Supreme Court of India
M/S. DEEPAK AGRO SOLUTION LTD.versusCOMMISSIONER OF CUSTOMS, MAHARASHTRA
- Citation
- 2008 INSC 614
- Decided
- 8 May 2008
- Disposal
- Appeal(s) allowed
- Bench
- S B SINHA
Holding
"Brimstone 90", being crude/unrefined sulphur used as a fertilizer, is classifiable under Customs Tariff Heading 25.03 and not under Heading 38.08.
Summary
M/s Deepak Agro Solution Ltd. imported 200 MT of "Brimstone 90", a product containing about 90 % sulphur and 10 % bentonite, and classified it under Customs Tariff Heading 25.03 (unrefined sulphur). The Deputy Commissioner of Customs re‑classified the goods under Heading 38.08, which deals with insecticides, fungicides, etc., and denied the exemption under Notification No. 21/02‑Cus. The appellant appealed, and the Customs, Excise and Service Tax Appellate Tribunal’s larger bench upheld the 38.08 classification. The Supreme Court examined the wording of Heading 25.03, Chapter Note 1, the manufacturing process, the intended agricultural use, and the nature of the packaging, concluding that the entry is broad and includes crude sulphur used as fertilizer, whereas Heading 38.08 requires goods to be put up in forms for retail sale as pest‑control products. Consequently, the Court held that "Brimstone 90" falls within Heading 25.03 and not 38.08, set aside the Tribunal’s order and allowed the appeal, granting the exemption without costs.
Issues considered
- Whether "Brimstone 90" should be classified under Customs Tariff Heading 25.03 or Heading 38.08.
- Whether the importer is entitled to the exemption under Notification No. 21/02‑Cus. for crude/unrefined sulphur.
Legislation cited
Subjects
customs classificationtariff headingBrimstone 90sulphurChapter 25Chapter 38statutory interpretationagricultural usepackaging
Judgment
[2b08] 7S.C.R1139
· M/S. DEEPAK AGRO SOLUTION LTD. A
. \/.
. COMMISSIONER OF CUSTOMS, MAH~RASHTRA
· (Civil Appeal No. 5210 of 2006)
MAY 8, 2008
B
. (S.B. SINHA AND V.S. SIRPURKAR, JJ.)
Customs Tariff Act - Tariff Heading 25.03 or 3~.0B -
'Brimstone 90' Classification
. of .- Held: Is classifiable under·
· Heading 25. 03 on basis of its manufacturingpiocess, purpose c
for which it is used as also technicalinaterial produce.before
it - Brimstone 90 means crude ·sulphur and is used for.
agricultural purposes - Entry 25.03 cdvers refined but also
unrefined Sulphur, U$ed for different purposes including
. agricultural purposes.~ While Sulphur in tariff entry No:3808
0
~ · is used for insecticides, fungicides, herbicides etc. - It is to be ·
put i.Jp ir; forms or packings for retail sale or as pr¶tions of
attic/es for example sulphurtreated bands etc. which is different
from crude Sulphur or Brimstone 90 - On facts, finding of the
tribunal that 'Brimstone 90' was marketed.by importerin retail ·
bags may not be correct - Thus, order of tribunal that E
'Brimstone 90' was classifiable· under heading 38. OS not
sustainable and set aside.
Interpretation of statutes ....: Fiscal statute - Interpretation
· of Chapter Note - Held: Depends upon the context iri which F
entries have been worded - If its clearly worded and)s of broad ·
nature, it would lead to the conclusion that the context otherv11ise
required - Entry is to be given its ordinary meaning . ;_, If any
goods fit within one entry,· the same for any purpose would not.
be held to be included in the other and in particular the G
residuary.
J By a Notification No.21\02-Cus.,dated 1st March,
2002 benefit of exemption was granted in respect of 'crude
or unrefined Sulpl'"Jr' falling under Heading 25.03. The
1.139 H
1140 SUPREME COURT REPORTS [2008] 7 S.C.R.
A tribunal in Deepak Fertilisers & Petrochemicals Corporation
Ltd. 's case held that the. "Brimstone 90" was classified
under the Customs Tariff Heading 25.03.
· The app~llant-importer of 200 MT of "Brimstone 90"
filed the bills of entry classifying the goods unde.r
B "Heading 25.03" of the Customs Tariff. However, the _.
