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M/s. 20 Microns Ltd. Versus CCE & ST, Chennai

2016 (1) TMI 525 - CESTAT CHENNAI

Classification of chemically coated micronized minerals and Red-oxide power - Revenue classified the chemically coated micronized minerals under Chapter sub-heading 3824.90 and Red-oxide power under Chapter Sub-heading 2821.10 of CETA, 1985 - Assessee classified the same under Chapter 25.05 of CETA - Held that:- Chapter note specifically covers products which are in the primary form which are crushed, ground, powdered, levigated, sifted, screened, or concentrated by flotation, magnetic separatio .....

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nerals which has undergone the process beyond the processes mentioned in Chapter note 2 of Chapter 25. Therefore, by virtue of chapter note, the micronized minerals are chemically coated products which has undergone the process beyond the process mentioned in Section note 2 or chapter 25 of CETA. Therefore, the goods are rightly excluded from Chapter 25. - As regards classification of red oxide the appellant classified it under Chapter 25.05 and the department re-classified it under chapter .....

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and of duty confirmed - Confiscation, fine and penalties are set aside. - Decided partly in favor of assessee. - E/731/2007 - FINAL ORDER No. 40047 / 2016 - Dated:- 4-1-2016 - Shri R. Periasami, Technical Member And Shri P.K. Choudhary, Judicial Member For the Petitioner : Shri J.C. Patil, Adv. For the respondent : Ms. Indira Sisupal, AC (AR) ORDER Per: R. Perisasami The present appeal is arising out of the OIO dated 28.06.2007 passed by the Commissioner in denovo proceedings. 2. The brief facts .....

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issued SCN and classified the chemically coated micronized minerals under Chapter sub-heading 3824.90 and Red-oxide power under Chapter Sub-heading 2821.10 of CETA, 1985 and on adjudication the adjudicating authority confirmed the demand of duty of ₹ 1,40,14,482/- being the duty not paid on clearance of chemically coated micronized minerals during the period 01.11.96 to 01.08.99 and confirmed the demand of duty of ₹ 10,51,098/- being the duty not paid on clearance f red oxide during .....

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I dated 09.06.2005, remanded the case to the adjudicating authority. The adjudicating authority in the impugned denovo order classified the chemically coated micronized minerals under Chapter sub-heading 3824.90 and confirmed the demand of ₹ 2,02,204/- for normal period (July, 99) and dropped the demand for the extended period. He classified the Red-oxide power under Chapter Sub-heading 2821.10 of CETA, 1985 and confirmed the demand of ₹ 1,97,723/- and also demanded duty of ₹ 1 .....

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ths period and also imposed fine and penalty. The department classified all these minerals under 3824.90. He also submits that these products are coated and he drew attention to the process of manufacture given at page 117 and also he drew attention to the flow chart enclosed at page 185 and also drew attention to the expert opinion in annexure-6 at page 367 and submits that adding a coating agent of 0.1% to 0.5% which is steric acid and titanium coupling does not alter the basic nature of the m .....

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d Final Order No. C-III/1220 to 1222/WZB/2003 dated 02.09.03. 4. As regards Red oxide, the Ld. Counsel submits that it is rightly classifiable under chapter 25.05, as there is no manufacturing activity involved. Whereas, the department has classified the same under 2821.10 and submits that the demand is limited only to six months and they have already filed the classification declaration and it is only a question of classification dispute and therefore, no penalty is warranted and no order of co .....

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cined, obtained by mixing or subjected to processing beyond that is mentioned in each heading or sub-heading. She drew attention to page 106 at para 10.1 of OIO and submits that coated products are rightly classifiable under Chapter 3824.90 and red oxide powder is also rightly classifiable under chapter 2821.10, which is more specific heading than under Chapter 25. She further submits that penalties have been rightly imposed on them. 6. After hearing both sides, we find that the short issue invo .....

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e lime stone, talc, dolomite, barites, china clay and whiting etc. The present dispute is only on the classification of coated minerals. On perusal of the proceedings and findings and details of the flow chart, manufacturing process which has been explained in the impugned order as well as in the SCN, the adjudicating authority in his denovo order has clearly discussed the issue and the directions given by the Tribunal in the order dated 09.06.2005 and also re-examined the expert opinions relied .....

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even with chemical substances, eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, or concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallisation), but not products that have been roated, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading or sub-heading. As seen from the above, the Chapter note specifically covers products .....

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ich has not undergone any further processing beyond washing, grounded, powdered and concentrated. In the present case, the product micronized minerals which has undergone the process beyond the processes mentioned in Chapter note 2 of Chapter 25. Therefore, by virtue of chapter note, the micronized minerals are chemically coated products which has undergone the process beyond the process mentioned in Section note 2 or chapter 25 of CETA. Therefore, the goods are rightly excluded from Chapter 25. .....

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addition to uncoated products it is not the case of mixture of two products. By virtue of Chapter Note (2) of Chapter 25 chemically coated micronized minerals are rightly excluded from Chapter 25 therefore, the ratio of the citation relied on by the appellant is not applicable to the present case. Further, we also find that the appellants are regular manufacturers of both uncoated and coated micronized minerals and cleared them under Chapter 3824.90. In the appellant s own case, not disputed the .....

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ation on the appellants arguments seeking classification under Chapter 25.05. Therefore, we hold that chemically coated micronized minerals are rightly classifiable under Chapter 3824.90 and not under Chapter 25.05. 7. As regards classification of red oxide the appellant classified it under Chapter 25.05 and the department re-classified it under chapter 2821.10. The red oxide which is otherwise known as iron oxide and earth colour are specifically classifiable under Chapter 2821.10 as iron oxide .....

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