1. Jivagro Limited, Plot No. 3133 to 3139, C/o PI Industries Limited, GIDC Panoli, Bharuch, Gujarat - 394 115 [for short -'applicant'] is registered under GST and their GSTIN is 24AAECJ7119A1Z1.

2. Briefly, M/s. Isagro (Asia) Agrochemicals P Ltd [for short - M/s. Isagro] merged with P I Industries Ltd & the B2C vertical of Isagro was transferred to M/s Jivagro Limited, a newly incorporated subsidiary of PI Industries, which was approved by the National Company Law Tribunal vide its order dated 6.12.2021.

3. Prior to this merger, M/s. Isagro was engaged in the manufacture of the product Rapigro & was classifying it under TI 3507 of CETA '85. However, Central Excise authorities disputed the same and ordered its classification under TI 38089340, as a'plant growth regulator'. Various show cause notices were issued, which are presently pending before various authorities.

4. The applicant turther states that they are manufacturing and supplying the product Ropigro by classifying it under 3507 lt is further stated the according to them,the product merits classification under CTH 31010099.

5. The applicant has given detailed reasoning to substantiate their belief that Rapigro merits classification under 31010099, viz

• that they have applied & have been granted registration for the product as a bio stimulant under clause 20c(5)(b) of the Fertilizer (lnorganic. organic or mixed) Control order 1985 [for short -FCO]; that since in terms of the FCO, Rapigro is a bio-stimulant, it falls within the definition of fertilizer;
• fertilizers are covered under chapter 31;
• Rapigro provides essential nutrients to plants; that it is brought by the farmers for use as a fertilizer for beneficial growth of plants;
•  that both the terms'bio stimulant' and 'fertilizers' are defined under FCO;
• in terms of circular No. 1022/10/2016-Cx dated 6.4.2016, for any product to merit classification under CETH 3105 as other fertilizers it must have nitrogen, or phosphorus or potassium or their combination as an essential constituent providing the essential character to the product. The chemical elements nitrogen, phosphorus & potassium are also referred as macronutrients or primary fertilizer elements & are required in higher quantity by the plants;
• that where the essential constituent giving character to the mixture is one or more ofthe three element namely nitrogen, phosphorus or potassium the mixture shall be classified under any of the heading of chapter 31, depending upon its composition;
• perusal of the chemical composition of Rapigro shows that it contains amino acids peptides a significant component of which is nitrogen;
• CPH liquid utilized in manufacture of Rapigro contains amino acids and amino nitrogen which provide nutrition to plants;
• that Rapigro is made from CPH liquid, procured from M/s. Sowbhagya without it undergoing any change in its chemical properties;
• that M/s. Sowbhagya classifies CPH Liquid under TI 31000099;
• that CPfl liquid is being manufactured from vegetable sources;
• that according to them Rapigro is classifiable under 3101 and Rapigro granules sold in packages of gross weight not exceeding 10 kgs merit classilication under heading 3105 of CTH;
• they have also relied upon the following circular & citations
• Circular no. 1022110/2016-Cx dtd 6.4.2016:
• BPL Pharmaceuticals Ltd I995(77) ELT 485 (SC);
• Soulfeed Plant Product & Services P Ltd [2018 (36a) ELT 999 (Tri)]
• Karnataka Agro Chemicals [2007(215) ELT 470 (Tri)] & [2008(221) ELT l2 (SC)
• Atul Glass lndustries Ltd [986 (25) ELT 473 (SC)]
• Leeds Kem [200] (134) ELT 294 Tri)].

6. The applicant has also submitted detailed reasoning as to why Rapigro would not fall within the ambit of Tl 3507 viz

• TI 3507 relates to Enzymes; prepared enzymes not elsewhere specified or included; that it is a residuary entry for enzymes not covered elsewhere;
• Rapigro is not an enzyme because
• Enzymes are organic substances produced by living cells;
• Enzymes have property of causing & regulating specific chemical reactions inside or outside living cells without undergoing any change in their chemical structure
• Enzyme solely has protein or protein combined with a non protein compound of low molecular weight acting as a cofactor
• Enzymes do not include fertilizing elements eg Nitrogen, Phosphorus
• Rapigro contains organic fractions derived through fermentation process containing growth promoler, organic acid. protein & protein hydrolyzates. amino nitrogen, peptides. vitamins & micronutrients
• Rapigro is a complex product containing nitrogen & is a bio-stimulant & therefore a f'ertilizer and not an enzyme.
• Rapigro is a bio-stimulant & is registered with both Central and State Govemment; that it cannot be relegated to residual entry ofheading 3507;
• that they wish to rely on rule I ofthe General Rules of Interpretation which states that if a product can be classified in terms of heading of custonrs taritl, under a specific heading it should not be classified under another entry or residual entry;
• that rhey wish to rely on the case of JOCIL Ltd [20] 1 (263) ELT 9 (SC). UNI Producrs 12020(372)ELT 465 (SC)1. Mauri Yeast lndia P Ltd [2008 (225)ELT 321 (SC)], HPL Chemicals Ltd [2006 (197) ELT 324 (SC)], Gujarat Perstrop Electronics Ltd [2005 (186) ELr 532 (sC)].

