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TMI Blog2024 (2) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... and that it occurs last among other classification under heading 2522 is not legally sustainable. Thus, we find that there is no case for application of Rule 3 of GIR in this case. Hence, we are of the prima facie view that the imported goods are appropriately classifiable under CTH 2522 10 00. We also find that our above views is duly supported by the Order of the Tribunal in the case of Collector of Central Excise, Chandigarh Vs. Nuchem Ind. (P) Ltd [ 1998 (9) TMI 186 - CEGAT, NEW DELHI] which has also duly followed the judgement of the Hon ble Supreme Court in the case same assessee. We find that the chemical test report of the samples of imported goods indicate that the available CaO% of range 91.70% to 92.80% in the 28 consignments which correspond to total CaO% of 93.84% to 94.77%; Unburnt CaCO3 of range 3.00 to 3.72%; Co2 of range 1.34 to 1.58% along with few other impurities viz., SiO2 of range 0.93 to 1.24%; Al2O3 of range 0.28 to 0.34%; SO3 of range 0.17 to 0.80%; Iron Oxide of range 0.19 to 0.21% and MgO of range 1.17 to 1.44%. Thus, from the above chemical composition of the test results of imported goods, it can be concluded that it is mainly composed of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1975. We further find from the standards prescribed by the Bureau of Indian Standards (BIS) in respect of IS:1540 (Part-I):1980 providing the specification for Quick lime and Hydrated lime for chemical industries state in its scope of coverage of the BIS that this standard does not cover lime for the metallurgical industry, besides excluding its scope for other uses such as building, agricultural, glass and ceramic industries. Thus, we find that the IS:1540 is not applicable for the quicklime used in the manufacturing process of iron steel industry as in the present case. Thus, we conclude that the imported goods quicklime would be appropriately classifiable under Customs Tariff Item 2522 10 00 and not as other under the Customs Tariff Item 2825 90 90, as claimed by Revenue. Therefore, we are of the considered view that the impugned order passed by the learned Commissioner (NS-I), JNCH cannot stand for judicial scrutiny by confirming the classification under the Customs Tariff Item 2825 90 90 in respect of the impugned goods and thus, the same is set aside. We are also of the considered view that the impugned goods are correctly classifiable under Customs T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uick lime/calcined lime for industrial purpose, is a calcined product of the mined limestone, which have been roasted or calcined, and thus falls out of the purview of classification under chapter 25, and is rightly classifiable under CTI 2825 9090, attracting higher rate of import duties of BCD @7.5%, IGST @18% and SWS @10%. Accordingly, show cause proceedings were initiated by the department in issue of Show Cause Notice (SCN) dated 26.07.2021, for rejecting the classification claimed by the appellants under self-assessment and demanding the differential duty payable under Section 28(1) of the Customs Act, 1962 along with applicable interest. The Order-in-Original dated 06.12.2022 passed in this regard by the learned Commissioner of Customs (NS-I), JNCH, Nhava Sheva, Raigad confirmed the adjudged demands on the imported quicklime by rejecting the classification adopted by the appellants under CTI 2522 1000 and reclassifying the product under customs tariff item 2825 90 90, in respect of imports in 28 B/Es demanding the total customs duty of Rs. 94,08,830/- under Section 28(1) of the Customs Act, 1962 along with applicable interest thereon under Section 28AA ibid. Having been agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classifiable under CTH 28.25 is erroneous. By referring to its scope, he stated that the BIS standard does not cover metallurgical industries and the said standard merely prescribes different grades of quicklime. It does not provide any guidance on which grade of quicklime would be regarded as pure. In fact, the grades as specified in the standard are for different purposes as may be required by different industries. Thus, classification of imported goods cannot be made on this basis for classifying the same under CTH 2825. 3.5 He further submitted that the reliance placed by Revenue in the impugned order on the decision of the Authority of Advance Ruling in Lhoist India P. Ltd. Vs. Commissioner of Customs Central Excise, Bhubaneswar reported in 2008 (221) ELT 465 (AAR) is mechanical and misplaced. He submitted that as per Section 28 J of the Customs Act, 1962, Advance Ruling is binding only on the parties who are party to the said proceedings. 3.6 Thus, he stated that in view of the imported goods having been correctly classified by the appellants, the question of imposition of penalty and interest in this case does not arise. 