2024 (9) TMI 846 - AT - Customs

Classification of imported goods - Quick Lime - to be classified under Customs Tariff Heading (CTH) 2522 1000 of the Customs Tariff Act, 1975 or under CTH 2825? - Levy of interest - HELD THAT - The issue as to whether Quick Lime would be classifiable under CTH 2522 or CTH 2825 stands decided by the Delhi Bench of the Tribunal in the case of M/S. JINDAL STAINLESS (HISAR) LTD. VERSUS COMMISSIONER OF CUSTOMS NEW DELHI 2020 (8) TMI 743 - CESTAT NEW DELHI wherein the Bench has held 'The ratio of decisions of Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, HYDERABAD-III VERSUS M/S BHADRADRI MINERALS PVT. LTD. 2015 (10) TMI 1836 - CESTAT BANGALORE is applicable to the facts of the instant case where it was held that 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 only.' Thus, Quick Lime is classifiable under CTH 2522 1000, as contended by the appellant, and not under CTH 2825, as is being canvassed by the Revenue. Levy of interest - HELD THAT - Admittedly, the Customs Duty and interest had been paid by the appellant during April and May 2018 whereas the instant Show Cause Notice was issued on 29.03.2019. Therefore, this has to be taken as an amount deposited in the course of investigation . Since it has now been held that the goods are to be classified under CTH 2522 only, the amounts so paid by the appellant to the Revenue are not to be retained by them and are required to be refunded to the appellant, along with interest - In the cited case-law of M/S. INDORE TREASURE MARKET CITY PVT LTD. VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX AND CENTRAL EXCISE, INDORE 2024 (2) TMI 372 - CESTAT NEW DELHI and M/S. PARLE AGRO PVT. LTD. VERSUS COMMISSIONER, CENTRAL GOODS SERVICE TAX, NOIDA (VICE-VERSA) 2021 (5) TMI 870 - CESTAT ALLAHABAD , the Delhi and Allahabad Benches of the CESTAT have held that in case of refund of an amount paid during the investigation stage, the Revenue is required to pay interest at the rate of 12%. Appeal disposed off.

Summary

Issues:
1. Classification of imported Quick Lime under Customs Tariff Heading 2522 or 2825.
2. Payment of duty "under protest" before Show Cause Notice issuance.
3. Adjudication confirming demand, penalty imposition, and appeal before the Tribunal.
4. Applicability of previous Tribunal and Supreme Court decisions on similar issues.
5. Refund of Customs Duty and interest paid by the appellant.

Analysis:
1. The appellant imported Quick Lime and classified it under Customs Tariff Heading (CTH) 2522 1000, but the Department issued a Show Cause Notice claiming it should be classified under CTH 2825. The appellant paid the duty demanded "under protest" before the Notice was issued. The appellant litigated the issue, but the adjudicating authority confirmed the demand, penalty, and appropriation of the amount paid.
2. The appellant cited previous Tribunal decisions in similar cases, including Jindal Stainless (Hisar) Ltd. and Viraj Profiles Ltd., where the goods were classified under Chapter 25. The appellant argued that the Supreme Court upheld the Tribunal's decisions, supporting their classification under CTH 2522.
3. The Tribunal examined the issue and relied on the decisions in Jindal Stainless (Hisar) Ltd. and Viraj Profiles Ltd. to classify Quick Lime under CTH 2522 1000, not CTH 2825. The Tribunal allowed the appeal on merits and directed the Revenue to refund the Customs Duty and interest paid by the appellant, along with 12% interest from the date of deposit.
4. Following the precedent set by previous Tribunal and Supreme Court decisions, the Tribunal held that Quick Lime should be classified under CTH 2522 1000. The Tribunal ordered the refund of Customs Duty and interest paid by the appellant, along with 12% interest from the date of deposit until the refund is granted.