2015 (10) TMI 1836 - AT - Central Excise

Classification of Burnt Lime - Raw lime stone is burnt along with coal in a vertical shaft kiln. - whether Burnt Lime manufactured by the respondent is classifiable as Calcium Oxide under CTH 2505.00 or not - Held that - In the Tariff description, it is not specified Burnt Lime . Lime includes Burnt Lime also. In fact, it includes all types of limes. It is to be noted that Tariff heading as it reads now does not have specific heading for Burnt Lime, Calcium Hydroxide, etc. - What is covered by Chapter 28.25 is Calcium Oxide which of 98% purity or more. Admittedly in this case, the purity of the burnt lime is 70 to 75% only. Therefore, in view of the Board s Circular as well as HSN Explanatory Note, the product manufactured by the respondent has to be classified under CTH 25.05 only. From the raw materials used, the process employed or the parameters of the resultant product show that the Burnt Lime manufactured by the respondent is not classifiable under CETH 28.25. Hon ble Supreme Court has already held in the case of Commissioner of Central Excise, Shillong vs. Wood Craft Products Ltd. 1995 (3) TMI 93 - SUPREME COURT OF INDIA that HSN Explanatory Note can be used as a guide to resolve dispute relating to tariff classification and in this case, HSN Explanatory Notes as well as Board s Circular clearly support the stand taken by the respondent. Moreover, lime is specifically mentioned under Chapter heading 28.25 and lime is general description and therefore, it can be said to cover Burnt Lime . - impugned order does not require any interference - Decided against Revenue.

Summary

Issues Involved:
Classification of Burnt Lime as Calcium Oxide under CETH 2505.00 for Central Excise duty exemption.

Analysis:
The case revolved around the classification of Burnt Lime manufactured by the respondent under CETH 2505.00 for Central Excise duty exemption. The respondent claimed that their product should be classified as Calcium Oxide under this heading and hence exempt from duty. The dispute arose when the Revenue demanded a significant amount of duty from the respondent for the goods cleared over a specific period. The central issue to be decided was whether Burnt Lime could be classified as Calcium Oxide under CETH 2505.00. The respondent argued that their product, chemically Calcium Oxide after burning, fell under this classification. The Commissioner considered the respondent's claim and relied on a Board's Circular dated 10.7.1991, which clarified the classification of Burnt Lime under sub-heading 2505.60 of the schedule to CET Act, 1985.

The Commissioner also referred to the HSN Explanatory Note under Tariff Heading 28.25, which excluded Calcium Oxide with purity less than 98% from Chapter 28. The Chapter Note post-20.3.1990 specified that heading Nos. 25.01, 25.03, and 25.05 covered only products processed in specific ways, excluding those obtained through calcination. The department contended that since the raw materials were calcined to produce Burnt Lime, it could not be classified under Chapter 25. However, the Commissioner disagreed, citing the presence of the phrase "except where their context otherwise requires" in the Chapter Note.

The Tribunal analyzed the Tariff description and noted that while it did not specify "Burnt Lime" separately, it encompassed all types of limes. The department argued that Chapter 28.25 covered chemically defined compounds, but the purity of the burnt lime in this case was 70 to 75%, below the required 98% for Chapter 28.25. The Tribunal relied on the HSN Explanatory Note and the Board's Circular to support the respondent's classification under CETH 25.05. Additionally, the Tribunal referenced a Supreme Court case that allowed using the HSN Explanatory Note as a guide for tariff classification disputes.

Ultimately, the Tribunal upheld the impugned order, rejecting the Revenue's appeal. They concluded that the Burnt Lime manufactured by the respondent should be classified under CETH 25.05 as Calcium Oxide, in line with the Board's Circular and HSN Explanatory Note, which supported the respondent's position. The Tribunal emphasized that the general description of lime under Chapter heading 28.25 covered Burnt Lime as well, further solidifying their decision.