4.1 Learned Authroised Representative ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Chapter Heading Notes, quicklime in crude state is classifiable in CTH 2522. Calcium Oxide is classifiable in the CTH 2825 and stated that CaO content in quicklime is determining factor of classification of quicklime. Since the CaO content is higher in the imported products, they are classifiable under CTH 2825. In view of the above, he prayed that the appeals filed by the appellant may be dismissed. 5. Heard both sides and perused the records of the case. 6. Brief issue for consideration before us is the classification of imported goods by the appellants and whether the same merits classification under Customs Tariff Item 2522 10 00 as claimed by the appellants; or, is it classifiable under Customs Tariff Item 2825 90 90 as contended by the Department, for deciding on the appropriate levy of customs duty, in respect of various Bills of Entries filed during the disputed period. 7. In order to address the above issue of classification of imported goods, we would like to refer the relevant legal provisions contained in Section 12 of the Customs Act, 1962; the Customs Tariff Act, 1975 and rules framed thereunder for consideration of proper and appropriate classification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. 3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is preceded by --- or ---- , the said article or group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has - or -- . 2. The abbreviation % in any column of this Schedule in relation to the rate of duty indicates that duty on the goods to which the entry relates shall be charged on the basis of the value of the goods as defined in section 14 of the Customs Act, 1962 (52 of 1962), the duty being equal to such percentage of the value as is indicated in that column. 3. In any entry, if no rate of duty is shown in column (5), the rate shown under column (4) shall be applicable. ADDITIONAL NOTES In this Schedule, (1)(a) heading , in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all sub-headings of tariff items the first four-digits of which correspond to that number; (b) sub-heading , in respect of goods, means a description in the list of tariff provisions accompanied by a six-digit number and includes all tariff items the first six-digits of which correspond to that number; (c) tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntext with the case in hand, we note that the following are some of the important rules to be followed in the scheme of determining correct classification of imported goods: (i) classification of goods shall be determined according to the terms of the headings and any relative Section or Chapter Notes; (GIR 1) (ii) reference to an article, shall also include such article in the incomplete or unfinished state, subject to the condition that article, as presented, has the essential character of the complete or finished article. Further, reference in a heading to a material or substance shall be taken to include mixtures or combinations of that material or substance with other materials or substances, and to goods consisting wholly or partly of such material or substance; (GIR 2) (iii) if the goods are found to be classifiable under two or more headings, then the classification shall be effected as per the rules provided under 3(a), 3(b) and 3(c) [GIR 3] (iv) Goods which cannot be classified in accordance with the aforesaid rules, then the same shall be classified under the heading appropriate to the goods to which they are more akin. (GIR 4) (v) For legal purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2522 10 00 - Quicklime Kg. 10% - 2522 20 00 - Slaked lime Kg. 10% - 2522 20 30 - Hydraulic lime Kg. 10% - Tariff Item Description of goods Unit Rate of Duty Standard Preferential Areas (1) (2) (3) (4) (5) Hydrazine and hydroxylamine and their inorganic salts; other inorganic bases; other metal oxides, hydroxides and peroxides 2825 10 - Hydrazine and hydroxylamine and their inorganic salts : 2825 10 10 --- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Antimony oxides Kg. 10% - 2825 90 - Other : 2825 90 10 --- Tin oxide Kg. 10% - 2825 90 20 --- Cadmium oxide Kg. 10% - 2825 90 40 --- Calcium hydroxide Kg. 10% - 2825 90 50 --- Ammonium hydroxide Kg. 10% - 2825 90 90 --- Other Kg. 10% - 10.1 From the above it could be seen that the description of the Chapter 25 covers Salt; Sulphur; earths and stone; plastering materials, lime and cement which are basically mineral products of Section V of the First Schedule to the Customs Tariff. However the description of chapter 28 covers inorganic chemicals; organic or inor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of CTH 2522, and only separate chemical elements or separate chemically defined compounds are covered under the scope of CTH 2825. 