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TMI Blog2024 (10) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... NGH, Shop No B/NS/24, 327, Maruka ki PoI, Khakharki„ NAGUAR-341510, RAJASTHAN (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97 (2) (a) given as under: (a) classification of goods and/or services or both (e) determination of the liability to pay tax on any goods or services or both A. SUBMISSION OF THE APPLICANT (in brief):- 1. That M/S Balveer Singh, situated at 327, Maruka Ki PoI, Khakharki, Nagaur, Rajasthan 341510 (hereinafter referred to as "applicant") is presently an unregistered person intending to start the business of manufacture and sale of hydrated lime (also known as slaked lime). 2. That a picture of the proposed slaked / hydrated lime is produced for your reference below: 3. That the slaked / hydrated lime is used as raw material in various industries including but not limited to steel industry, paper industry, chemical industry, leather industry, sugar industry, dairy industry, water treatment, road construction, etc. 4. That the process of manufacturing of proposed slaked / hydrated lime is as under: a. Purchase: Quick Lime Lumps i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han those specified in the Schedule for exempted goods or other Rate Schedules for goods [including Fertilizer grade Phosphoric acid]] 9. That this Advance Ruling is sought from the Authority for Advance Ruling in respect of the following question a. What should be the classification and HSN Code for supply of slaked / hydrated lime manufactured by the applicant containing less than 98% of the Calcium Oxide and Calcium Hydroxide? b. What shall be the rate of tax on the said product? B. INTERPRETATION AND UNDERSTANDING OF APPLICANT ON QUESTION RAISED (IN BRIEF) On Classification 1. That the charging section for GST i.e. Section 9 of the Central Goods and Services Tax Act 2017 provides that there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. To notify the rates of supply of goods, Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ]] 7. That it is understood that specific description shall always prevail over the general description when it comes to classification of goods. However, the guiding principles determining the classification of a product under the GST regime can be broadly bifurcated as under: a. Classification under the Customs Tariff Act, 1975 ("Customs Tariff Act") along with relevant Chapter Notes pertaining to Chapters 25 and 28; b. General Rules for Interpretation of the First Schedule to the Customs Tariff Act (hereinafter referred to as the "General Rules for Interpretation"); c. HSN Explanatory Notes released by the World Customs Organization 8. In this regard, it is pertinent to understand the classification of such goods under the Customs Tariff Act 1975.The screenshot of the relevant extract is produced below: Chapter 25 2522 QUICKLIME, SLAKED LIME AND HYDRAULIC LIME, OTHER THAN CALCIUM OXIDE AND HYDROXIDE OF HEADING 2825 2522 10 00 - Quicklime kg . 5% - 2522 20 00 - Slaked lime kg . 5% - 2522 30 00 - Hydraulic lime kg . 5% - Chapter 28 2825 Hydrazine and hydroxylamine and their inorganic salts; other inorgani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory Notes as approved by the WCO Council, constitute the official interpretation of the Harmonized System at the international level and are an indispensable complement to the System. HSN explanatory notes are a good guide for determining as to how a particular HSN heading is understood in trade and commerce parlance across world. 15. That the HSN Explanatory Notes, while not legally binding, they do represent the considered views of classification experts of the Harmonized System Committee. It is well settled that the explanatory notes have persuasive value and in the event of disputes, the Indian Courts have upheld seeking recourse to the explanatory notes while determining classification of products. 16. Reliance in this regard is placed on the following judicial precedents: a. Hon'ble Supreme Court in L.M.L. Limited v. Commissioner of Customs, reported at, [2010 (258) E.L.T. 321 (S.C.)], in which it was held that in order to resolve a dispute on tariff classification, internationally accepted nomenclature emerging from HSN explanatory notes, is a safe guide for classification. b. The Hon'ble Tribunal in Mumbai the case of Nestle India Ltd. v. Commissioner of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hydroxides 2825.40 - Nickel oxides and hydroxides 2825.50 - Copper oxides and hydroxides 2825.60 - Germanium oxides and zirconium dioxide 2825.70 -Molybdenum oxides and hydroxides 2825.80 - Antimony oxides 2825.90 -Other This heading covers : (A) Hydrazine and hydroxylamine and their inorganic salts. (B) The metal oxides, hydroxides and peroxides of this Chapter not included in preceding headings. (11) Calcium oxide hydroxide and peroxide. This heading covers only the oxide (CaO) and the hydroxide in the pure state (i.e., containing practically no clay, iron oxide, manganese oxide, etc.), such as the product obtained by calcining precipitated calcium carbonate. The heading also covers fused lime obtained by fusing quicklime in an electric furnace. This product has a high degree of purity (approximately 98 % calcium oxide); it is crystalline and generally