Deputy Commissioner of Customs held that the goods
were classifiable under "Heading 38.08"of the Customs
Tariff. The benefit of the Notification was not given to the
appellant. Appellant filed appeal which was allowed.
c Aggrieved, respondent, filed appeal. The Division Bench
of the tribunal holding that the decision in Deepak
Fertilisers's case was not correct, referred the matter to
the larger bench. The Larger Bench held that the said
goods were classifiable under Heading 3808.19. Hence
D .the present appeal.
4,
Appellant contended that the Larger Bench of the
Tribunal in arriving at the impugned judgment failed and/or
neglected to consider not only the manufacturing process
of "Brimstone 90" and the purpose for which the same is
E used but also the technical materials produced before it.
Allowing the appeal, the Court
HELD: 1.1 Entry 2503 speaks of Sulphur of all kinds
other than sublimed sulphur, precipitated sulphur and
F colloidal sulphur. Therefore, it is evident that the said entry
is of broad nature. Indisputably the product does not
come within the purview of the excluded category. It is
well settled what is not excluded would be held to be
included. Within the category of Sulphur, Sulphur
G recovered as by-product in the process of refinement of
. crude oil also finds place. (Para 12, 15 and 16) [1147-H,
1148-D,E,F] ~
1.2 Chapter Note 1 of Chapter 25 starts with the words
"except where their ~ontext of Note 4 to this Chapter
H
-· ,.., -·~-
... ·'
MIS. DEEPAK AGRO SOLUTION LTD.· v. COMMNR. 1141
OF CUSTOMS, MAHARASHTRA
otherwise requires''. Therefore; it is difficult to hold that A
the headings of the Chapter would cover only the
. products which are in the crude state or comes within
the purview of other activities contained therein,
Interpretation of the Note will depend upon the context in
.~ which the entries have been worded. If an entry is clearly B
worded and is broad in character, the same would lead to.
the conclusion that the context otherwise required. An
entry is to be given its ordinary meaning. If any goods fit
.in within one entry, the same for any purpose would not.
be held to be included in the other and in particular the c
residuary. (Para 17, 18) [1148-F,G, 1149-A,B]
1.3 "Salt and Sulphur" are dealt with in Chapter 25.
Sulphur may be .used for different purposes including
agricultural purposes. Brimstone 90 is used for agricultural
purposes. The dictionary meaning pt;;.arimstone is 'cru~e D
sulfur'. Sulphur does not find place Jrj Chapter 38 which
deals with agricultural operation.\ln'.all probabilities as
Sulphur is. dealt with in Chapter 25.' The description in· the
tariff entry not only covers refined but also unrefined
Sulphur. (Para 19, 20 and 28) [1149-8,C;D, 1151-E]. E
1.4 Tariff entry No.3808 principally deals with
insecticides, fungicides, herbicides etc. Sulphur which
finds place in the said entry must be used for the purpose
ofinsecticides, fungicides, herbicides etc. The same is to
be put up iri forms or packings for retail sale or as F
preparations of articles. What has been· stated by way of
example is sulphur treated bands, wicks, candles and .fly-
papers and not Sulphur itself. Sulphur treated bands etc.
would be different from crude Sulphur or Brimstone 90.
It is. nobody's case that crude Sulphur is used for the G
said purpose. Orily some bands, candles, fly-papers
etc., which are only Sulphur treated, are used. (Paras 27,
29 and 32) [1151-H, 1152, 1152-A,B, 1152-F]
1.5 The question which sho.uld have been posed by H
1142 SUPREME COURT REPORTS [2008] 7 S.C.R.
•
.
A the Tribunal while differing with the correctness of its
earlier decision was as to whether the product is such
which can be said to be insecticides, fungicides and
herebicides etc. It is also of some significance that the
Revenue was of the opinion that the product would t-
B come within the Entry 3808 30 40 being plant-growth
regulators. The reference was in regard to the
_..
..
'
applicability of Entry 2503 and/or 3808 3040. The Tribunal,
however, made a new case by opining that it would come
within Entry No.3808 90, which is impermissible in law.
''
..!
c (Para 30) [1152-8,C,D]
Saci Allied Products Ltd , U. P vs. Commissioner of
Central Excivse, Meerut. 2005(183) ELT 225(SC) - referred
to.
