel of the appellant argued that all three elements required for classification, Nitrogen (1.1%), Phosphorous (2.4%) and Potassium (2.1%) are present in “Sikko Fast”. The opposing counsel argued that the presence of these elements is very low and cannot be considered as essential constituents to qualify for classification as “other fertilizers”.
Both parties referred to judicial precedents. The tribunal was of the view that there had been an incomplete inquiry and that the low percentage of NPK does not make them essential constituents so as to classify correctly under “other fertilizers”.
The single member bench considered classification of “soil conditioner” as had been done in Narmada Bio-chem Pvt Ltd (2019). The tribunal, via Dr. Ajaya Krishna Vishvesha (Judicial Member), allowed the appeal by remanding it and gave certain detailed directions to the Adjudicating Authority.
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