CESTAT Hyderabad held that imported Quick Lime is classifiable under CTH 2522

Customs, Excise and Service Tax Appellate Tribunal Hyderabad ('CESTAT Hyderabad') in M/s VISA Steel Ltd. Versus Commissioner of Customs Visakhapatnam– Cus - 2026 (7) TMI 732 - CESTAT HYDERABAD  held that the imported Quick lime is properly classifiable under the Customs Tariff Item ('CTI') 2522 10 00.

Facts:

• The M/s. VISA Steel Ltd ('The Appellant') imported Quick Lime and filed 11 Bill of Entries classifying the same under CTI 2522 1000. The respondent was of the opinion that the imported Quick Lime (Calcium Hydroxide) ('imported goods') was classified under CTH 2528 9090.
• A Show Cause Notice dated July 07, 2017 was issued to the appellant proposing to change the classification from CTH 2522 1000 to CTH 2825 9090 and to recover differential duty of Rs. 26,60,641/- along with interest and penalty. The proposals in the Show Cause Notice ('SCN') were confirmed vide Order-in-Original ('OIO') dated April 09, 2018 and were upheld.
• On an appeal filed by the Appellant Commissioner (Appeals), the order ('impugned order') dated December 31, 2018 upheld the Order-in-Original.

Issues:

Whether the imported goods are correctly to be classifiable under CTI 2522 10 00 or CTI 2825 90 90?

Held:

The CESTAT Hyderabad in [M/s VISA Steel Ltd. Versus Commissioner of Customs Visakhapatnam– Cus - 2026 (7) TMI 732 - CESTAT HYDERABAD] held as under:

• Noted that the chapter heading 2522 clearly provides that quicklime, slaked lime and hydraulic lime are classifiable under specific tariff items provided for therein; however, calcium oxide and hydroxide of Chapter heading 2825 are excluded from the scope of coverage under the heading 2522.
• Observed that there is no dispute on the fact that the imported goods in the present case are 'quicklime' and thus by applying General Rules of Interpretation-1 ('GIR1') it would be classifiable under tariff item 25221000.
• Noted that the exclusion provided for calcium oxide and hydroxide under CTH 2825, when quicklime as a mineral product is converted into separate chemical elements, then the correct classification would be under CTH 2825 due to its change of character from mineral product to chemical product.
• Found that there is no case of mixture of different material or substance to merit classification of GIR 2 or 3 as submitted by the department. Hence, the imported goods are classifiable under CTH 2522 10 00.
• Relied on the order of M/s. Jindal Stainless (Hisar) Ltd. Versus Commissioner of Customs NEW DELHI - 2020 (8) TMI 743 - CESTAT NEW DELHI in which it was held that the quick lime is covered under the CTH 2522 10 00. Also, similar decision has been passed by CESTAT Mumbai in M/s Viraj Profiles Limited Versus Commissioner of Customs (Preventive), Mumbai - 2023 (10) TMI 1260 - CESTAT MUMBAI.
• The findings of Viraj (Supra) was affirmed by Hon'ble Apex Court in COMMISSIONER OF CUSTOM (PREVENTIVE) MUMBAI Versus M/s VIRAJ PROFILES LIMITED - 2024 (4) TMI 187 - SC Order holding that 'Quick Lime and Hydraulic Lime' are obtained by calcining and low temperature calcinations of limestone, respectively, and that these two products would remain classifiable under Chapter 2522 as per explanatory notes to heading 2522.

Hence, the matter is settled by the Hon'ble Apex Court. Furthermore, the appeal is allowed.

Comments & Provisions:

Chapter 25: Mineral Products: Salt; sulphur; earths and stone; plastering materials, lime and cement

Chapter Notes 1. Except where their context or Note 4 to this Chapter otherwise requires, the headings of this Chapter cover only products which are in the 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 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.

CHAPTER 28: Inorganic chemicals, organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes

Chapter Notes 1: 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;