7. In view of the foregoing, the applicant has filed this application seeking advance ruling on the below mentioned questions viz

1 . Classification ol Rapigro under the Cusloms Tariff Act, 1975;

2. Classification of Rapigro under the Central Goods & Services Tax Act, 2017;

3. Rate of tax payable on Rupigro.

8. Personal hearing was held on 23.3.2023, wherein Ms. Sonia Gupta, and Shri Ashok Dhingra, both Advocates, represented the applicant. The authorized representative informed that they are presently supplying under 3507. On being asked it was informed that M/s. Sowbhagya is clearing under 31010099. They further stated that it is a bio-stimulant and by virtue of it being a bio stimulant it is a fertilizer. They further stated that they would provide [a] what active ingredient is being added by M/s. Sowbhagya and [b] copy of the original order in respect of Nt7s. Sowbhagya.

9. Vide email dated 27.3.2023, the applicant provided certificare from M/s. Sowbhagya in respect ofthe query seeking details of product added in step 5 ofther process flow chart reproduced in para 2.3 of the application; copy of OIO dated 10.10.2006 passed by ADC, Hyderabad-lll commissionerate wherein the classit'ication of CPH liquid was upheld under chapter heading 3101; ROC certificate of change of name in the case of M/s. Sowbhagya Biotech P Ltd.

Discussion and findings

10. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act.

11. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relvant facts. & the applicant's submission/interpretation of law in respect of question on which the advance ruling is sought.

12. Before dealing with to the submissions made by the applicant, we would like to reproduce the competing tariff entries, for ease of reference:

13. In the explanatory notes of HSN, 35.07 it is stated as follows:

14. CBIC vide its circular No. 1022/10/2016-Cx dated 6.4.2016, has clarified on Classification of Micronurients, Multi-micronutrients, Plant Growth Regulators & Fertilizers. The relevant extract of the clarification is reproduced below for ease of reference viz

15. Explanatory notes ofHSN 3808 states as under:

16. We find that the product in respect of which advance ruling is sought was manufactured and cleared by the erstwhile M/s. Isagro. The dispute in respect of the product's classification it is informed, is stilt pending.

17. During the course of personal hearing, we were provided and shown the copy of the label of Rapigro 'which is reproduced below:

18. consequent to the personal hearing, the applicant has provided a copy of the certificate issued by M/s. Sowbhagya Biotech (P) Ltd., which broadly states as  follows:

• that they supply CPH [Cereal Protein Hydrolysate] in bulk to the applicant under Plant Growth promoiers (Organic Fertilizers); that it is protein based lertilizer commonly also known as Plant Growth Promoter;
• it is derived from vegetable source ie Maize Protein (Gluten);
• that it is a natural fertilizer & is not figuring in the schedule to FCO;
• that they purchase maize protein treated with Nzyme & then treat with mild acids later with ammonia liquid for converting into CPH;
• its use is on crop as foliar spray for improving the crop quality yield; CPH liquid is to be used in large quantities.

19. M/s. Jivagro Limited has stated that that they are manufacturing & supplying the product Rapigro under TI 3507 since December 2021' The applicant now feels that their product falls under 31010099. An interesting observation that needs a mention is the rate of GST under the various competing entries viz

20. The GST rate of both TI 3507 and 3808 being 18%, possibly could be the reason for the applicant seeking a ruling proposing classification under TI 3101 , which as is evident, was never in contention in the past as far as the classification of Rapigro is concemed.

