ORDER
Gowri Shankar, Member (T)
1. The question for consideration in this appeal is the classification of the consignments of fertilizer that the appellant imported in June 1990 at Mumbai. In the bills of entry that were filed for their clearance, it claimed their classification in heading 3105.90 of the Customs Tariff. The goods were provisionally assessed to duty pending their correct classification. Based upon the result of test of a sample of the goods by the Deputy Chief Chemist of the Department, the Deputy Commissioner of Customs finalized the assessment by classifying the goods in subheading 60 of heading 31.02. This classification has been confirmed by the Commissioner (Appeals). Hence this appeal.
2. It was contended before us that since the classification claimed by the importer was earlier determined by an adjudication order of the Additional Commissioner of Customs, it was not open to the department to question it. He further contends that the goods had earlier been classified in heading 3105.90 by an adjudication order of the Additional Collector of Customs in 1999, and such classification cannot be changed. The goods are also commercially known as calcium nitrate, and evidence is cited in support. It is settled that there is no estoppel in matters of taxation, and both the assessee and the department are not bound by the classification that was earlier decided by the Additional Commissioner, and accepted by the importer, since it did not appeal that order. The further contention, that the goods are commercially known as calcium nitrate, is also not acceptable. The classification of the goods has to be decided in accordance with the contents of the tariff, including the notes to the sections and chapters of it.
3. The report of the Deputy Chief Chemist reads as under:
a. “M/s. Rallis India Ltd. have imported calcium nitrate solution under B?E No. 907292 dated 5-6-02. The analysis report of M/s. Hydro Agri, Belgium, enclosed with this state that it contains N = 15.6%, NH4 NO3 = 6.4% and water insoluble = 0.08%. The calcium nitrate figures at Sr. No. 1(K) of FCO Order 1985. It contains N = 15.5%, nitrate nitrogen as N = 14.4%, ammonical nitrogen = 1.1%, water insoluble = 1.5% (max).
b. “The literature submitted by M/s. Rallis India, which was approved by FCO, gives the molecular formula of calcium nitrate as Ca (NO3)2 NH4 NO3 10 H2O. The analysis of this product tallies with that reported by M/s. Hydro Agri.
c. “Hence, the calcium nitrate having total nitrogen as N = 15%, nitrate nitrogen as N = 14.4%, ammonia nitrogen as N = 1.1%, will not be of single compound of calcium nitrate but mixture of calcium nitrate and NH4 nitrate. Such composition is known to be covered under 1(K) of FCO 85 as fertilizer.
i. Sd/-T.
Daryani)
ii. Commercial Examiner Gr.II”
4. It is based upon this report that the product is a mixture of calcium nitrate and ammonium nitrate (the latter to the extent of 1.1%) that the goods have been classified by the department.
5. Heading 31.02 covers mineral or chemical fertilizer, nitrogenous. Sub heading 60 is for “double salts, mixtures of calcium nitrate and ammonium nitrate”. Heading 31.05 is for mineral or chemical fertilizers containing two or three of the fertilizing elements nitrogen, phosphorous and potassium; other fertilizers; goods of Chapter 31 in tablets or similar forms or in packages of a gross weight not exceeding 10 kg. Sub heading 90 claimed by the appellant is for “other”, the residuary heading.
6. The contention of the counsel for the appellant is that the ammonium nitrate that is present in the goods to the extent of 1.1% is not the result of a deliberately mixture of it with calcium nitrate. The ammonium nitrate arises as an impurity in the manufacture of calcium nitrate. In the process of manufacture, phosphate rock is digested to nitric acid and the calcium in the reactive mixture separated and crystallized as calcium nitrate. This calcium nitrate, which is in molten form, is acidic. The acidity has to be reduced to facilitate its granulation and to make its handling by its ultimate users safe. For this purpose, some ammonia is added to the melt. This results in the formation of a small fraction of ammonial nitrate as a contaminant or as n impurity. He relies upon the specifications contained in Sub-clause 1(K) in Part (A) to Schedule 1 to the Fertilizer Control Order, to say that calcium nitrate is permitted to have ammonial nitrogen to the extent of 1.1%. Further, in commercial usage, the product is known as calcium nitrate, in support of which evidence is produced in the form of certificates by experts.
7. The Departmental Representative reiterates the finding of the Commissioner (Appeals), pointing out that the product is a mixture of calcium nitrate and ammonium nitrate, finding specific mention in sub-heading 60 of heading 31.02.
