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TMI Blog2025 (5) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... of Entry were assessed provisionally under Section 18(1)(b) of the Customs Act, 1962 as "Quick Lime" under CTH 2522 1000 and on payment of Customs Duties of 5% BCD + Nil CVD + 3% Cess + 4% SAD and cleared the same after drawing samples of imported "Quick Lime" for Chemical Examination. Thereafter, based on the Laboratory Test Results, show-cause notice dated 12.01.2016 was issued on the ground that the imported goods were rightly classifiable as 'Calcium Oxide' under CTH 2825 9090. The original authority vide Order-in-Original No.42/2016 dated 24.03.2016 finalized the assessment of 8 Bills of Entry re-classifying the imported "Quick Lime" as 'Calcium Oxide' under CTH 2825 9090 and demanded differential Customs duty of Rs.75,99,475/- along with applicable interest, which was upheld by the Commissioner of Customs (Appeals), Cochin. Aggrieved by this, the appellant is in appeal before us. 3. The Learned Counsel submitted that the Deputy Commissioner of Customs held that "Quick Lime" was obtained by burning of lime stone in a process called Calcination and that the calcined products get excluded from Chapter 25 by virtue of Note 1. Further, observed that CTH 2522 specifically exclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not go out of its scope merely because of calcination. The relevant part of the judgment is extracted below: "5. Thus, the Show Cause Notice proceeded on the basis that as China Clay was calcined, it could not be included under Chapter Heading 25.05 and since Chapter Heading 38.24 mentions about some specified product including those consisting of mixture of natural products, it would fall under Chapter Heading 38.24.- 6-8. .... 9. 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 in operation from 1986-1990 is - "2. Heading Nos. 25.01, 25.03 and 25.05 cover only products which have been washed (even with chemical substances, eliminating the impurities without changing the structure of the product), crushed, ground, powdered, levigated, sifted, screened, or concentrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : - "25.07 - Kaolin and other Kaolinic Clays, whether or nor calcined. This heading covers kaolin and other kaolinic clays, the main constituents of which are kaolin minerals such as kaolinite, dickite and nacrite, anauxite, and halloysite. Such clays remain in the heading even when calcined. Kaolin, also known as China clay, is a high grade, white or nearly white clay used in the porcelain and paper-making industries. Kaolin-bearing sands are excluded (Heading 25.05)." 13. From the aforesaid discussion, it becomes clear that merely because the product of assessee, i.e., China Clay is calcined, it would not put it out of Chapter Heading 25.05. 14. We, thus, find order of the CESTAT without any blemish and are of the opinion that there is no merit in the instant appeal which is, accordingly, dismissed." In view of the above, the Appellant submits that the ratio of the aforesaid judgments is applicable to the facts of the case. 3.3. It is further stated that the HSN Explanatory Notes under Chapter 25.22 reads as under: "25.22 - QUICKLIME, SLAKED LIME AND HYDRAULIC LIME, OTHER THAN CALCIUM OXIDE AND HYDROXIDE OF HEADING NO 28.15 2522.10 - Quick lime 2522.20 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sparingly soluble in water. Used as a bactericide and as a detergent, in medicine and in the preparation of cosmetics. Therefore, in terms of HSN Explanatory Note under CTH 28.25 only covers Oxide (Cao) and Hydroxide (Calcium Hydroxide) in the 'pure state' and that the 'pure state' means practically no impurities like Iron Oxide, Magnesium Oxide, etc. The Customs Chemical Examiner's Test Reports described the product as being in the form of white lumps and powder, contains Calcium Oxide to the extent of 92.2% with impurities like Silicon Oxide, Aluminium Oxide, Sodium Oxide, Ferric Oxide, Magnesium Oxide, etc. The imported goods were thus not "pure" Calcium Oxide and hence, excluded under CTH 2825 9090. 3.5. Further reliance was also placed on the judgment in the case of CCE, Hyderabad-III Vs Bhadradri Minerals Pvt. Ltd.: 2015 (324) ELT 395 (T-Bang), wherein it was observed as: "5.2 The Commissioner has taken note of the claim made by the respondent and their reliance on the Board's Circular dated 10-7-1991 after the issue was discussed in the Tariff Conference. For better appreciation of the relevant portion of the Board's Circular No. 112/6/91-CX3 (Circular No. 18/91-CX3), d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed (usually with 8 H2O) sparingly soluble in water. Used as a bactericide and as a detergent, in medicine and in the preparation of cosmetics. Quicklime (calcium oxide) and slaked lime (calcium Hydroxide) are excluded (heading 25.22)". 