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TMI Blog1998 (12) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... Sharma, learned DR. The appellants are manufacturers of different grades of coated and uncoated Precipitated Calcium Carbonate which are sold by them to various manufacturers of tooth-paste, tooth-powder, cosmetics etc. The process adopted by the appellants is as under : 'The basic raw material is limestone which is produced from quarries. First limestone is washed with water to remove surface dust and other siliceous matter. It is then subjected to crushing and screening to remove fine particles of dust and mud. The washed and crushed limestone is fed into kilns where it is burnt at 1400C for transformation into quick lime (calcium oxide). This quick lime is reacted with tubewell water in the reacting vessel to obtain crushed dioxide slaked lime. In the next stage, the carbon dioxide which had been driven out during the burning process is passed through Calcium hydroxide to result in precipitated calcium carbonate (carbonation process). The material which is in a slurry form is centrifuged/filtered and dried in semi or direct heat driers to obtain the finished product in which the particles size is generally 2 to 3 microns. The dried product is packed and stitched in laminated b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants to Precipitated Calcium Carbonate amounts to manufacture, let us now examine the classification thereof. 4. The process of manufacture can be represented by the following Flow chart : "(i) Limestone .....................(In Kiln)Hydration CaO + Co2(Quick Lime) (ii) CaO + H2O(Quick Lime) .....................(Water) Ca (OH)2Hydrated/Slaked Lime Carbonation (iii) Ca(OH)2 + Co2 (Slaked Lime + Carbon dioxide gas ...................... CaCo3 + H2O" From the above, it appears that the product is manufactured by process of Chemical transformation wherein the mineral limestone, besides being subjected to process of washing and crushing, is also subjected to the process of calcination, hydration and carbonation to obtain Calcium Carbonate confirming to standard specification. The product in dispute is a chemically defined compound. Therefore, the process of manufacture has gone beyond the purview of Note 2 to Chapter 25 and the product is an outcome of various chemical/physical processes which are not covered by Note 2 to Chapter 25, which sets out that : "Except where their context otherwise requires, Heading Nos. 25.01, 25.03 and 25.05 cover only products which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above extracts, it is clear that Precipitated Calcium Carbonate produced by the appellants herein is not a product which is either occurring in nature or processed by application of physical processes but is produced by a process of chemical transformation resulting in a separate commercially defined compound. 7. The learned Counsel for the appellants refers to note 1(a), (g) and (h) and submits that only certain types of mineral products have been excluded from the purview of Chapter 25 and since Precipitated Calcium Carbonate which according to the appellants, is nothing but precipitated chalk, is not specifically excluded, it will remain under Chapter 25. However, this contention is not correct - Note 1(a) to Chapter 25 excludes Sublimed sulphur, precipitated sulphur, colloidal sulphur, earth colours, containing 70 per cent or more by weight of combined iron of Chapter 28. It is clear that sublimed sulphur or precipitated sulphur which is used 99.0-5% pure is obtained by chemical processing is excluded from Chapter 25 and classified under Chapter 28. Similarly, billiard chalk [1(g)] or Writing or Drawing chalk or Tailor's chalk which has a specific use. [1(h)] are exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. No. 1 would also cover substances which are recognised in literature as minerals although they may not be in naturally occurring state. It is relevant to note that the issue of classification of precipitated silica was not material for the purpose of considering the eligibility of that item to the benefit of notification in question. This is brought out from Para 25 of the order wherein the Tribunal has held that for the purpose of Notification No. 23/55, it is not necessary that the substance should be classified under Tariff Item 14 of CET because the Notification does not refer to the tariff item under which the substance should fall, in order to become eligible for exemption and what is necessary is that the substance should be known to be employed either as extenders, suspending agents or fillers or as diluents. The Tribunal has held that since precipitated silica (synthesized silica) was used as filler and extended as seen from technical literature, it was covered by Sl. No. 1 of the table annexed to the Notification 23/55. In the present appeal, however, the issue revolves around the classification of the product. 