TMI Blog2022 (8) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, consistin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us solution of Sodium Hydroxide with constant stirring, forming crystallized Nickel Hydroxide, which is subsequently washed, dewatered, and then dried. Thus, the active material for the positive electrode contains mainly of Nickel Hydroxide [Ni(OH)2] with a small quantity of co-precipitated Cobalt Hydroxide. To enable electricity to percolate well formation of an electrically conductive network is imperative for an efficient utilization of the Nickel Hydroxide-based active material. The cobalt hydroxide is added mainly to impart electric conductivity to the Nickel Hydroxide and is readily oxidized at the time of initial charging to form an electrically conductive micro scale network comprising of Cobalt Oxyhydroxide (COOOH). The graphite addition imparts a conductivity increase to the Nickel Hydroxide structure on a macro scale. (d) During charging, the Nickel Hydroxide will undergo oxidation process thereby converting it into Nickel Oxyhydroxide. During discharge, the Nickel Oxyhydroxide is reduced to Nickel Hydroxide [Ni(OH)2]. (e) Nickel-Cadmium batteries with Nickel Hydroxide [Ni(OH)2] as the positive electrode and Cd(OH)2 as the negative electrode are mainly used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant explained the product features and on a question as to the remaining constituents, the reply was Graphite. Shri Vijaykumar stated that the appropriate sub-heading is 2853 90 00, alternatively they are proposing Chapter 38. It is his opinion that the product in question is not a separate chemically defined compound. 6. Further comments were received from the jurisdictional Commissionerate vide letter dated 15-12-2021 which is as follows :- (a) The Heading 3824 covers, inter alia, chemical products and preparations of the chemical or allied industries, not elsewhere specified. The Heading 3824 covers prepared or Preparations of the chemical or allied industries which are not elsewhere specified or included. Once, the product in question is specifically covered by Heading 2853 as other inorganic compound , it cannot be classifiable under Heading 3823 since it is elsewhere specified or included. Thus, it is submitted that Heading 3824 covers only those products which are not more specifically included in the preceding chapters from 28 to 37 of Section VI of the Customs Tariff Act. (b) They relied on the US Customs Ruling HQ H026743, where the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EL HYDROXIDE [Ni(OH)2] which is the main raw material used to make positive electrode plates used in NICKEL CADMIUM batteries. Nickel-Cadmium batteries have two electrodes (Nickel and Cadmium Hydroxides) immersed in a Potash solution. The positive electrode consists of Nickel Hydroxide, while the negative one is made from Cadmium. The electrolyte is generally based on potash. The applicant has submitted that the NICKEL HYDROXIDE compound is majorly NICKEL HYDROXIDE (70-85%) with a small portion of co-precipitated Cobalt Hydroxide - Co(OH)2 (1-5%), and balance contains Graphite (12-18%) along with moisture (2-8%) for density and free flow ability. 8.1.1 Further, they have elaborated the process followed to make Nickel Hydroxide wherein Nickel Sulphate solution and small quantity of Cobalt Sulphate solution is gradually co-precipitated using an aqueous solution of Sodium Hydroxide with constant stirring, forming crystallized Nickel Hydroxide, which is subsequently washed, dewatered, and then dried. Thus, the active material for the positive electrode contains mainly of Nickel Hydroxide [Ni(OH)2] with a small quantity of co-precipitated Cobalt Hydroxide. To enhance electrical conne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that Mixed Metal Hydroxide (MMH) is classifiable under Heading 2853. 8.1.3 The applicant vide their letter dated filed rebuttal to the comments of the jurisdictional Commissionerate and stated that the proposed goods is nothing but single chemical compound and merits classification under 2825. 8.2 Chapter Note 1(a) to the Chapter 28 reads as under : Except where the context otherwise requires, the headings of this chapter apply only to : (a) separate chemical elements and separate chemically defined compounds, whether or not containing impurities. (b) the products mentioned in (a) above dissolved in water; (c) the products mentioned in (a) above dissolved in other solvents, provided that the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport and that the solvent does not render the product particularly suitable for specific use rather than for general use; Therefore, to be classified under Chapter 28 it is essential that the product should either be a separate chemical elements or a separate chemically defined compound, whether or not containing impurities. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarded 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. It should be noted, however, that such substances are not in all cases regarded 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. Such elements and compounds are excluded from Chapter 28 when they are dissolved in solvents other than water, unless the solution constitutes a normal and necessary method of putting up these products adopted solely for reasons of safety or for transport (in which case the solvent must not render the product particularly suitable for some types of use rather than for general use). Thus, carbon chloride oxides dissolved in benzene, alcoholic solutions of ammonia and colloidal solutions of aluminium hydroxide are excluded from this Chapter and fall to be classified in heading 38.24. Generally speaking, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es takes the compound out of the purview of Heading 2825. As per the Chapter Note 1 of Chapter 28 of the HSN, separate chemical elements and separate chemically defined compounds can include impurities. Further, Chapter Note 1 to the explanatory notes to HSN as detailed above allows certain additions e.g., colouring agents, anti-dusting agents, stabilizers provided these additions do not render the goods particularly suitable for specific use rather than general use. As it can be seen in the case of the proposed goods, the addition of Cobalt Hydroxide and Graphite is done only for the purpose of improving the performance and life cycle of Nickle Hydroxide. The proposed goods have to be used in conjunction with Cadmium to manufacture batteries. Therefore, it stands to reason that Cobalt Hydroxide or Graphite doesn t make the Nickle Hydroxide suitable for specific purpose as compared to what is originally intended. It is clear that addition of those elements/compounds only enhance the performance of Nickle Hydroxide and nothing else. 8.3 The jurisdictional Commissionerate has relied upon a US Cross Ruling HQ H026743 classifying an identical matter. The US Cross Ruling holds as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f cobalt does not form any distinctive new product, which remains as Nickel Hydroxide. Also, only Nickel Hydroxide (positive electrode) will react with the negative electrode (Cadmium). The battery is widely known as Nickel Cadmium battery, even if there is some presence of Cobalt and Graphite. 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. 8.4.2 Inclusion of Cobalt metal as a conducting additive during the electrode fabrication of pasted electrodes is expected to enhance the electrochemical performance of Nickel Hydroxide. Thus, the addition of Cobalt does not change the character and application of Nickel Hydroxide. Hypothetically, Nickel Hydroxide does not act as a reaction initiator, accelerator or catalyst to any product, and it cannot do so even with refinement or enrichment processes. Thus, the proposed goods is classifiable under Tariff Entry 2825 40 00, on the basis of its nature and composition in terms of the chapter notes and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Heading 28.03 Carbon blacks. Heading 28.07 Oleum. Heading 28.08 Sulphonitric acids. Heading 28.09 Polyphosphoric acids. Heading 28.13 Phosphorus trisulphide. Heading 28.18 Artificial corundum. Heading 28.21 Earth colours containing 70% or more by weight of combined iron evaluated as Fe 2 O 3 . Heading 28.22 Commercial cobalt oxides. Heading 28.24 Red lead and orange lead. Heading 28.28 Commercial calcium hypochlorite. Heading 28.30 Polysulphides. Heading 28.31 Dithionites and sulphoxylates, stabilised with organic substances. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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