10.4 Further, it transpires from plain reading of GIR 2 and 3, that GIR 2(b) would apply for classifying goods so as to include mixtures or combination of a particular material or substance when found mixed or combines with other material. In attempting such classification of goods in terms of GIR 2(b), when one is confronted with classification under two or more contending headings, then GIR 3 would apply. As a general rule the heading that provides most specific description would be preferred to heading which provide a more generic description. However, if the goods cannot be classifiable by following GIR 3(a) or 3(b), then by applying GIR 3(c) classification of the product would be decided to bring it under the heading that occur last in the numerical order among those which equally merit consideration. In the present case, the facts reveal that the imported goods are quicklime. There is no case of mixture of different material or substance to merit application of GIR 2 or 3. Thus, the Revenue s argument for classification of quick lime under he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow: SECTION V MINERAL PRODUCTS CHAPTER 25 Salt; sulphur; earths and stone; plastering materials, lime and cement Notes: 1. Except where their context or Note 4 to this Chapter otherwise requires, the headings of this Chapter cover only products which are in the crude state or which have been washed (even with chemical substances eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallization), but not products which have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading. The products of this Chapter may contain an added anti-dusting agent, provided that such addition does not render the product particularly suitable for specific use rather than for general use. 2. This Chapter does not cover : (a) sublimed sulphur, precipitated sulphur and colloidal sulphur (heading 2802); (b) earth colours containing 70% or more by weight of combined iron evaluated as Fe2O3 (heading 2821); (c) medi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only covered under Chapter 25; (b) Mineral products which are subjected to certain specific process such as washing, crushing, grounding etc. (as specified therein) or other mechanical process or physical process would alone be covered under Chapter 25 (c) Mineral products after being subjected to certain processes by which these have become products that have been roasted, calcined are not covered under Chapter 25 (d) Mineral products which are obtained by mixing or subjected to processing beyond that mentioned in each heading is also not covered under Chapter 25 (e) When the context require, mineral product subjected to a particular process such as heating (as mentioned in heading 2517, as whether or not heated ) would still be covered under Chapter 25 (f) Mineral products which are subjected to certain specified process in Chapter Note 4 would still continue to be classified under Chapter 25. In respect of the present issue, the sub-clause (c) (e) above is applicable, and it could be concluded that calcined mineral product is not covered under Chapter 25 unless the context require and specify so for inclusion in Chapter 25. 12.3 In order to u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n classifiable under Chapter heading 2522. However, when the lime stone is subjected to high temperature calcination ranging as high as 1340 C, dissociation of limestone happens i.e., a general chemical process in which molecules (or ionic compounds such as salts, or complexes) gets separated or split into other things such as atoms, ions, or radicals, usually in a reversible manner. In simple words, it can be said that the mineral product quicklime when subjected to high temperature calcination becomes calcium oxide by eliminating carbon-dioxide (CO2) and such calcium oxide is not covered under Chapter 25, as these are chemical products classifiable under heading 2825. 13. We also find that our above views is duly supported by the Order of the Tribunal in the case of Collector of Central Excise, Chandigarh Vs. Nuchem Ind. (P) Ltd., reported in 1999 (105) E.L.T. 711 (Tribunal) which has also duly followed the judgement of the Hon ble Supreme Court in the case same assessee. The relevant paragraph of the above order is extracted below: 26. The present case concerns the same assessee and the same material for a later period. The Tariff Headings and the Chapter Note in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amine and their inorganic salts; other inorganic bases; other metal oxides, hydroxides and peroxides. 2825.10 - Hydrazine and hydroxylamine and their inorganic salts 2825.20 - Lithium oxide and hydroxide 2825.30 - Vanadium oxides and hydroxides 2825.40 - Nickel oxides and hydroxides 2825.50 - Copper oxides and hydroxides 2825.60 - Germanium oxides and zirconium dioxide 2825.70 - Molybdenum oxides and hydroxides 2825.80 - Antimony oxides 2825.90 Other This heading covers : (A) Hydrazine and hydroxylamine and their inorganic salts. (B) The metal oxides, hydroxides and peroxides of this Chapter not included in preceding headings. The most important products are : (1) Hydrazine and its inorganic salts . (2) Hydroxylamine and its inorganic salts XX XX XX XX (10) Berylium oxide and hydroxide. (a) Oxide (BeO). Prepared from beryllium nitrate or sulphate. White powder, insoluble in water; can be crystallised. Used for making beryllium salts, synthetic precious or semi-precious stones and as a catalyst. (b) Hydroxide (Be(OH)2). White powder resembling alumina in appearance. (11) Calcium ox ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.07.2019 92.40 94.52 3.34 1.47 0.97 0.29 0.29 0.19 1.30 2. 