1991 (1) TMI 392 - AT - Central Excise

Summary

Issues:
Classification of 'Burnt Lime' under Chapter Heading No. 25.05 of CET Act, 1985.

Detailed Analysis:
The Collector of Central Excise confirmed a duty demand and imposed a penalty on the appellants for allegedly misclassifying 'Burnt Lime' under Rule 28 of the CEA, 1985 to evade Central Excise duty. The appellants used the product as a fluxing agent in their steel melting shop. The Collector found them in contravention of Central Excise Rules for not paying duty, filing price lists, and observing formalities. The primary issue in the appeal was the classification of 'Burnt Lime' under Chapter Heading No. 25.05 of the CET Act, 1985.

The appellants argued that the product should be exempted under Note 2 of Chapter 25 as it undergoes a process of roasting and calcination. They provided details of the calcining process, showing the transformation from calcium carbonate to calcium oxide by removing carbon dioxide. They contended that the product falls outside Chapter 25 as it is roasted and calcined. They referenced a previous case where a similar product was exempted under Note 2 of Chapter 25, supporting their argument. The Tribunal agreed with the appellants, holding that 'Burnt Lime' is excluded from Chapter 25 by virtue of Note 2, as products obtained by roasting, calcination, or mixing are not covered. Therefore, the impugned order was set aside as unsustainable.

In conclusion, the Tribunal ruled in favor of the appellants, stating that 'Burnt Lime' is excluded from Chapter 25 of the CET Act, 1985 under Note 2 due to the roasting and calcination process it undergoes. The judgment emphasized the importance of considering specific notes and processes in the classification of products for excisability and dutiability.