2024 (1) TMI 1294 - AT - Customs

Classification of imported goods - Apatite (Ground) Calcium Phosphate / Natural Calcium Phosphate - classifiable under CTH 25102030 or under CTH 28352690? - levy of differential import duties interest and penalties - HELD THAT - The product is admittedly natural and not calcined and as such being mere mineral and accepted by the Customs department for previous period as well as all subsequent imports into India should be therefore correctly classified under CTH 2510 as claimed by the Appellant and not under CTH 2835. No doubt any chemically precipitated calcium phosphate would be classifiable under CTH 2835 however for that purpose it would be required to be shown that the end product has traces or characteristics of a product obtained by treating tricalcium phosphate contained in bones first with hydrochloric acid and then sodium hydroxide or by precipitating a solution of trisodium orthophosphate by means of calcium chloride in presence of Ammonia as also evident as per Explanatory Notes to HSN for Tariff Heading 2835. Admittedly the goods in question were found to be natural and not precipitated in the re-test. There is nothing on record to suggest that the goods were not natural Calcium Phosphate or Apatite Calcium Phosphate which require to be classified under CTH 2510 alone being the most specific classification based on description as per General Rules of Interpretation for Tariff. Since on merits of the issue the product is found classifiable under CTH 2510 itself and the demand therefore must fail it is not deemed necessary to deal with various other averments raised by the Appellant. The impugned orders are quashed and set aside - Appeal allowed.

Summary

Issues involved:
The classification of imported goods under CTH 25102030 or CTH 28352690, imposition of penalties u/s 112(a), 112(b), 114A, 114 AA, and 117 of the Customs Act.

Classification dispute:
The appeal revolves around the correct classification of "Apatite (Ground) Calcium Phosphate / Natural Calcium Phosphate" imported by the Appellant under CTH 25102030 or CTH 28352690. The differential import duties and penalties were imposed based on this classification issue.

Appellant's arguments:
The Appellant argued that previous goods from the same supplier were classified under CTH 2510 2030, and subsequent re-tests confirmed the natural state of the product, supporting classification under CTH 2510. They emphasized that the product was not calcined and should be classified as per Chapter Notes and HSN Explanatory Notes.

Supplier's responsibility:
The onus to classify goods was placed on the importer, and the overseas supplier correctly mentioned details on their documents. The argument was made that no penalty should be imposed on the supplier in this scenario.

Revenue department's stance:
The Deputy Commissioner reiterated the findings of the impugned order, stating that the product underwent a process that rendered it calcined, thus falling outside the scope of CTH 2510.

Judgment and analysis:
The Tribunal analyzed the past classification dispute and re-test reports, concluding that the goods were natural and not synthetic or calcined. They relied on Chapter Notes and Explanatory Notes to determine that the goods should be classified under CTH 2510. The UK Tariff Ruling and technical evidence further supported this classification.

Final decision:
The impugned orders were quashed, and the appeals were allowed with consequential relief, as the product was found to be correctly classified under CTH 2510 as a natural mineral, and penalties were not warranted based on the classification.