Acid-activated bentonite is classifiable as activated clay outside Chapter 25 when its molecular structure is modified.

Acid-activated bentonite ceases to remain classifiable as crude bentonite in Chapter 25 where acid treatment modifies its molecular structure and produces activated clay. Applying Chapter Note 1 to Chapter 25, the text states that that chapter is confined to products in the crude state or subjected only to specified mechanical or physical processes without structural change. It also relies on the departmental circular and chemical examination to treat the imported goods as an activated natural mineral product outside Heading 2508.10. The stated classification is under Heading 3802.90, with Heading 2508.10 rejected.

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Issues: Whether acid-activated processed bentonite imported by the appellant was classifiable under Heading 2508.10 as bentonite in Chapter 25 of the Customs Tariff Act, 1975, or under Heading 3802.90 as an activated natural mineral product.

Analysis: Chapter Note 1 to Chapter 25 confines that chapter to products in the crude state or subjected only to specified mechanical or physical processes without change in structure. The imported goods were shown by the supplier's description, the chemical examiner's report, and the departmental circular to be calcium bentonite subjected to acid activation, which results in modification of molecular structure and produces activated clay. The Board's Circular No. 32/2002-Cus. dated 10-6-2002 specifically treated activated clay as classifiable outside Heading 2508, and the cited technical literature did not displace that conclusion. The tariff headings and chapter notes were found to be clear, and the competing claim under Heading 2508.10 was rejected.

Conclusion: The goods were held classifiable under Heading 3802.90 and not under Heading 2508.10, in favour of Revenue.

Ratio Decidendi: Where bentonite has been acid-activated so that its structure is modified, it ceases to fall within Chapter 25 and is classifiable as activated clay under the appropriate heading for activated natural mineral products.

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