Zinc EDTA Is Fertiliser, Not A Chemical; Lower Customs Duty Applicable: CESTAT Chennai

Ajayan T.V. (Judicial Member) and Ajit Kumar (Technical Member) noted that Zinc EDTA contains Nitrogen, which is an essential fertilising element.

The Tribunal further stated that …….as per Note 6 to Chapter 31, for the purposes of CTH 3105, the term “other fertilisers” applies only to products of a kind used as fertilisers and containing, as an essential constituent, at least one of the fertilising elements nitrogen, phosphorus, or potassium……

In this case, the assessee/Appellant is engaged in the manufacture and sale of fertilisers. In the course of its business, the assessee imported goods declared as 'Zinc EDTA' (said goods).

The assessee states that the subject goods are chelated micronutrient fertilisers containing Zinc in a form which can be easily absorbed by plants.

At the time of import, the assessee classified the subject goods under CTI 3105 9090 as “other fertilisers”.

However, the Department took the view that the said goods, being an organo-metallic complex compound (a coordination compound) consisting of acyclic amino acids and a zinc complex in conjunction with a di-sodium salt, merit classification under Tariff Item No. 2922 4990 of the Customs Tariff Act, 1975 as “salts of Amino acids”.

Accordingly, a Show Cause Notice was issued to the assessee proposing reclassification of the subject goods under CTI 2922 4990.

Thereafter, an Order was passed confirming the demand made in the show-cause notice. The assessee filed an appeal before the Commissioner of Customs (Appeals) against the order, which was dismissed.

It was held that the said goods merit classification under customs tariff heading 2922 and, more suitably, under the subheading 29224990, as against customs tariff heading 31059090 as claimed by the assessee.

The issue before the bench was whether the classification of the Zinc-EDTA under Customs Tariff Item 3105 0000 adopted by the assessee while importing the same is tenable, or is it to be classified under CTI 2922 4990 as held in the impugned orders.

The Tribunal noted that it is the contention of the Department that the presence of a small quantity of nitrogen in the subject goods is incidental and does not make it a primary source of nitrogen; the fact remains that the presence of nitrogen is uncontested. Further, as per Note 6 to Chapter 31, for the purposes of CTH 3105, the term “other fertilisers” applies only to products of a kind used as fertilisers and containing, as an essential constituent, at least one of the fertilising elements nitrogen, phosphorus, or potassium. The said chapter note does not specify the minimum content of the fertilising element to be present to make it an essential constituent.

The bench observed that it cannot be said that Nitrogen is not an essential constituent in the product, by virtue of its presence in the product and went on to uphold the classification of Zinc EDTA that was imported by the assessee under CTI 31059090.

In view of the above, the Tribunal allowed the appeal.

Case Title: M/s. Coromandel International Ltd. v. Commissioner of Customs

Case Number: Customs Appeal No. 40440 of 2015

Counsel for Appellant/ Assessee: Rohan Muralidharan

Counsel for Respondent/ Department: Sanjay Kakkar

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