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2015 (9) TMI 880 - SUPREME COURT

2015 (9) TMI 880 - SUPREME COURT - 2015 (324) E.L.T. 14 (SC) - Classification of the product manufactured - Calcined China Clay - Classification under Chapter sub-heading 3824.90 or under Chapter Heading 25.05 - Held that:- After mentioning the products, there is again an exclusion clause which excludes the products that have been roasted, calcined or obtained by mixing. Calcination was excluded there as well. However, when this Head Note is contrasted with Head Note 2 which was introduced in th .....

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as Kaolin as well and the process of Kaolin is same as that of china clay. Here the Kaolin is included under Entry 2505.10, i.e., under Chapter Heading 25.05, even when it is calcined. Therefore, it follows from the above that the context here requires such a product to remain included under Chapter 25.05 even when it is calcined. - merely because the product of assessee, i.e., China Clay is calcined, it would not put it out of Chapter Heading 25.05. - order of the CESTAT without any blemish and .....

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Lakshmikumaran, Adv. ORDER The question that arises for consideration in the instant appeal relates to the classification of the product manufactured by the respondent-assessee which is known as "Calcined China Clay". According to the Revenue, it needs to be classified under Chapter sub-heading 3824.90 to the Schedule to Central Excise Tariff Act, 1985, whereas the assessee maintains that the appropriate classification is under Chapter Heading 25.05. In the show cause notice dated 16.0 .....

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ndergo a number of processes, either physical or with use of chemicals like sulfuric acid and magnetic separators for removal of foreign materials and the assessee had also introduced calcination process according to which the temperature was raised from 700 degree centigrade to 1200 degree centigrade to the cake lumps/ powder of China Clay. The emphasis, thus, was on the calcination of China Clay, which according to the Commissioner, made it a different product. For this purpose, a reference wa .....

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have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading or sub-heading." As per the Revenue, the aforesaid Note covers various products but specifically excludes those products which have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each Heading or sub-heading. It was on this basis, the show cause notice mentioned that since the product in question was calcined, it no longer be covered .....

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e in dentistry. 2505.10 Kaolin and other kaolinic clays, whether or not calcined; other clays, andalusite, kyanite and sillimanite, whether or not calcined; mullite; chamotte or dinas earths." "38.24 Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere spe .....

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s plea that the product was rightly classified under Chapter Heading 25.05 by the assessee. The contention of the assessee was not accepted by the Commissioner who passed the Order-in-Original confirming the demand made in the Show Cause Notice. The assessee preferred appeal against the said Order of the Commissioner and the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'CESTAT') has allowed the said appeal thereby accepting the plea of the respondent-ass .....

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not be included in Chapter Heading 25.05. The aforesaid contention is rejected by the CESTAT, and in our opinion, rightly so. In order to appreciate the reasons given by the CESTAT, we may have to address the history of Chapter 25, i.e., the provision which prevailed before the provision in question came into existence in 1990. Before the new provision was introduced in 1990, the same Chapter 25 which dealt with these very products contained different Head Note 2. This provision which remained i .....

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e, after mentioning the products, there is again an exclusion clause which excludes the products that have been roasted, calcined or obtained by mixing. Calcination was excluded there as well. However, when this Head Note is contrasted with Head Note 2 which was introduced in the year 1990, we find significant addition of words in the beginning of the said Note which are "except where the context otherwise requires". Therefore, the exclusion of calcination would not apply in respect of .....

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he above that the context here requires such a product to remain included under Chapter 25.05 even when it is calcined. We find that the amended/ new provision in the form of Chapter Note 2 as well as Entry 25.05 was made to bring it in tune with HSN Notes which have been produced for our perusal. Chapter Note 1 of Chapter 25 of HSN Notes, which deals with mineral products is as under: - "1. Except where their context or Note 4 to this Chapter otherwise requires, the headings of this Chapte .....

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