21. Be that as it may, we now take up the classification of Rapigro. The dispute primarily is whether the product is a fertilizer as claimed by the applicant or a plant growth resulator. we note that there is only a fine distinction between .fertilizer' and a 'plant growth regulator'. While fertilizer is generally for pr.omoting the growth of plant or crop for desired increased harvest, the plant growth regulators work on specific areas resulting in modified growth or even retardation of certain growth. We find that as far as classification under TI 3507 is concemed, the applicant has himself in depth provided the reasoning as to why Rapigro would not fall within the ambit of TI 3507 The department has since years been requesting/informing their predecessor [m/s isagro] that Rapigro is not classifiable under TI 3507. The explanatory notes which we have reproduced above, clearly state that enzymes are organic substances produced by living cells & have the property of causing & regulating specific chemical reactions inside or outside living cells without themselves undergoing any change in their chemical structure.

22. As per the manufacturing process, applicant purchases CPH [Cereal Protein Hydrolysate] liquid from lWs. Sowbhagya Bioitech P Ltd, Hyderabad [for short - M/s. Sowbhagya]. The applicant, thereafter sends this CPH liquid to M/s. RP Chemtech, Ankleshwar, for converting it into Ropigro Liquid by adding DM water to the said CPH liquid and also manufacturing Rapigro granules through heating process. The applicant has also provided a process flow chart, [refer para 2.3 of the applicationl, undertaken by M/s. Sowbhagya to obtain CPH liquid.

23. During the course of personal hearing, applicant was specifically asked as to what was the addition in step 5 of the process flow chart reproduced in para 2.3 of the application mentioned as 'organic nutrients obtained through fermentation'. The applicant has shied away from clarifuing the same & has once again forwarded the certificate from M/s. Sowbhagya, the contents of which is already reproduced supra to substantiate their argument that it is derived from vegetable source ie maize protein (Gluten).

24. In the aforesaid backdrop, Rapigro cannot be termed as an Enzyme. Hence, we agree with the contention put forth by the applicant that the product would not fall within the ambit of 3507. However, this is not withstanding the fact that in the past when proceedings were launched, the applicant vehemently contended before the authorities under the central Excise Act, 1944, that Rapigro, fell within the ambit of 3507.

25. The benefits of the product Rapigro,, as mentioned in the label [para 2.7] and the technical bulletin [para 2.8], is as under viz

• it maximizes utilization olavaitable soil nutrients; leads to better root growth;
• it. improves crop quality & increases yield significantly; leads to taller/vigorous plant/larger leaves; better flowering, better fruit in larger size;
• it increases plant resistance/tolerance to pest and diseases;
• it reiuvenates plants exposed to and fruit fixation;
• it is non toxic and safe for use.

26. The two competing entries post our finding supra that Rapigro would not fall within TI 3507 are TI 3101 and TI 3808. Now chapter note to chapter 38 of the Customs Tariff Act, states as follow

27. The applicant's reasoning as to why Rapigro merits classification under 3101 as a fertilizer, is mentioned in detail in para 5 above. For the sake of brevity, we are not repeating it. To summarize, we find that the applicant has stated that they had applied & was granted registration for the product as a'biostirnulant' under clause 20C(5Xb) of the FCO & being a bio-stimulant, it fell within the definition of fenilizer; that in terms of its end-use and clarification vide circular dated 6.4.2016, Rapigro shall be classified under chapter 3l; that the chemical composition of Rapigro shows that it contains amino acids peptides, a significant component of which is nitrogen and lastly that the supplier M/s. Sowbhagya has classified it under TI 3 I 000099 of CTH;

28. CBIC vide its circular No. 1022l10/2016-CX dated 6'4'2016, has clarified on Classification of Plant Growth Regulators as under viz

Further, as per the HSN, plant growth regulators are mentioned as 

Plant-growth regulators are applied to alter lhe life processes of a plant so as to accelerate or retard growth, enhance yield, improve quality or facilitdle harvesting, etc.. Planl hormones (phylohormones) are one type of plantgrowth regulalor (e.g., gibberellic acid). Synthetic organic chemicals are also used as plant growth regulators.

29. We find that the applicant has vehemently stated that according to them Ropigro would be covered under TI 3 101 . Before dwelling on the same, we find it appropriate to re-produce the explanatory notes of HSN in respect of 3101 viz 

30. Now, let us examine the claim of applicant that his product Rapigro would fall under 3101. CBIC's circular dated 6.4.2016, has clarified on classification of Fertilizers. We have reproduced the relevant extract and hence for brevity the same is not being repeated. However, to summarize, the clarification states that fertilizers classified under chapter 31 may inter alia be minerals or chemical fertilizers - nitrogenous (CETH 3102), phosphatic (CETH 3103 ), potassic (CETH 3104) or fertilizers consisting of two or three of the fertilizing elements namely nitrogen, phosphorous and potassium. The chemical elements - nitrogen, phosphorus and potassium are also referred as macronutrients or primary fertilizer elements and are required in higher quantity by the plants.

