Full Judgment
2. In the order impugned in the appeal, the Commissioner has held that technical grade pesticides manufactured and cleared by the appellant from 23rd July 1996 to 30th June, 1997 is correctly classifiable under the Heading 3942.00 of the Central Excise Tariff, and not under Heading 3808.10 as was claimed and initially approved and ordered payment of duty consequent on the classification and imposed a penalty on the appellant under Section 11 AC of the Act.
3. The Commissioner orders has been issued as a result of the amendment made to Heading 38.02 and to Note 2 to Chapter 38 made by the Finance Act, 1996 which took effect from 23rd July 1996 onwards. The effect of this amendment on the classification of technical grade pesticides has been considered by the Delhi High Court in its judgment in Pesticides Manufacturers and Formulators Association of India v. U.O.I. -1999 (30) RLT 231. In the judgment the Court had held that notwithstanding the amendment to that heading and the introduction of note to Chapter 38, the circular of the Board directing classification pesticides not under Chapter 38, but under the appropriate Chapter 28 or 29, was not correct and struck it down, quashing notices issued and actions based on that circular. It had found that there was no distinction for the purpose of classification under Heading 38.08 of pesticides in bulk form or those to be sold as retail product. The applicability of the judgment in the consideration in this appeal is not in question. It would therefore follow that the classification approved initially of the products in question under Chapter 3808.10 was correct. No duty was payable in addition to what had already been paid and hence penalty not imposable.
4. Appeal allowed. Impugned order set aside. Consequential relief, if any.