2025 (6) TMI 1443 - AT - Customs

Classification of imported goods - Quicklime (PCC Lime 0/20MM) - to be classifed under Customs Tariff Item No. 2522 1000 or under Customs Tariff ltem No. 2825 9090 under Section 17(4) of the Customs Act 1962? - HELD THAT - A similar issue has been examined by this Tribunal in the case of M/s. JSW Steel Ltd. v. Commissioner of Customs Cochin 2025 (5) TMI 455 - CESTAT BANGALORE wherein the Tribunal observed that In the present case as discussed above the chemical analysis clearly states that the purity is only 92% and accordingly the product Quick Lime is rightly classifiable under CTH 2522 1000. Conclusion - Admittedly in the Bills of Entry filed the purity of Calcium Oxide is less than 98% and therefore the product in question i.e. Quicklime is rightly classifiable under Customs Tariff Item No. 2522 1000 following the decision in the case of M/s. JSW Steel Ltd. There are no merit in the impugned orders and accordingly the same are set aside - appeal allowed.

Summary

The core legal question considered by the Tribunal is the correct classification of the imported goods described as "Quicklime (PCC Lime 0/20MM)" under the Customs Tariff Act, 1962. Specifically, whether the product should be classified under Customs Tariff Heading (CTH) 2522 1000 (Quicklime) or under CTH 2825 9090 (Other inorganic chemicals), as assessed by the Customs authorities.

The Tribunal examined the issue of classification of quicklime based on the chemical composition and purity of the imported product, taking into account the relevant tariff headings, chapter notes, and the Harmonized System of Nomenclature (HSN) explanatory notes. The dispute arose because the assessing officer classified the goods under CTH 2825 9090, whereas the appellant contended that the goods fall under the more specific heading 2522 1000.

In addressing this issue, the Tribunal relied heavily on precedents, notably the decision in the case of M/s. JSW Steel Ltd. v. Commissioner of Customs, which dealt with the identical question of classification of quicklime. The Tribunal also referred to other relevant decisions including M/s. Viraj Profiles Ltd. and Bhadradri Minerals Pvt. Ltd., which clarified the applicability of HSN explanatory notes and the purity thresholds for classification under the respective tariff headings.

The relevant legal framework involves:

• Section 17(4) and 17(5) of the Customs Act, 1962, which govern classification and assessment of imported goods.
• The Customs Tariff Act, 1985, specifically Chapter 25 (Mineral Products) and Chapter 28 (Inorganic Chemicals).
• HSN explanatory notes, particularly those defining the scope and exclusions under headings 2522 and 2825.
• Interpretative Rules of Classification, which prioritize specific tariff headings over residuary entries.

The Tribunal's reasoning centered on the chemical purity of the product. The HSN notes under Chapter 28 specify that heading 2825 covers calcium oxide and hydroxide only in their pure state, approximately 98% or higher purity. Quicklime with purity below 98%, containing impurities such as iron oxide, manganese oxide, and clay, falls under Chapter 25, heading 2522. The product in question had a purity of approximately 92%, as established by chemical analysis reports from the Central Revenue Control Laboratory.

The Tribunal noted that Chapter 25 heading 2522 explicitly includes quicklime, slaked lime, and hydraulic lime, excluding purified calcium oxide and hydroxide, which are covered under Chapter 28. The product's calcined nature did not exclude it from classification under 2522 because the HSN notes permit classification under 2522 for quicklime that is not highly purified. The Tribunal emphasized that the classification must follow the specific heading (2522 1000) rather than the residuary entry (2825 9090), unless the product meets the purity threshold for the latter.

The Tribunal distinguished the present case from decisions relied upon by the Revenue, such as the Advance Ruling Authority's decision in the Lhoist India case, noting that the facts were materially different and that the ruling did not consider the relevant chapter note 11 under chapter 28. The Tribunal also rejected reliance on older Central Excise decisions that were not aligned with the HSN-based Customs Tariff.

Competing arguments from the Revenue centered on the product being a calcined chemical and thus falling under Chapter 28. The appellant argued that the product's chemical composition and impurity levels excluded it from Chapter 28 and brought it within Chapter 25. The Tribunal gave precedence to the chemical purity test results and the HSN explanatory notes, concluding that the appellant's classification under 2522 1000 was correct.

In conclusion, the Tribunal held that the imported goods "Quicklime" with calcium oxide purity less than 98% are classifiable under Customs Tariff Item 2522 10 00 and not under 2825 90 90. The impugned orders of the lower authorities were set aside, and the appeals were allowed with consequential relief.

Significant holdings include the following verbatim excerpt from the Tribunal's reasoning:

"Based on the above Tariff Headings and the Explanation given in the HSN Notes, it is very clear that 'Quick Lime' is classifiable under CTH 2522 unless the chemical analysis proves that it has purity of 98% calcium oxide. Admittedly, in the present case, the purity is only 92%. Moreover, there is a specific classification of the product 'Quick Lime' under CTH 2522 1000 while the classification prompted by Revenue is 2825 9090 is only a 'Residuary Entry', and taking into consideration the Interpretative Rules of Classification, specific heading is to be preferred to the residuary entry unless it is established that the product is pure calcium oxide."

Core principles established by the Tribunal are:

• The purity of calcium oxide is determinative for classification between Chapter 25 and Chapter 28.
• Products with calcium oxide purity less than 98% fall under Chapter 25, heading 2522 1000 (Quicklime).
• Interpretative rules of tariff classification mandate preference for specific headings over residuary or general headings.
• HSN explanatory notes are authoritative in interpreting tariff headings and exclusions.
• Decisions rendered in contexts not aligned with the HSN-based Customs Tariff (e.g., pre-HSN Central Excise decisions) are not binding.

Final determinations on the issue are:

• The imported goods described as "Quicklime" with calcium oxide purity approximately 92% are correctly classifiable under Customs Tariff Item 2522 10 00.
• The classification under Customs Tariff Item 2825 90 90 by the assessing officer and confirmed by the Commissioner (Appeals) is set aside.
• The appeals are allowed with consequential relief as per law.