- (1.)This appeal has been preferred from the decision of the Delhi High Court striking down a Circular dated 28th October, 1997 issued by the Central Board of Excise and Customs (briefly CBEC). The circular directed the classification of technical grade of pesticides, insecticides etc. under Chapters 28 and 29 of the Schedule to the Central Excise Tariff Act, 1985 (referred to as the '1985 Act') and not under the Heading No. 38.08 of the Schedule. Technical grade pesticides are chemical compounds in a concentrated form. The respondent before us is an association of manufacturers of Technical grade pesticides (TGP) and insecticides and formulations thereof. It claimed before the Delhi High Court that TGP, insecticides etc. are classifiable under Tariff Heading 38.08 and not under Chapter 28 and 29 and prayed inter alia for cancellation of the circular and for a direction on the appellants before us, to classify TGP etc. and bulk formulations under sub-heading 3808.10 and for a refund of the enhanced duty paid for the past under protest or any excess amount received by the Department. The Delhi High Court accepted the respondent's contention and allowed the writ petition. On the application of the appellants, leave was granted by this Court to appeal against the High Court's judgment.
(2.)While impugning the decision of the High Court, the appellants have conceded that prior to 1996 TGP and insecticides etc. in bulk were classified under the Tariff Heading No. 38.08 of the Act. According to the appellants, because this tariff heading was amended in July 1996, after 1996 TGP etc. in bulk concentrated forms were excluded from Heading No. 38.08 and were covered under Chapter 28 or 29 of the Act depending upon the composition. This position, according to the appellants, was further clarified when Chapter 38 Note 1 (a) (2) was amended in 1997.
(3.)According to the respondent the amendments in 1996 and 1997 have made no difference to the classification of bulk pesticides and insecticides etc. It is submitted that the amendments were intended to and in fact serve the purpose of extending the liability to excise to insecticides, pesticides etc. in retailable forms. The issue, therefore, is did the 1996 and 1997 amendments to Chapter 38 serve to remove bulk TGP, insecticides etc. from that Chapter and place them in Chapter 28 or 29