1.6 Paragraph 2 of the heading 25.03 refers to 'Frasch
D ..._
process' which in:;e\es pumping hot water to get slurry
out. It is not a p , itted process under Note 1. Orny
paragraph 4 refers to the product in question. It is not the
case of the Revenue that clauses 5, 6 and 7 are attracted
to the process which are used in obtaining crude
E
Sulphur.(Para 35) [1154-E,F]
II
1.7 The Tribunal's finding that it was marketed by the
importer in retail bags may not be correct as an .i.
~
agriculturist ordinarily would not purchase a bag
F containing 25 kgs."Brimstone." Therefore, the tribunal
was not correct in its view, the impugned judgment cannot
be sustained and is set aside. (Para 37, 40 and 41) [1155-
C, 1156-F,G]
Deepak Fertilisers & Petrochemicals Corporation Ltd. vs.
G Commissioner of Customs, Nhava Sheva 2002 (139)
E.L.T.328; H.PL. Chemicals Ltd. vs. Commissioner of C Excise
~
Chandigarh 2006 (197) E.L. T.324 (S.C.) - referred to.
Ulmann's Encyclopedia of Industrial Chemistry relating
to sulphur para 9.2.3; Journal Fertilizer Focus, April 1977;
H
;-
M/S. DEEPAK AGRO SOLUTION LTD. v. COMMNR 1143
OF CUSTOMS, MAHARASHTRA [S.B. SINHA, J.]
Physical and Chemical Analysis report dated 11.08.2003 by· A
NEASIS, Damman; Fertilizer Research on Elemental Sulfur
by Kluwer Academic Publishers; Encyclopedia of Chemical
Technology Fourth Edition p. 255 - referred to.
CIVIL APPELLATE JURISDCTION : Civil Appeal No ..
5210 of 2006. B·
From Final Order No. A/535/WZB/06 (C.S.TB) dated
9.6.2006 and against the Misc. Order No. M/85/WZB/06-LB
(CSTB) dated 27.1 :2006 of the Customs. Excise and Service
Tax Appellate Tribunal, West Zonal Bench, Mumbai in Appeal c
·No. C/1070/04.
A.R. Madhav Rao and M.P. Oevanath for the Appellant.
TS. Doabia, Binu Tamta (for Sushma Suri) for the
Respondent.
The Judgment of the Court was delivered by
. S.B. SINHA, J. 1. Whether "Brimstone 90" which contains
about90% of Sulphur and 10% of Bentonite by way of inert filler
would come within the classification under "Heading 25.03" of E
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 F
(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 ·G
Customs, Nhava Sheva · 2002 (139) E.L.T 328. The Tribunal · · ·
.J
held:- · ·
"8. Elemental sulphur has vide use as a fertiliser. Elemental .
sulphur has to be oxidised to sulphate before it ca"n be H
1144 SUPREME COURT REPORTS [2008] 7 S.C.R.
A 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 sm.all.
The fine particles, however, create handling problems. They
can also be blown away by wind. They may float on the
B 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
c 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
D 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
E 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
F 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. .
G 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 ?'h July, 2004. the benefits of
H . the said exemption notification was not accorded to the appellant.
M/S. DEEPAK AGRO SOLUTION LTD. v. COMMNR. 1145
OF CUSTOMS, MAHARASHTRA [S.B. SINHA, J.]
6. An appeal was preferred thereagainst before the A
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).
8
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 :- C
"3. We have considered the submissio11s 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
0
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 E
sale and therefore classification under he?ding 3808
cannot be approved. The order of lower authorities also
did not bring out very clearly how this packaging is
considered by them to be fit for retail sale. We would
consider the Heading 3825 to be more appropriate after
considering the Heading and Chapter Notes on Fertiliser. F
However, as in the appellants' own case, the sulphur
imported was classified under Chapter 23 we would
request the President to co'nstitute a La·rger Bench to
determine the question of classification of the entity herein
since .the decision in appellants' own case is by a G
coordinate Bench of two members. The question referred
to this case would be classifiable under Chapter 2503 as
per importers or under Heading 3808 by Revenue or under
3825 as a product of Chemical Industries as viewed
hereinabove." H
1146 SUPREME COURT REPORTS [2008] 7 S.C.R.
A The Larger Bench of the Tribunal, however, by its order
dated 27th January, 2006 came to the conclusion that the said
goods were classifiable under "Heading 3808.19 (sic) 3808.90".
