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2022 (8) TMI 111 - AAR - CustomsClassification of imported goods - I-MAS POs, which is Nickel Hydroxide compound (containing 78% to 80% of Nickel Hydroxide, 2 to 2.5% of Cobalt Hydroxide & balance Graphite) - to be classified under the Tariff Entry 2825 40 00 or not - N/N. 50/2017-Customs, dated 30-6-2017 (Sr. No. 180) - HELD THAT:- Classification of imported goods is governed by the principles set forth in the General Rules of Interpretation (GIR). Rule 1 of GIR provides that for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions [that is, GIRs 2 to 6]. This is the first Rule to be considered in classifying any product. In other words, if the goods to be classified are covered by the words in a heading and the Section and Chapter Notes do not exclude classification in that heading, the heading would apply to the said goods. As required under Rule 1 of GIRs, the classification of the compound of Nickel Hydroxide is determinable according to the terms of heading and relative Chapter Note of Chapter 28 and these headings or Notes do not leave any ambiguity that proposed goods, which is a separately defined chemical compound, is aptly classifiable under HSN Code 2825 40 00 of Heading 28. As per the chapter notes to Chapter 28, separately defined chemical compounds would remain classified under Chapter 28, whether or not containing impurities. The Nickel Hydroxide, though containing cobalt and graphite in minor quantities, remains suitable for general use in manufacture of Nickel Cadmium batteries. The presence of cobalt and graphite does not render the product suitable for any different use or for a specific use - The additives are minor and do not change the nature or function of the compound; they enhance the performance and life cycle of the Nickel electrode. The formation of the electrically conductive network favourably impacts the utilization of the active material, which is Nickel Hydroxide. Thus, it is in terms of the Chapter Note 1 of Chapter 28 read with Rules 1, 2 and 3(a) of the GIR, the goods proposed to be imported i.e. I-MAS POS, consisting of Nickle Hydroxide (78-80%), Cobalt Hydroxide (2-2.5%), Graphite (12-18%) and moisture (2.8%) is classifiable under sub-heading 2825 40 00. The applicant has claimed that consequent to the classification of the impugned under sub-heading 2825 40 00 of the First Schedule to the Customs Tariff Act, 1975, the Nickle Hydroxide compound is also eligible to avail the benefit of Notification No. 50/2017, dated 30-6-2017 Entry Sr. No. 180 which covers ‘Nickel oxide and hydroxide’ classified under 2825 40 00 at nil rate of duty.
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