4675048 28.08.2019 92.44 94.34 3.27 1.44 1.13 0.34 0.20 0.21 1.27 3. 5213629 09.10.2019 92.61 94.63 3.16 1.39 0.93 0.28 0.22 0.18 1.39 4. 5928590 03.12.2019 92.80 94.77 3.06 1.35 0.98 0.29 0.17 0.19 1.36 5. 6375781 07.01.2020 91.78 94.11 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. 8012940 26.06.2020 92.60 94.72 3.27 1.44 1.00 0.30 0.17 0.19 1.32 15. 8364977 03.08.2020 92.40 94.37 3.06 1.35 1.21 0.30 0.38 0.20 1.34 16. 8522271 19.08.2020 92.10 94.36 3.59 1.58 1.04 0.28 0.40 0.19 1.32 17. 8938762 25.09.2020 92.30 94.54 3.50 1.54 1.00 0.22 0.28 0.19 1.52 18. 9428745 03.11.2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.38 0.18 1.21 27. 3168262 16.03.2021 92.60 94.63 3.20 1.41 0.95 0.28 0.38 0.19 1.32 28. 3673088 22.04.2021 92.70 94.65 3.03 1.34 1.17 0.28 0.38 0.20 1.24 We find that the chemical test report of the samples of imported goods indicate that the available CaO% of range 91.70% to 92.80% in the 28 consignments which correspond to total CaO% of 93.84% to 94.77%; Unburnt CaCO3 of range 3.00 to 3.72%; Co2 of range 1.34 to 1.58% along with few other impurities viz., SiO2 of range 0.93 to 1.24%; Al2O3 of range 0.28 to 0.34%; SO3 of range 0.17 to 0.80%; Iron Oxide of range 0.19 to 0.21% and MgO of range 1.17 to 1.44%. Thus, from the above chemical composition of the test results of imported goods, it can be concluded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter-State supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. S.No. Chapter / Heading / Sub-heading / Tariff item No. Description of Goods (1) (2) (3) xx xx xx 131. 2522 Quicklime, slaked lime and hydraulic lime, other than calcium oxide and hydroxide of heading 2825. xx xx xx We find that the above notification has prescribed the effective rate of Integrated Goods and Service Tax (IGST) that is payable on the imported goods as countervailing duty (CVD). Inasmuch as the imported goods are covered under the description quicklime and by the chapter heading 2522 there is irregularity in the claim of such exemption. Thus, we do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned goods and the decision given by the Authority for Advance Ruling in Lhoist India supra, apply only in respect of the applicant who had sought it and the related jurisdictional Customs authorities for that applicant, we do not find it necessary to examine these aspects in the present case. 18. We also find that on similar issue of classification of quick lime the Co-ordinate Bench of the Tribunal in the case Jindal Stainless (Hisar) Ltd. Vs. Commissioner of Customs, New Delhi, reported in 2020 (8) TMI 743 CESTAT-NEW DELHI had decided the appropriate classification of quick lime under chapter 25. The relevant paragraphs in the said order is extracted below: 4. We have gone through rival submissions. It is seen that the goods imported by the appellant have purity in the range 95-97% as stated in the SCN. Certificated produced by the appellant shows the range to be slightly below that. 4.1 The heading 2522 reads as following: 25.22- Quicklime, slaked lime and hydraulic lime, other than calcium oxide and hydroxide of heading 28.25. 2522.10- Quicklime It is seen that it specifically covers Quicklime under sub-heading 25 22.10. Chapter note 1 of cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lourless. It is used, in particular, for refractory linings for furnaces, in the manufacture of crucibles and for addition to concrete, in small pieces, to increase in resistance to water. Calcium peroxide (CaO) is a white or yellowish powder, hydrated (usually with 8 H2O) sparingly soluble in water. Used as a bactericide and as a detergent, in medicine and in the preparation of cosmetics. Quicklime (calcium oxide) and slaked lime (calcium Hydroxide) are excluded (heading 25.22) . In the instant case, it is not in dispute that what is imported has purity less than 98%. Therefore, the decision squarely applies to the facts of the case. 4.4 Revenue has relied on the Advance Ruling Authority given in the case of M/s Lhoist India Pvt. Ltd.(supra) wherein burnt lime having 9496% CaO was held to be classifiable under chapter heading 2825. The facts in the said case were significantly different. The said decision has been passed without taking note of chapter note 11 to chapter 28. Moreover, in the said decision, Hon ble Justice PV Reddy chairman of the authority has observed as follows: 22. This is perhaps a rare case in which the applicant has come forward to p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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