8. Mr. AR. Madhav Rao, learned counsel appearing on
behalf of the appellant would submit that the Larger Bench of
B the Tribunal in arriving at the impugned judgment failed and/or ,..
neglected to consider not only the manufacturing process of
"Brimstone 90", and the purpose for which the same is used but
also the technical materials produced before it.
c 9. Mr. T.S. Doabia, learned senior counsel appearing on
behalf of the respondent, however, would support the impugned
judgment.
10. We may, at the outset, place on record the
manufacturing process of the product in question, as noticed
D by the Tribunal itself:-
"2. The manufacturing process and catalogue of Product
was called as the goods were claimed to be crude and
unrefined Sulphur. However, invoice described the goods
as Brimstone 90 (Agricultural Sulphur). The product
E
catalogue read as follows :-
'(a) The Brimstone 90 plant that entered service in Saudi
Arabia for NEAIS is based on Sandvik process
system well known Roto form system. According to
F Sandvik by consistent incorporation 8-10 % of 1
Bentonite in the Sulphur, the release qualities of the
Sulphur in the soil are improved. In addition to this
process, product is consistently sized granules with
low flexibility and low dust content that are free flowing
and easy to handle in storage and application.
G
(b) Liquid Sulphur is trucked to the facility in the NEAIS
tanker fleet. From the Aramco Refinery, a DISTANCE
OF SOME 130 Kms. and is combined with the
imported swelling agents at the plant. The specially
H developed Rotoform Process involve mixing liquid
M/S. DEEPAK AGRO SOLUTION LTD. v. COMMNR. 1147
OF CUSTOMS, MAHARASHTRA [S.B. SINHA, J.]
1148 SUPREME COURT REPORTS (2008) 7 S.C.R.
A sublimed sulphur, precipitated sulphur and colloidal sulphur.
Entry 2503 00 10 read as under:
"Sulphur recovered as by-product in refining of crude oil".
13. Hec;iding 3808 deals with insecticides, rodenticides,
8
fungicides, herbicides, antisprouting products and plant-growth
regulators, disinfectants and similar products, put up in forms
or packings for retail sale or as preparations or articles (for
example, sulphur - treated bands, wicks and candles and fly-
papers). 3808 10 speaks of insecticides; 3808 20 fungicides;
C 3808 30 herbicides, anti-sprouting products and plant-growth
regulators and while 3808 90 speaks of other in the Schedule
as stated by the Tribunal. There is no entry 3808 19.
14. The principal question which arises for our
consideration is as to whether on the face of the said entries
0
Chapter Note 1 of Chapter 25 would be applicable.
15. Entry 2503 speaks of Sulphur of all kinds other than
those which are specifically mentioned therein. It is, therefore,
evident that the said entry is of broad nature. Indisputably the
E product does not come within the purview of the excluded
category.
16. It is well settled what is not excludedwould be held to ·
be included. Within the category of Sulphur, Sulphur recovered
as by-product in the process of refinement of crude oil also finds
F place.
17. Chapter Note 1 of Chapter 25 starts with the words
"except where their context or Note 4 to this Chapter otherwise
requires".
G It is, therefore, difficult to hold that the headings of the
Chapter would cover only the products which are in the crude
state or comes within the purview of other activities contained
therein.
Interpretation of the said Note will depend upon the context
H
M/S. DEEPAK AGRO SOLUTION LTD. v. COMMNR. 1149
OF CUSTOMS, MAHARASHTRA [S.S. SINHA, J.)
.in which the entries have been worded. If an entry is clearly A
worded and is broC!d in character, the samewould lead to the
conclusion that the context otherwise required.
18, An entry is to be given its ordinary meaning. lfany
goods fit in within one entry, the same for any purpose would
not be held to be included in the other and in particular the B
residuary.
19. "Salt arid Sulphur'' are dealt with in Chapter 25. Sulphur
may be used for different purposes including agricultural
purposes. Brimstone 90 is used for. agricultural purposes as c
would appear from the descriptions referred to hereinafter.
20. We may at this stage also notice that Sulphur does not
. find place in Chapter 38 which deals with agricultural operation.
In all probabilities as Sulphur is dealt with in Chapter 25, it was
not found necessary to be dealt therewit.h. D
21. Appellant had filed certain documents by way of
compilation before the Tribunal. We may notice some of them.
