1998 (12) TMI 541 - AT - Central Excise

Classification of Calcium Carbonate: Uncoated vs. Coated Varieties

The Tribunal held that the process of converting limestone to Precipitated Calcium Carbonate amounts to manufacture due to chemical transformation, ... Classification Issues Involved:1. Whether the process undertaken by the appellants amounts to manufacture.2. The correct classification of Precipitated Calcium Carbonate (coated and uncoated) under the Central Excise Tariff Act, 1985.Issue-wise Detailed Analysis:1. Whether the process undertaken by the appellants amounts to manufacture:The appellants argued that the activities undertaken by them do not amount to manufacture as there is no new name, character, or use of the product. They contended that the entire process is to obtain a product of a requisite particle size, without changing the chemical composition of the starting material (limestone). They cited the decision in the case of Paramount Sinters, where agglomeration of ore fines was held not to amount to manufacture. However, the Tribunal found this judgment inapplicable to the present case, stating that the final product, Precipitated Calcium Carbonate, is different in name, character, and use from the raw material. The Tribunal held that the process of conversion of limestone to Precipitated Calcium Carbonate involves chemical transformation, satisfying the test of manufacture.2. The correct classification of Precipitated Calcium Carbonate (coated and uncoated):Uncoated Variety:The Tribunal examined the process of manufacture, which involves chemical transformation beyond mere physical processes. The product, Precipitated Calcium Carbonate, is a chemically defined compound and not a mineral product falling under Heading 25.05. The Tribunal noted that the product is used in industries requiring high purity and specific standards, which natural limestone cannot meet. Therefore, the uncoated variety was classified under sub-heading 2836.90, which covers Carbonates of inorganic bases.Coated Variety:There was a difference of opinion regarding the classification of the coated variety. One member held that the coated variety should be classified under sub-heading 3823.00, which covers chemical products and preparations not elsewhere specified. The other member argued that the coated variety should also fall under sub-heading 2836.90, as the Central Excise Tariff does not distinguish between coated and uncoated varieties. The third member agreed with the classification under sub-heading 3823.00, leading to the majority opinion that the coated variety should be classified under sub-heading 3823.00.Conclusion:The Tribunal upheld the classification of the uncoated variety of Precipitated Calcium Carbonate under sub-heading 2836.90 and the coated variety under sub-heading 3823.00. The appeal was rejected in line with the majority opinion.