5.4 The Commissioner has also taken note of the fact that the words "except where their context otherwise requires" was not there in the Chapter Note prior to 20-3-1990. The Chapter Note after 20-3-1990 reads as under: "Except where their context otherwise requires, heading Nos. 25.01, 25.03 and 25.05 cover only products which have been washed (even with chemical substances, eliminating the impurities without changing the structure of the product), crushed, grinded, powdered, levigated, sifted, screened or concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallization), but not products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading or sub-heading". 5.5 On the basis of Tariff heading, HSN Explanatory Note, Board's Circular, Chemical Examiner's report and the Chapter Note, it is necessary to consider whether 'Burnt Lime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the following judgments: * Viraj Profiles Limited vs. CC (Preventive), MUMBAI: 2023 (10) TMI 1260 - CESTAT MUMBAI] approved by Hon'ble Supreme Court by dismissing Civil Appeal/Diary No. 9655/2024 by Order dated 01.4.2024. * Jindal Stainless (Hisar) Ltd. Vs. CC, New Delhi: 2020-TIOL-1366-CESTAT-DEL * Mukand Limited vs. CC (NS-I), RAIGAD: 2024 (4) TMI 81 - CESTAT MUMBAI 4. The learned Authorised Representative for the Revenue reiterated the findings of the Commissioner (Appeals) in the impugned order. 5. Heard both sides. The only issue to be decided is whether the product "Quick Lime" imported by the appellant falls under CTH 2522.10 or 2825.9090 of the Customs Tariff 1985. The classification by the Revenue is based on the Lab Test Results report which says that the sample is in the form of white lumps and powder; composed of mainly Calcium Oxide (Quick Lime) along with small amounts of compounds of Iron, Magnesium, Manganese, etc.; available CaO = 92.2% and based on the fact that the Chapter 25 includes mineral products in the crude state or washed, crushed, ground, powdered, or concentrated by floatation, magnetic separation or other mechanical or physical proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usually employed for soil improvement or in the sugar industry. Hydraulic lime is obtained by low temperature calcinations of limestone containing sufficient clay (although 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 un combined quicklime, which may be slaked with water." This heading excludes purified calcium oxide and calcium hydroxide heading 2825. Similarly, the HSN notes at Chapter heading 2825 explains as follows: (11) Calcium oxide, hydroxide and peroxide. This heading covers only the Oxide (CaO) and the hydroxide (Ca (OH)2), 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 ordinary 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 for addition to concrete, in small pieces, to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calcium oxide of high degree of purity i.e., app. 98% or more would alone gets covered under the scope of sub-heading 2825. As seen from the test reports, the content of calcium oxide or lime is much less than the requisite 98%. Thus, we are of the considered view that in terms of the HSN explanatory notes, both on account of presence of specified material making it not in pure state and the composition of calcium oxide not upto the requisite 98% making it not a product of high degree, would not enable the imported goods to be classified under sub-heading 2825. ..... 18. We also find that on similar issue of classification of quick lime the Co-ordinate Bench of the Tribunal in the case Jindal Stainless (Hisar) Ltd. (supra) had decided the appropriate classification of quick lime under chapter 25. The relevant paragraphs in the said order is extracted below: "4. We have gone through rival submissions. It is seen that the goods imported by the appellant have purity in the range 95-97% as stated in the SCN. Certificated produced by the appellant shows the range to be slightly below that. 4.1 The heading 2522 reads as following: "25.22- Quicklime, slaked lime and hydraulic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by fusing ordinary 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 for addition to concrete, in small pieces, to increase in resistance to water. Calcium peroxide (CaO) is a white or yellowish powder, hydrated (usually with 8 H2O) sparingly soluble in water. Used as a bactericide and as a detergent, in medicine and in the preparation of cosmetics. Quicklime (calcium oxide) and slaked lime (calcium Hydroxide) are excluded (heading 25.22)". In the instant case, it is not in dispute that what is imported has purity less than 98%. Therefore, the decision squarely applies to the facts of the case. 4.4 Revenue has relied on the Advance Ruling Authority given in the case of M/s Lhoist India Pvt. Ltd.(supra) wherein burnt lime having 94- 96% CaO was held to be classifiable under chapter heading 2825. The facts in the said case were significantly different. The said decision has been passed without taking note of chapter note 11 to chapter 28. Moreover, in the said decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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