In Ullmann's Encyclopedia of Industrial Chemistry relating
to Sulfur para 9.2.3 deals with formed Sulfur. It refers to the E
s.andvik Test. It is a granulating process undertaken for the
purpose of transportation of Sulfur and better used in the
agricultural processes. How this process is employed in the
· agricultural operation would appear from the "Journal Fertilizer
Focus, April 1977" issue in the following terms :- F
"Brimstone 90
The Technology
The Brimstone 90 plant that entered service in Saudi
·Arabia. for NEAIS is based on Sandvik process system G
well known Rotoform system. According to Sandvik by
consistent incorporation 8-10 % of bentonite in the Sulphur,
the release qualities of the Sulphur in the soil are improved.
·In addition, this process, produces consistently sized ·
·granules with low flexibility and low dust content that are H
1150 SUPREME COURT REPORTS [2008] 7 S.C.R.
A free flowing and easy to handle in storage and application"
22. Manufacturing process of Brimstone 90 would appear
from Physical and Chemical Analysis report dated 11th August,
2003 issued by the National Est. for Agricultural and Industrial
Sulphur, Dammam in the following terms :-
B
"Manufacturing Process of Brimstone 90
We are submitted herewith the brief manufacturing
process of Brimstone 90 received from our principals
National Establishment for Agricultural and Industrial
c Sulphur. They receive molten sulphur from the refinery. It is
pumped to a mixing vessel, which contains specially
designed unit. Powdered bentonite along with other agent
is fed into the liquid sulphur & a homogenous mixture is
obtained by intense stiring. The mixture is then pumped
D through a uniquely designed filtration system into the roto
form system, which c0nsist of a roto form filtered unit &
sandvik steel belt puller. The product from the steel belt
puller is discharged into the bags which are then palletized
for shipping."
E
23. Palletization means "the transportation and storing of
loads by means of putting them onto a wooden frame or pallet"
and "using pallets to carry a number of individual's packages
for shipment. How that is done, as indicated hereinabove, is
contained in the Sandvik Process System.
F
24. The Fertilizer Research on Elemental Sulfur fertilizers
and their use on crops and pastures published by Kluwer
Academic Publishers show as under:-
"Key words: Bentonite, cube root model, elemental sulphur ~
G fertilizers, rate of oxidation, sulphur coated urea. J
Introduction
Elemental sulfur (S) is an ideal slow release sulfur (S)
fertilizer. It is 100 % nutrient and this restricts the amount
H of fertilizer required. It is insoluble in water and therefore
M/S. DEEPAK AGRO SOLUTION LTD. v. COMMNR. 1151
OF CUSTOMS, MAHARASHTRA [S.B. SINHA, J)
stable in damp or humid conditions. Although S is A
unavailable for plant uptake, it is oxidized to the plant-
available sulfate-S form by soil micro-organisms. The key
to its success as a fertilizer is the rate of oxidation from S
to suJfate. Factors which affect the rate of oxidation in
soils have been reviewed [51.139]. A cubic model of the B
,i,
oxidation process has been developed [65.142] and is
discussed by Warkinson and Blair [143] in this journal."
- 25. Appellant contends, which has not been denied or
disputed that Brimstone 90 is used for agricultural purposes.
c
26. What meaning should be assigned to Brimstone 90
may be noticed from Encyclopedia of Chemical Technology
Fourth Edition at page 255,which states :-
"Brimstone see crude sulfur.
D
"crude sulfur commercial nomenclature for
ele::mental sulfur; may be bright or
dark but is free of arsenic,
selenium, and tellurium."
27. The dictionary meaning of Brimstone is 'crude sulfur'. E
28. The description in the tariff entry not only covers refined
but also unrefined Sulphur. Sub-notes to the tariff entry on the
HSN prescribe the scope of the goods falling thereunder, the
relevant part whereof is reproduced hereto below:-
F
"(4). Unrefined sulphurs recovered as by-products in
the purification of coal gas by the scrubbing of
sulphurous furnace gases, from sour, natural gas and
from the refining of sour crude miner oils, etc. These
recovered sulphurs, sometimes referred to as G
"purified sulphur" or precipitated sulphur", must not
be confused with the precipitated .sulphur desired in
~.
the Explanatory Notes to heading 28.02"
29. Keeping in view the aforementioned background, we
may have an analytical look at tariff entry No. 3808. H
1152 SUPREME COURT REPORTS [2008] 7 S.C.R.
A It principally deals with insecticides, fungicides, herbicides
etc. The same is to be put up in forms or packings for retail sale
or as preparations of articles. What has been stated by way of
B
example is sulphur treated bands, wicks, candles and fly-papers
and not Sulphur itself. Sulphur treated bands etc. would be
different from crude Sulphur or Brimstone 90.
