2024 (4) TMI 81 - AT - Customs

Classification of imported goods - quicklime - to be classified under tariff item 2522 1000 of First Schedule to Customs Tariff Act, 1975 or under tariff item 2825 9090 of First Schedule to Customs Tariff Act, 1975? - concessional rate of basic customs duty (BCD) vide N/N. 50/2017-Cus dated 30th June 2017 (at serial no. 120) and of integrated goods and service tax (IGST) vide rate N/N. 01/2017-Integrated Tax dated 28th June 2017 - HELD THAT - Besides the appropriateness of logic claimed as justification for revision of classification by adjudicating authority, which fails in the light of decisions supra, the impugned order relies on ruling by an Authority which does not bind the appellant herein or the Tribunal. It is also found inappropriate that the adjudicating authority has chosen to denigrate the findings of an appellate authority which is only in the domain of constitutional courts, for discarding the plea of precedent in rulings of the Tribunal in COMMISSIONER OF CENTRAL EXCISE, HYDERABAD-III VERSUS M/S BHADRADRI MINERALS PVT. LTD. 2015 (10) TMI 1836 - CESTAT BANGALORE and in M/S. JINDAL STAINLESS (HISAR) LTD. VERSUS COMMISSIONER OF CUSTOMS NEW DELHI 2020 (8) TMI 743 - CESTAT NEW DELHI and suffices to set aside the impugned order. It is found that the benchmark of purity, as settled by above decisions, was not attained at the time of import of the impugned goods. Further, the elaborate and detailed discussion in M/S VIRAJ PROFILES LIMITED VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , MUMBAI 2023 (10) TMI 1260 - CESTAT MUMBAI resolves the controversy, once and for all, on heading 2522 of First Schedule to Customs Tariff Act, 1975 being the correct one. The impugned order set aside - appeal allowed.

Summary

Issues Involved:
1. Classification of imported 'quicklime' under the appropriate tariff heading.
2. Applicability of concessional rate of basic customs duty (BCD) and integrated goods and service tax (IGST).
3. Validity of the adjudicating authority's reliance on certain rulings and their interpretation of the Explanatory Notes.

Summary:

1. Classification of Imported 'Quicklime':
The appellant, M/s Mukand Limited, imported 'quicklime' and classified it under tariff item 2522 1000, claiming concessional rates of BCD and IGST. Customs authorities, however, argued for classification under tariff item 2825 9090, citing the product's chemical composition and purity. The Tribunal referenced previous decisions, including *Jindal Stainless (Hissar) Ltd v. Commissioner of Customs, New Delhi* and *Viraj Profiles Limited v. Commissioner of Customs (Preventive), Mumbai*, which established that quicklime with less than 98% purity should be classified under heading 2522. The Tribunal concluded that the imported 'quicklime' did not meet the purity benchmark for classification under heading 2825.

2. Applicability of Concessional Rates:
The appellant claimed concessional rates under notification no. 50/2017-Cus and 01/2017-Integrated Tax. The Tribunal found that the impugned goods fit the description under heading 2522, and thus, the appellant was entitled to the concessional rates. The Tribunal emphasized that the classification should be based on the state of the goods at the time of import, not after deployment in production.

3. Validity of Adjudicating Authority's Interpretation:
The Tribunal criticized the adjudicating authority for relying on rulings that do not bind the appellant or the Tribunal and for misinterpreting the Explanatory Notes. The Tribunal noted that the adjudicating authority's attempt to denigrate the findings of appellate authorities was inappropriate and beyond their jurisdiction. The Tribunal set aside the impugned order, stating that the purity benchmark was not met at the time of import and reaffirmed that heading 2522 was the correct classification for the imported goods.

Conclusion:
The Tribunal allowed the appeal, setting aside the impugned order and confirming the classification of 'quicklime' under heading 2522, thereby entitling the appellant to the claimed concessional rates of BCD and IGST.