IMPORTANT POINTS
Brimstone is covered by entry 25.03 and not 38.08.
Packaging of 25 kg. Brimstone is not retail package.

JUDGMENT

S.B. Sinha, J. —

1. Whether “Brimstone 90” which contains about 90% of Sulphur and 10% of Bentonite by way of inert filler would come within the classification under “Heading 25.03” of the Customs Tariff and the Central Excise Tariff or “Heading 38.08” is the question involved in this appeal.

2. Appellant imported 200 MT of “Brimstone 90”. The certificate of analysis available on record shows the Sulphur content of the imported goods was 90.10 % , inert filler (Bentonite) at 9.60 % and, the moisture content was 0.30 %.

3. “Brimstone 90” was classified under the Customs Tariff heading 25.03 by the Customs, Excise and Service Tax Appellate Tribunal in the case of Deepak Fertilsers & Petrochmeicals Corporation Ltd. vs. Commissioner of Customs, Nhava Sheva,1 2002 (139) E.L.T. 328. The Tribunal held :-

“8. Elemental sulphur has wide use as a fertiliser. Elemental sulphur has to be oxidised to sulphate before it can be absorbed by the plant. The rate of oxidisation depends upon the surface area of the sulphur particles. Rapid oxidisation is possible where the particle size is small. The fine particles, however, create handling problems. They can also be blown away by wind. They may float on the irritation to the eyes and lungs. They can also be blown away by wind. They may float on the irrigation water. To enable the sulphur to be applied in a safe manner it is mixed with other fertilisers such as phosphate, etc., or with inert fillers such as bentonite clay. Such mixture is applied to the plants. On application of water bentonite expands and disintegrates the sulphur particles surrounding it. Over the years 10% bentonite in the mixture has been established as appropriate.

9. The addition of bentonite clay does not alter the chemical properties of the sulphur particles. Therefore even in admixture of the bentonite the sulphur does not merit classification under any other tariff entry. The sulphur component of such mixture also continues to fall under the term ‘unrefined sulphur’. Therefore such unrefined sulphur tracing its origin in refinery processing natural gas, etc. of which it is a by-product would continue to merit the title ‘unrefined sulphur’ without or without mixture with bentonite.”

4. Appellant filed the bills of entry on 31st May, 2004 classifying the goods under “Heading 25.03” of the Customs Tariff. However, the Deputy Commissioner of Customs by his order dated 7th July, 2004 opined that the imported goods were classifiable under “Heading 38.08” of the Customs Tariff.

5. Indisputably a Notification bearing No.21/02-Cus., dated 1st March, 2002 had been issued granting benefit of exemption in respect of “crude or unrefined Sulphur” falling under heading 25.03. Consequent upon the said decision of the Deputy Commissioner of Customs dated 7th July, 2004, the benefits of the said exemption notification was not accorded to the appellant.

6. An appeal was preferred thereagainst before the Commissioner (Appeals). The Commissioner (Appeals) by an order dated 20th August, 2004 allowed the same relying on or on the basis of the said decision in Deepak Fertilisers and Petrochemicals Corporation Ltd. (supra).

7. Respondent preferred an appeal thereagainst before the Customs, Excise and Service Tax Appellate Tribunal. A Division Bench of the Tribunal was of the opinion that its earlier decision in Deepak Fertilisers and Petrochemicals Corporation Ltd. (supra) was not correct. It referred the matter to a Larger bench stating :-

“3. We have considered the submissions and the claim under Chapter 3808 canvassed by Revenue. We cannot appreciate that a packaging of 25 kgs. Of the product as imported would be included under Heading 38.08 when we find that Notes under Heading 2503 specifically excludes sulphur put up in forms of packing for reail sale as fungicide etc. which fall in Heading 3808. The sulphur in this case is packed in 25 kgs. Pack and there is no material for us to conclude that this packaging is for retail sale