. '
30. The question which, therefore, should have been posed
by the Tribunal while differing with the·correctness of its earlier
decision was as to whether the product is such which can be
said to be insecticides, fungicides and herbicides etc. It is also
C of some significance that the Revenue was of the opinion that
the product would come within the Entry 3808 30 40 being plant-
growth regulators. The reference was in regard to the
applicability of Entry 2503 and/or 3808 30 40. The Tribunal,
however, made a new case by opining that it would come within
D Entry No. 3808 90, which is impermissible in law. [See - Saci
Allied Products Ltd., UP vs. ComfY1issioner of Central Excise,
Meerut : 2005 (183) ELT 225(SC)].
31. The words 'for example' must be given its ordinary
E meaning. The principle of ejusdem generis noscitur a socis in ·
a case of this nature would be applicable.
32. Sulphur which finds place in the said entry must be
used for the purpose of insecticides, fungicides, herbicides etc.
It is nobody's case that crude Suphur is used for the said
F purpose. Only some bands, candles, fly-papers etc., which are
only Sulphur treated, are used.
33. The Tribunal itself in its referral order opined :-
"The Sulphur in this case is packed in 25 kgs. Pack and
G
there is no material for us to conclude that this packaging
is for retail sale and, therefore, classfication under heading
3808 cannot be approved. The order of lower authorities
also did not bring out very clearly how this packaging is
considered by them to be fit for retail sale:"
H 34. The Tribunal also noticed that the heading 25.03
M/S. DEEPAK AGRO SOLUTION LTD. v. COMMNR. 1153
~ OF CUSTOMS, MAHARASHTRA [S.S. SINHA, J.]
includes :- A
"25.03 Sulfur of all kinds, other than sublimed Sulfur,
precipitated Sulfur and colloidal Sulfur.
The heading include :
B
(1) crude mineral sulfur occurring in the free state,
whether or note concentrated by mechanical
.processes to remove'part of the rocky matter.
(2) Unrefined sulfwr extracted from. mineral sulfur by
melting. This process may be carried out in sulfur c
kilns (calcaroni) furnaces (Gill furnaces), etc., or may
be effected in the deposit itself· by forgoing
superheated steam through pipes sunk in a bore
hole (Frasch process).
(3) '
Unrefined sulfur obtained by the roasting pyrites or D
by tre treatment of other sulfur minerals.
(4) Unrefined sulfurs recovered as by products in the
purification of coal gas, by the scrubbing of sulfurous
furnace gases, from sour natural gas and from the
E
refining of sour crude mineral oils, etc .. These
recovered sulfurs, sometimes referred to as "purified
sulfur" or "precipitated sulfur", Must not be confused
with the precipitated sulfur dined in the Explanatory
Note to heading 28.02
F
The unrefined sulfurs in the last three paragraphs
are sometimes fairly pure. This is especially true of
the sulfur produced by the Frasch process which
contains such small proportions of impurities that it
is practically never refined; it is usually presented in G
rough lumps or as dust.
(5) Refined sulfur, obtained by rapidly distilling crude
sulfur and condensing it in the liquid state; sulfur thus
obtained can then be moulded into sticks or cakes,
or crushed after solidification. H
1154 SUPREME COURT REPORTS (2008] 7 S.C.R.
A (6) Triturated sulfur, which is sulfur (impure or refined) in
the form of a finely divided powder obtained by
grinding and then sieving, either mechanically or by
the gas suction. These products are known as
'sieved sulfur'', Winnowed sulfur''. "automized sulfur",
B etc., according to the process employed and the
fineness of the parties.
(7) Sulfur, obtained by the sudden cooling of sulfur
vapours without passing through the liquid phase,
which is insoluble, particularly in carbon disulphide
c (sulfur u).