8. The contention in the appeal, that the ammonium nitrate is present in the calcium nitrate, not as a deliberate mixture, but arises as an impurity in the process employed for the manufacture of calcium nitrate, has not been substantiated by such evidence as technical literature relating to manufacture of calcium nitrate, or an affidavit by the manufacturer A certificate to this effect dated 2002-09-179 (sic) of Norsk Hydro Asa, Oslo, Norway, the manufacturer of the product, which was produced before us, is not the affidavit that it purports to be, not having been affirmed before a notary or other appropriate authority. If this contention were correct, the product that the appellant imported would, for the purposes of classification, have to be considered to be calcium nitrate, classifiable in Chapter 28. Note 1(a) to Chapter 28 prescribes that, except where the context otherwise requires, the headings of the chapter apply only to separate chemical elements and separate chemically defined compounds, whether or not containing impurities. The Explanatory Notes to the Harmonished System of Nomenclature, on which the tariff is based, explain a separate chemically defined compound to be a substance which consists of one molecular species whose composition is defined by a constant ratio of elements and can be represented by a definitive structural diagram. Calcium nitrate fits this definition. The notes further explain that the term “impurities” applies exclusively to substances whose presence in the single chemically defined compound results solely and directly from the manufacturing process (including purification). None of the Clause (b) to (e) of note 1 to Chapter 28, referring to the separate chemically defined compounds of note 1(a), dissolved in water, dissolved in other solvents, with an added stabilizer or anti-dusting gent for specific purpose, will apply. Hence calcium nitrate will fall for classification in heading 28.
9. That calcium nitrate, being a separate chemically defined compound, cannot be classified in Chapter 31 is also clear from note 1 to this chapter. Clause (b) of note 1 provides that the chapter does not cover separate commercially defined compounds other than those answering to descriptions in Note 2(A), 3(A), 4(A) or 5. The goods described in these notes are the following:
Note 2(A)
Goods which answer to one or other of the descriptions given below:
(i) Sodium nitrate, whether or not pure;
(ii) Ammonium nitrate, whether or not pure;
(iii) Double salts, whether or not pure, of ammonium sulphate and ammonium nitrate;
(iv) Ammonium sulphate, whether or not pure;
(v) Double salts (whether or not pure) or mixtures of calcium nitrate and ammonium nitrate;
(vi) Double salts (whether or not pure) or mixtures of calcium nitrate and magnesium nitrate;
(vii) Calcium cyanamide, whether or not pure or treated with oil;’
(viii) Urea, whether or not pure.
Note 3(A)
Goods which answer to one or other of the descriptions given below:
(i) Basic slag;
(ii) Natural phosphates of heading No. 25.10, calcined or further heat-treated than for the removal of impurities;’
(iii) Superphosphates (single, double or triple);
(iv) Calcium hydrogen orthophosphate containing not less than 0.2 per cent by weight of fluorine calculated on the dry anhydrous product;
Note 4(A)
Goods which answer to one or other of the descriptions given below:
(i) Crude natural potassium salts (for example, carnallite, kainite and sylvite);
(ii) Potassium chloride, whether or not pure, except as provided in Note 1(c) above;
(iii) Potassium sulphate, whether or not pure;
(iv) Magnesium potassium sulphate, whether or not pure.
Note 5
Ammonium dihydrogenorthophosphate (monoammonium phosphate) and diammonium hydrogenorthophosphate (diammonium phosphate), whether or not pure and intermixtures thereof.
10. Heading 31.05 claimed by the appellant also will not apply in the light of the specific exclusion contained in the Explanatory Notes to this heading in the Harmonised System of Nomenclature at page 480 in volume 2 of the 1996 edition, to separate chemically defined compounds not specified in notes 2 to 5 of the Chapter, which might be used as fertilisers.
11. If it is established that the presence of ammonium nitrate is not deliberate, but is due to the manufacturing process, as is claimed, the product, thus, would be appropriately classifiable in chapter 28. That contention would first have to be established. If not, the presence of ammonium nitrate cannot be regarded as an impurity, and the classification determined in the impugned order will have to be confirmed. Chapter 28 was not under consideration by either side in the proceedings to finalise the provisional assessment. We think it appropriate that both these aspects should be considered afresh by the adjudicating authority, after the appellant is given an opportunity to represent its case. Either side will be at liberty to adduce evidence in this regard.
12. The appeal is accordingly allowed and the matter remanded to the adjudicating authority.