10. The learned Counsel also relies upon Chapter on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... water is not in the pure state and contains ingredients such as manganese oxide, silica, iron and metalic impurities and therefore, such calcium hydroxide would not be covered by Heading 28.25. This submission is not tenable - sub-heading 2836.50 of the HSN covers Calcium Carbonate and Explanatory Note 4 explains that precipitated Calcium carbonate (CaCo3) included in this heading results from treatment of solutions of calcium salts with carbon dioxide. Since the appellants treats calcium oxide with carbondioxide precipated calcium carbonate produced by the appellants is correctly covered by Chapter 28 of the HSN which excludes natural limestone (Chapter 25) and Chalk (Natural Calcium Carbonate) and Calcium Carbonate in powder form, the particles of which are coated with a water repellant film of fatty acids (stearic acid) (Heading 3823). Similarly, since Note 2 to Chapter 28 of the CETA, 1985 covers Carbonate of inorganic bases, the product in question being obtained from Calcium oxide which is of inorganic basis, is covered by Heading 2836 of the Schedule to the Central Excise Tariff Act, 1985 even though Calcium Hydroxide arises as an intermediate product in the process of manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. It is true that this book also shows that "precipitated calcium carbonate is one of the most versatile 'mineral fillers' and is consumed in a wide range of products". At the same time on the very next page this Book indicates as follows :- "Manufacture & Processing Precipitated calcium carbonate can be produced by several methods but only the carbonation process is commercially used in the United States today." Therefore the fact that item is called as 'ineral filler' and is described as such even in the Book called 'Modern Plastics Encyclopedia' wherein it is mentioned that the under heading 'mineral fillers' as Calcium carbonate; but it is also significant that this is followed by the words 'or ground limestone' and another example is that of talc. Again under the heading 'Mineral fillers' Joseph R. Copeland mentions that "Minerals, historically, have been referred to as fillers and extenders." 22. All this shows that precipitated calcium carbonate is being treated as mineral fillers because it is derived from a mineral and it is, in this sense, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as mineral in its own right but only as a chemical product. 27. It cannot be excluded from Chapter 28 merely because the process of manufacture adopted by the appellants is different from the one referred to in HSN and some other technical literature as the Chapter does not confine itself to any particular process. 28. In so far as Chapter Note 2 of Chapter 25 is concerned, our attention has been drawn towards the words 'roasted' and 'calcined'. However, what has been lost sight of is that these words have been used with reference to the 'product' that has been roasted or calcined or obtained by mixing etc. In the present case, it is the raw material limestone which is being roasted and calcined and not the product-precipitated chalk (coated/uncoated). 29. The learned Counsel is correct in drawing the attention to the fact that lime has been included in 25.05. But in view of the above facts and circumstances, it does not advance the appellant's cause. 30. Ld. DR is correct in pointing out that all forms of calcium carbonate or chalk are not covered by Chapter 25 as Billiard chalks of Chapter 95 and writing or drawing chalks and tailor's chalks of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther" i.e., other than these mentioned in the preceding sub-heading but it does not distinguish between coated and uncoated varieties. 36. Again Chapter 38 covers 'Miscellaneous chemical products' and even under that title 38.23 is only a residuary entry which is required to be applied only in respect of miscellaneous chemical products not elsewhere specified and falling in one of the categories indicated therein. 37. Once we have held that precipitated calcium carbonate (precipitated chalk) falls under Chapter 28, we cannot take recourse to 38.23 merely because HSN excludes the coated variety from the former as there is no indication in our Tariff to this effect. 38. It is ordered accordingly. Sd/-(S.K. Bhatnagar)Vice President POINT OF DIFFERENCE 39. In view of difference of opinion between Hon'ble Member (Judicial) and the Vice President, the matter is submitted to Hon'ble President for referring it to a Third Member on the following point :- "Whether coated variety of precipitated calcium carbonate (precipitated chalk) was classifiable under 3823.00 or 2836.90." Sd/-(Jyoti Balasundaram)Member (J) Sd/-(S.K. Bhatnagar)Vice President DIFFERENCE OF OPI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. Member (J). The appellants have advanced no arguments against the classification of coated variety under Heading No. 3823 of the Tariff. They had stated as under :- "The basic issued involved in the above appeal was about the un-coated Calcium Carbonate which would fall under Heading 2836.90 as claimed by the Department and under Chapter Heading 2505.90 as claimed by the appellant. Both the Hon'ble Members who heard the original appeal had held that the un-coated Calcium Carbonate in question would fall under Heading 28.36 and thus, both the Hon'ble Members had unanimously decided this point against the appellants. In respect of the coated variety, the Hon'ble Member (judicial) has decided the classification under Heading 38.23. The Hon'ble Vice President has, however, classified under Heading 28.36. Even here both the Hon'ble Members have not accepted the appellants' claim under chapter 25. This is even on coated variety. Though, both the members have indicated differing classifications, both are against the appellants since the appellants have claimed classification under Chapter 25 has been rejected. The rate of duty between Headings 28.36 and 38.23 is practically uniform ..... X X X X Extracts X X X X X X X X Extracts X X X X
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