The various typef of sulfur classified in this heading are
used in the chemical industry (preparation of numberous,
sulfur compounds, sulfur dyestuffs, etc.) for vulcanizing
rubber, as a fungicide in viticulture, in the manufacture of
D
matches and sufur wicks and for the preparation of sulfur -1
dioxide in tht: bleaching industries, etc.
The heading excludes sublimed sulfur, precipitated sufur
and colloidal sulfur (heading 28.02). Sulfur put up in forms
E or packings for retail sale as fungicides, etc., falls in
heading 38.08."
35. Paragraph 2 of the said heading refers to 'Frasch
process' which indicates pumping hot water to get slurry out. It
is not a permitted process under Note 1. Only paragraph 4 refers
F to the product in question. It is not the case of the Revenue that
clauses 5. 6 and 7 are attracted to the process which are used
in obtaining crude Sulphur.
36. Regarding packaging of 25 kg., the Tribunal itself has
G noticed:-
"The present purchase order was made in 25 kg. flat
woven PE/PP bags with stickers of one ton Jumbo bags
as per requirement. All bags were required to bear
flexographic printing in English language. The markings
H should reflect the following.
M/S. DEEPAK AGRO SOLUTION LTD. v. COMMNR. 1155
OF CUSTOMS, MAHARASHTRA [S.B. SINHA, J.)
'Product .... . A
Supplier .... .
Origin ..... .
Gross/Net weight ......
Sate of Mfr .... .. B
Batch No ...... .
Imported and Marketed by Deepak Agro Solutions
Limited. -
For Agricultural Use only' "
c
37. The Tribunal's finding that it was marketed by the
importer in retail bags may not be correct as an agriculturist
ordinarily would not purchase a bag containing 25 kgs.
"Brimstone"
,. 38. In H.PL. Chemicals Ltd. vs. Commissioner of C. D
Excise, Chandigarh: 2C06 (197) E.L.T. 324 (S.C.) whereupon,
strong reliance has been placed by Mr. Doabia, this Court was
concerned with classification of Salt and 'denatured salt', The
Tribunal in that case also held :-
E
" ... On a study of the process of manufacture we find that
certain chemicals are reacted, none of these chemicals
are classifiable under chapter 25, thus the Residue in
question cannot be a product obtained after chemical
processing e.g. (electrolysis). None is a bye-product of a F
treatment of certain ores. The product is obtained after
crystallisation. The product is obtained as a bye-product
or Residue while manufacturing Hydrazine. Hydrazine is
admittedly a chemical. Thus the Residue in the instant
case is nothing but a residue of chemical and allied
industries. We note that there is specific heading for G
Residue of chemical and allied industries under the present
chapter Heading 38.24. Since there is specific heading,
we need not go to decide the issue by resorting to be
Rules for interpreLation of tariff. These Rules are attracted
H
1156 SUPREME COURT REPORTS [2008]7 S.C.R.
A only when the heading is not specific or the product is a
composite one."
•
I
The said finding of the Tribunal was held to be not correct
by this Court stating that "Denatured Salt" is specifically included
in Chapter Heading No. 25.01 .
8
.39. In regard to Chapter Note 1 of Chapter 25 in HSN, this
Court obseNed :-
"Apart from this, sirnilar chapter notes also appears in
Chapter No. 1 of Chapter 25 in HSN which clearly provides
c that residuary Sodium Chloride left after chemical
processing is covered by Heading No. 25.01. Chapter
note 2 does not provide anywhere that in order to be
covered by Heading No. 25.01 the product must not
contain impurities. The bracketed portion in Chapter note
D 2 is being totally misread by the Revenue. The only effect · "'
of the bracketed porti0n is that if the goods in question
are washed, such wash may be even with chemical
substances eliminating the impurities without changing
the structure of the product. It is not as if Chapter note 2
E provides that in order to be covered by Heading No. 25.01,
all impurities must be removed. Similarly, it is not provided
· either in Chapter 25 of-the Central Excise Tariff or in
Chapter note 2 or in HSN that in order to be covered by
Heading No. 25.01, the starting material must be salt.
F Residuary Sodium Chloride left after chemical processing
is clearly covered by Heading No. 25.01 as per HSN."
40. We are, therefore, of the opinion that the Tribunal was
not correct in its view.
G 41 For the aforesaid reasons the impugned judgment
cannot be sustained and it is set aside accordingly. The appeal
is allowed with no order as to costs.
N.J. Appeal allowed.
H
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