colourless. It is used, in particular, for refractory linings for furnaces, in the manufacture of crucibles and fir addition to concrete, in small pieces, to increase its to wear. Calcium peroxide (CaO2) is a white or yellowish powders hydrated (usually with 8 H2O)), sparingly soluble in water. Used as a an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Heading 28.25 ibid chargeable to duty - HELD : Chapter Note 2 of Chapter 25 ibid detailing processes covered by it preceded by words 'except where context otherwise requires' - On this basis C.B.E. & C. Circular No. 112/6/91-CX.3, dated 10-7-1991 clarified that burnt lime merits classification under sub-heading 2505.60 ibid notwithstanding the fact that burnt lime obtained by process of calcinations and not through grinding, sifting; etc. HSN Explanatory Note under Heading 28.25 ibid excludes Calcium Oxide with purity less than 98% whereas purity of burnt lime is 70 to 75% and therefore not covered by Heading 28.25 ibid - Burnt lime correctly held classifiable under Heading 25.05 ibid - Impugned order upheld - Section 35B of Central Excise Act, 1944. [paras 5.2, 5.3, 5.4, 5.6, 5.8, 6]. The copy of the said judgement is enclosed and marked as Annexure-2. 24. Similar issue regarding classification of quick lime having purity range of 92% to 97% has already been settled in the judgment of M/s Jindal Stainless (Hisar) Ltd v/s The Commissioner of Customs by Hon'ble Delhi Tribunal in Custom Appeal No. 51224 of 2019. The Hon' Tribunal held that quick lime with purity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be 5%. C. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT: Q.1 What should be the classification and HSN Code for supply of slaked / hydrated lime manufactured by the applicant containing less than 98% of the Calcium Oxide and Calcium Hydroxide? Q2. What shall be the rate of tax on the said product? D. PERSONAL HEARING In the matter, personal hearing was granted to the applicant on 09.04.2024 & 28.05.2024. Mr. Yash Dhadda C.A. and Suchi Sethi C.A. Authorized Representative appeared for personal hearing. They reiterated the submission already made by them and also made additional submission on 28.05.2024. E. COMMENTS OF THE JURISDICTIONAL OFFICER:- Applicant is unregistered with the department so no comments have been sought from field formations. FINDINGS, ANALYSIS & CONCLUSION: 1) We have carefully examined the statement of facts, supporting documents filed by the Applicant along with application, oral and written submissions made at the time of hearing. We have also considered the issues involved, on which advance ruling is sought by the applicant, and relevant facts. 2) The applicant has relied upon the case of COMMISSIONER OF C, EX., HYDERABAD-I" vs. BHADRADRI MIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh usually less than 20%) to ensure that the product sets under water. Hydraulic lime differs from natural cement in that it still contains appreciable amounts of uncombined quicklime, which may be slacked with water. The heading excludes purified calcium oxide and calcium hydroxide (heading 28.25). From the above, it is seen that Quicklime is obtained by calcination of limestone i.e. calcium carbonate giving calcium oxide and carbon dioxide and when it is further combined with water, it produces slacked lime which is calcium hydroxide. Quicklime is used for building purposes such as white washing, whereas slacked lime is used in soil improvement and in plasters. However, purified calcium oxide and purified calcium hydroxide is excluded from 2522. Chapter 28 of Section VI of Customs Tariff covers Inorganic Chemicals, Organic or Inorganic Compounds of Precious Metals, of Rare-Earth Metals, of Radioactive Elements or of Isotopes. Chapter 2825 covers Hydrazine and Hydroxylamine and their Inorganic Salts; other Inorganic Bases; other Meta/ Oxides, Hydroxides and Peroxides. CTH 2825 90 40 covers Calcium Hydroxide and CTH 2825 90 90 covers others. Note 1 to Chapter 28 states: NOT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also available in such goods. 3.4) Applying the above, to the case at hand, we find that the goods to be supplied is slaked lime and hydrated lime of purity less than approximately 98% merit classifiable under CTH 2522 20 00. 4) We hold that slaked/hydrated lime manufactured by the applicant containing less than approximately 98% of the calcium oxide and calcium hydroxide, are classifiable under CTH 2522 20 00 taxable at 2.5% CGST and 2.5% SGST as per entry Sl. No. 131 of Schedule I of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017 as amended. 5) In view of the above discussion, we rule as under:- RULING Q. 1 What should be the classification and HSN Code for supply of slaked lime manufactured by the applicant containing less than 98% of the Calcium Oxide and Calcium Hydroxide? Ans-1 The classification and HSN for supply of slaked lime manufactured by the applicant containing less than approximately 98% of the calcium oxide/hydroxide is classifiable under CTH 2522 20 00. Q2. What shall be the rate of tax on the said product? Ans-2 The rate of tax of the subject goods is at 2.5% CGST and 2.5% SGST as per entry S.No. 131 of Schedule I of Notification No. 1/2017-C.T. (R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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