TMI Blog2007 (8) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... bonate (CaCo 3 ) is proposed to be imported This lime stone would be crushed and heated to high temperatures During the heating the calcium carbonate would decompose into carbon dioxide (CO 2 ) and calcium oxide (CaO). The carbon dioxide contained in the lime stone would escape leaving be hind calcium oxide This calcium oxide, referred to as lime or quick lime or burnt lime would be further, crushed to smaller sizes as per customers' requirements. Apart from calcium oxide, the finished product, i.e. burnt lime would also have traces of certain impurities While calcium oxide would comprise 94 to 96% of the product, the other elements/compounds present in it would be magnesium oxide (MgO constituting less than 1 5%), silicon oxide (SiO 2 ) accounting for less than 1%), sulphur (S which would be less than 0.05%) and R 2 O 3 which has been clarified by the applicant, in the course of the hearing, to be aluminum oxide (A1 which would constitute less than 0.5% 3. The applicant states that the two possible classifications of the high purity burnt lime in the First Schedule (hereafter referred to as the 'tariff) to the Central Excise Tariff Act, 1985 are 2522 under Chapter 25 and 2825 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de and sulphur in the burnt lime does not take away the product from Chapter 28 in view of the following definition of the term "impurities" in the HSN Notes :- "Separate chemical elements and separate chemically defined compounds containing impurities, or dissolved in water, remain classified in Chapter 28. The term "impurities" applies exclusively to substances whose presence in the single chemical content results solely and directly from the manufacture process (including purification). The substances may result from any of the factors involved in the process and are principally the following : (a) Unconverted starting materials. (b) Impurities present in the starting materials. (c) Reagents used in the manufacturing process (including purification). (d) By-products. It should be noted, however, that such substances are not in all cases referred as "impurities" permitted under Note 1(a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general use, they are not regarded as permissible impurities." Since the impurities in the final product burnt lime are all materials which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oxide present in the burnt lime are known to retard the process of crystal formation. In response to the above, the applicant have submitted an affidavit dated 17-7-2007 stating that the high purity burnt lime, that they propose to manufacture would be "crystalline in structure in a cubic system" and that the presence of impurities does not affect/retard the crystallization of calcium oxide. 7.1 The Senior Departmental Representative has also submitted detailed technical literature on "Lime and Lime stone" appearing on pages 343-381 in Volume 14 of Encyclopedia of Chemical Technology by Kirk-Othmer and have referred to extracts from Wikipedia on calcium oxide. It appears from a reading of the above literature that calcium oxide is known variously as lime, quick lime, burnt lime etc. and that the terms calcium oxide and lime/quick lime are used interchangeably. This oxide is a white caustic and alkaline crystalline solid that finds extensive use in different fields. While the most primitive use of calcium oxide has been in the building and the construction industry, it is also used for more sophisticated purposes such as for manufacture of chemicals, steel, paper, glass etc. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwise requires the headings of this Chapter cover only products which are in crude state or which have been washed (even with chemical substances eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, concentrated by floatation, magnetic separation or any other mechanical or physical process (except crystallization), but not products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading 9. A reading of the above indicates that while Chapter Heading 2505 earlier mentioned only "lime' in general terms, without mentioning its different varieties, including quick lime, the present tariff heading clearly mentions quick lime while excluding its predominant constituent viz calcium oxide When the present tariff specifically includes quick lime which is being manufactured and bought and sold in the market, such a product cannot be said to be non-excisable, though the rate of duty is nil at present The fact that the product is obtained by calcination a process debarred by Note 1 of Chapter 25, will not take away the quick lime from the purview of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or not containing impurities. 11.1 Chapter 25 which includes quick lime, on the other hand, forms a part of Section V which covers "Mineral products". The said Chapter encompasses "Salt; sulphur; earths and stone; plastering materials; lime and cement" and Note 1 of this Chapter clarifies that this Chapter covers only such of the above products which are in the crude state or which have been subjected to some elementary processes such as washing, crushing, grinding, powdering, etc. As mentioned earlier, the product quick lime has varying strengths of calcium oxide While the quick lime which is a less pure form of calcium oxide, is used in buildings, for white washing, cement manufacture etc, the purer versions with higher concentrations of calcium oxide find more sophisticated uses in steel making, manufacture of chemicals, paper, etc. From a reading of the descriptions of goods in the Section, Chapter Heading etc above, it would appear that the quick lime which is more akin to the "mineral product" lime in a relatively crude form, than to a "separate chemically defined compound" would merit classification under Chapter 25 whereas the purer versions containing higher concentr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1985. 14. [Ruling per : Justice P.V. Reddi, Chairman]. - Broadly, I am in agreement with what the learned Member has said. The justification for this addenda is only to supply emphasis to certain thoughts already reflected in her order. 15. The applicant calls the product to be manufactured by it as "high purity burnt lime". The trade name of that finished product, according to the applicant, is steel grade lump lime which is mostly used in the steel industry. It is known as high purity burnt lime for the reason that it will have high calcium oxide content of 94 to 96% According to the applicant, burnt lime/quick lime available in the domestic market in India usually has 75-85% purity in terms of calcium oxide content and in the case of industrial grade, it is 85-90% The end use of the proposed product is primarily in steel industry 16. Wikipedia (the free Encyclopedia) refers to the fact that calcium oxide is / commonly known as burnt lime, caustic lime or quick lime The applicant also states that burnt lime is otherwise known as Quick lime In Encyclopedia of Chemical Technology by Kirk-Othmer, it is stated that the component of calcium oxide ranges between 93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to distinguish calcium oxide from quick lime, this type of product which contains the calcium oxide - an inorganic compound, in almost pure state, should be relegated to Heading 2825. The Commentary/Explanatory notes in HSN referred to by the learned Member at paragraph 12 also lend support to this view point 20. The first attempt of the applicant was to keep out quick lime and burnt lime from the purview of Ch. 25 of Central Excise Tariff That was sought to be done by taking recourse to Note 1 to Ch. 25 and the decision of the Supreme Court m Collector of Central Excise v. Nuchern Industries - 1998 (99) E L T 197 (S.C.). The Supreme Court while interpreting the then existing Note 2 to Ch. 25 held that Quick lime and hydrated lime obtained by calcination would fall outside the scope of Ch. 25. That conclusion was arrived at by the Supreme Court when the relevant Entry in Ch. 25 referred to 'lime' in general terms but not specifically Quick lime. For the reasons stated by the learned Member in para 9, the ratio of that decision cannot be applied to the interpretation o the Heading and the Note as recast With specific inclusion of Quick lime in Ch 25 as an excisable commodity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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