Essential character test for composite bricks determined tariff classification and exemption under the sand and lime bricks entry.

Composite bricks containing sand, lime and fly ash were analysed under the General Rules for Interpretation to determine the applicable tariff heading. Because sand and lime formed the major constituents and fly ash was present in a lesser quantity to satisfy a regulatory requirement, the goods were treated as sand and lime bricks under heading 6810 rather than fly ash bricks under heading 6815. The exemption for sand and lime bricks therefore applied, and the Revenue's failure to establish classification under the fly ash entry meant confiscation and duty demand could not be sustained.

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Issues: Whether the impugned bricks were classifiable as sand and lime bricks under tariff heading 6810 and eligible for exemption under Notification No. 1/2011-CE, or as fly ash bricks under tariff heading 6815, and whether confiscation and duty demand were sustainable.

Analysis: The competing tariff entries overlapped because the goods contained sand, lime and fly ash. Applying the General Rules for Interpretation, the governing test was whether the article was a composite good and, if so, which component imparted the essential character. The composition showed that sand and lime formed the major constituents and fly ash was added in lesser quantity pursuant to statutory requirements. On that basis, the goods answered to the description of sand and lime bricks under heading 6810, not bricks of fly ash under heading 6815. The exemption notification applicable to sand and lime bricks therefore governed the product. The Revenue had not discharged the burden of proving classification under the fly ash entry.

Conclusion: The goods were correctly classifiable under heading 6810 and the exemption was available. The confiscation and duty demand could not stand.

Final Conclusion: The classification adopted by the assessee was upheld, the exemption was held applicable, and the impugned order was set aside.

Ratio Decidendi: Where goods are composite products capable of falling under two headings, classification must follow the General Rules for Interpretation by preferring the heading that reflects the goods' essential character and the most specific description; the component used in lesser quantity and added to satisfy a regulatory requirement will not displace the principal constituent for classification.

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