31. On going through the TI 3101 we find that the description mentioned is of animal or vegetable fertilizer, whether mixed together or chemically treated, Guano, & Other which includes animal dung, animal excreta & others. The applicant has not specifically pointed out to us as to how the product Rapigro would fall under the description 'Others' ie CTH 31010099. Moreover, at the cost of repetition, the applicant has failed to divulge as to what is the addition of other 'organic nutrients obtained through fermentation' which is added by M/s. Sowbhagya to the vegetable protein to manufacture CPH Liquid. In the present era other than the classical PGRs various other new plant growth promoter/regulator/stimulator are discovered and are currently used by the fanner for increasing their yield/quality of their produce. This fact is forthcoming from Sr. No. (iv) of the comments of ICAR -Indian Agricultural Research lnstitute, appended with circular No. 1022/10/2016-Cx dated 6.4.2016, which is reproduced below tbr ease of reference viz.

As the applicant has not disclosed the constituents added in step 5 as mentioned in process flow chart, it is difficult to exclude this product from classification as a plant growth regulator falling in chapter 3805.

32. Further, the applicant has relied on the definition of fertilizers as defined under FCO, which states as follows:

As per the explanation, essential plant nutrients includes any primary nutrients viz nitrogen, phosphorus and potassium, secondary nutrients like calcium, magnesium and sulphur and micro nutrients like zinc, manganese, copper, iron, boron and molybdenum. On going through the analytical composition provided by the applicant [refer para 2.4) we do not find any mention or inclusion of these secondary or micro nutrients.

33. The circular dated 6.4.2016 clarifies that *lt may also be noted that notifications issued under FCO are not relevant for deciding classification under Central Excise Tariff'. The averment therefore, that since they have applied and have been granted registration as a bio stimulant under FCO would not be the sole deterrnining factor under the present proceedings.

34. Further the circular dated 6.4.2016 goes on to state that"Where the essential constituent giving character to the mixture is one or more of the three elements namely Nitrogen, Phosphorus or Potassium, the mixture shall be classiJied under any of the heading of chapter 31, depending upon its composition." Again ongoing through the analytical composition, we find that neither Nirogen, Phosphorus or Potassium is the essential constituent giving character to the product Rapigro.

35. We find that the applicant has also attached the Rapigro Liquid Technical Literature. The introduction states the following viz

35.1 Further, we find that the technical literature also lists the important characteristics of " Ropigro"

Important characteristics of "RAPIGRO"

• Activates absorption of available soil nutrients and provides required minerals in available form.

36. We understand that both fertilizer and plant growth regulator are different. While a 'fertilizer' promotes growth of the plant, a .plant growth regulator' on the other hand also stimulates plant growth. The plant growth regulator in-fact promotes/inhibits the growth by affecting the structure at the physiological level. Whereas fertilizers provide nutrients, - the plant growth regulator is an organic component which when applied in low concentration promotes, inhibits or qualitatively modifies plant growth. plant growth regulator further helps plants in making efficient use of the nutrients for their growth. plant growth regulators are classified under CETH 38.08 alongside other insecticides, fi-rngicides, herbicides and disinfectants. In-fact plant growth regulator are even considered as pesticides in some parts of the world.

It is in this background, that on a conjoint reading of the technical bulletin, characteristics, rate of applic ation, supra we observe as under

thus we find no difficulty in holding that the product Rapigro merits classification trnder TI 38089340 as a Plant Growth Regulator.

37. The applicant has relied upon variousjudgements viz

BPL Pharmaceuticals Ltd 11995(77) ELT a85 (SC);

38. The applicant has also relied upon the Order-in-Original No. 1612006 (ADC) dated 30.1 0.2006 to further aver that since CPH liquid is classified under Tl 3101, Rapigro which is manufactured using the said liquid should also fall under the same TI. The argument lacks merit primarily because the OIO has been decided way back before issue of the CBIC's clarificatory circular dated 6'4.2016' which specifically deals with classification of products falling under fertilizer, plant growth promoter, etc. and going by the same we find that the product viz RAPIGRO is a plant growth regulator.

39. In the light of the above, we rule as under:

RULING

1. The classification of Rapigro under the Customs Tariff Act, 1975 and under the Central Goods & Services Tax Act, 2017 will be under 38089340' as a 'plant growth regulator'

2. The rate of tax applicable on Rapigro is 18% [9% CGST and 9% SGST] as per Sl. No.87, Schedule III, notification No. l/2017-CT(Rate) dated 28.6.2017