The Customs, Excise and Service Taxes Appellate Tribunal (CESTAT), Mumbai, recently held that the ‘liquid seaweed concentrate’ imported by a taxpayer should be classified as a fertiliser and not as a plant growth regulator, in view of its chemical composition. The appellant, taxpayer Excel Crop Care Limited, had imported ‘liquid seaweed concentrate (Crop Plus)’ from the US and had filed three writ petitions against it.
The Customs, Excise and Service Taxes Appellate Tribunal (CESTAT) in Mumbai recently held that the “liquid seaweed concentrate” imported by a taxpayer should be classified as a fertiliser and not a plant growth regulator, citing its chemical composition.
The appellant-taxpayer Excel Crop Care Limited imported “Liquid Seaweed Concentrate (Crop Plus)” from the USA and filed three import declarations classifying the goods as CTI 3101 0099. The goods were self-valued, customs duties were paid and they were cleared for domestic consumption.
Subsequently, during the post-audit, the department found that the goods should have been classified as CTI 3809 9340 and therefore were not eligible for the preferential tariff. On May 19, 2017, the department issued a show cause notice requesting the differential tariff.
The Deputy Commissioner of Customs issued a ruling on 28 January 2020 to uphold the reclassification, confirm the accrual of customs duties and interest, and impose a fine. The taxpayer’s appeal to the Commissioner of Customs (by way of appeal) was rejected on 31 March 2022. Dissatisfied with the decision, the taxpayer filed an appeal with the Tribunal.
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A two-judge bench comprising of S.K. Mohanty (Judge Member) and M.M. Parthiban (Technical Member) considered the material and held that the show cause notice dated May 19, 2017, proposed to reclassify the imported goods as “plant growth regulators” under CTI 3808 9340 but did not clearly explain why the original classification under CTI 3101 0099 was incorrect.
The appeal court noted that the analysis report showed that the cargo contained 28% organic matter from seaweed and 9.8% nitrogen, phosphorus and potassium. Since most of the cargo was fertiliser, it could not be considered a plant growth regulator.
CESTAT also referred to a larger court decision that clarified that fertilisers provide nutrients for plant growth, while plant growth regulators affect certain processes in plants.
Post time: Aug-12-2025