1994 Supreme(SC) 95

SUPREME COURT OF INDIA
B.P. Jeevan Reddy and B.L. Hansaria, JJ.
Civil Appeal Nos. 4531-32 of 1986
Decided On: 20.01.1994
Madras Fertilizers Ltd. Appellants
Vs.
Assistant Collector of Central Excise, Madras V Division, Madras and Ors. Respondent
Counsel for the Parties
For Appellant/Petitioner/Plaintiff: Uttam Reddy, A.V. Rangam and A. Ranganathan, Advs.
For Respondents/Defendant: Joseph Vellapally, Senior Adv., Ashok K. Srivastava, V.K. Verma and P. Parameswaran, Advs.

Headnote:

Central Excise and Salt Act, 1944 - Indian Tariff Act, 1943 - Section 2A - Central Excise Rules - Rule 8(1),173-B(5) - Manufacture of fertilizers - Government of India issued a Notification Bearing Under Rule 8(1) of Central Excise Rules exempting mixed fertilizers falling Under Item of First Schedule to Central Excise and Salt Act manufactured with aid of power from two or more fertilizers on all of which appropriate amount of duty of excise or as case may be additional duty Under Section 2A of Indian Tariff Act has already been paid from whole of duty of excise leviable thereon - There was an Explanation appended to said Notification but since it is not relevant for present purposes it need not be quoted or referred to - A reading of Notification shows that excise duty was waived in full in respect of mixed fertilisers falling Under item which is manufactured from two or more fertilisers on all of which appropriate amount of duty of excise or as case may be additional duty had already been paid - Question in these appeals is whether mixed fertilisers manufactured and sold by appellant under trade-name Vijay is entitled to benefit of said Notification - Assistant Collector refused benefit of said Notification to appellant on ground that mixed fertilisers manufac-tured by appellant is not a mixture of two or more fertilizers as required by Notification but a mixture of fertilizers and other ingredients - He found that is a combination of urea muriate of potash phosphoric acid ammonia fillers and coating agents - Moreover he ammonium phosphate which goes into composition of N.P.K. is also a well known ferilizer though it is not subjected to levy for practical reasons - On appeal Appellate Collector affirmed Assistant Collectors order observing according to Notification it was only such mixed fertilisers are exempted which are produced by blending mixing or granulating duty-paid fertilisers with any substance wherein such mixtures are produced by physical actions and without chemical reactions - Fertilisers manufactured by appellants are definitely complex fertiLisers which are obtained by chemical reaction - Such complex fertilizers cannot therefore be considered as simple mixtures for exemption provided in notification - Appellant challenged correctness of Appellate order by way of revision before Government of India which allowed same and remitted matter for further verification under following order in appeal is based on contention that mixture of two or more fertilisers envisaged in relevant Notification should be by physical action and without chemical reaction and fertilisers manufactured by petitioners are definitely complex fertilizers obtained by chemical reaction and hence they cannot be considered as simple mixtures to attract exemption in Notification - Said Notification does not lay down any such conditions and only requires that mixture can be obtained with aid of power and mixed fertilizers should contain not more than one nutrient - Held, Court may first deal with submission ot counsel for appellant with respect to meaning and effect of order of Government of India - Order deals only with one aspect viz that chemical reaction or transformation if any taking place on mixing of fertilisers is no ground to deny benefit of aforementioned Notification to mixture of fertilizers - Order does not deal with any other condition specified in exemption Notification - It would therefore not be reasonable to read said order as holding finally that fertilizer mixture manufactured by petitioner satisfies all conditions of said Notification - Nor are Court prepared to accede to counsels contention that remitting of matter to lower authorities was confined only to verification of payment of duty on fertilizer going into manufacture of said mixture - Contention of counsel does not even stand to logic - Payment of duty on components is also a condition of Notification just as other condition that mixture to become entitled to benefit of exemption should be a mixture of fertilizers alone - Court do not think that said observations help appellant in any manner - It is not for us to say whether mixture of fertilizers concerned in Coromandal Fertilizers is similar to mixture manufactured by appellant - It is sufficient to say that mixture manufactured by appellant does not satisfy all conditions prescribed by relevant Notification and that unless all conditions are satisfied benefit does not flow - In Coromandal Fertilizers that ammonia is not a fertilizer but falls within purview of gases mentioned under Tariff Item whereas fertilizers fall under Tariff Item - In view of said judgment it can no longer be contended by appellant that ammonia is a fertilizer - Requested that an opportunity may be given to appellant to establish that ammonia is also a fertilizer - Court do not think Court can accede to said request - Show-cause notice issued did expressly put appellant on notice specifically that some of raw materials like ammonia and phosphoric acid are not fertilizers - Final orders stated that said fact more clearly - In any event in view of decision of this Court in Cornmandal it is not open either to appellant or to any authority to say that ammonia is a fertilizer - More so when judgment of this Court is based upon Tariff entries themselves - Appeals Dismissed