Quicklime with 91.70-92.80% CaO content classified under CTI 2522 1000, not CTI 2825 9090 due to insufficient purity

CESTAT Mumbai ruled in favor of the appellant regarding classification of imported quicklime. The tribunal held that quicklime should be classified under CTI 2522 1000 rather than CTI 2825 9090 as claimed by Revenue. Chemical test reports showed CaO content of 91.70-92.80%, which fell short of the 98% purity requirement for classification under heading 2825. The tribunal found no basis for applying GIR Rule 3 and confirmed the goods were appropriately classifiable under CTI 2522 10 00, setting aside the Commissioner's order and allowing the appeal.

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Issues Involved:
1. Classification of "quicklime" under Customs Tariff.
2. Appropriate levy of customs duty.
3. Applicability of exemption benefits under specific notifications.
4. Determination of purity levels for classification.
5. Relevance of BIS standards and previous judicial rulings.

Summary:

Classification of "Quicklime":
The primary issue in this appeal is the classification of "quicklime" imported by the appellants. The appellants classified the product under Customs Tariff Item (CTI) 2522 10 00, while the Department contended it should be classified under CTI 2825 90 90. The Tribunal examined the relevant legal provisions, including Section 12 of the Customs Act, 1962, and the Customs Tariff Act, 1975, along with the General Rules for Interpretation (GIR) and the General Explanatory Notes (GEN) of the First Schedule to the Customs Tariff Act.

Appropriate Levy of Customs Duty:
The Department argued that the imported quicklime, being a calcined product, should attract a higher rate of customs duties under CTI 2825 90 90. The appellants, however, maintained that their product, with a calcium oxide purity of less than 98%, should be classified under CTI 2522 10 00. The Tribunal noted that the classification should be determined according to the terms of the headings and any relative Section or Chapter Notes, giving precedence to GIR 1.

Applicability of Exemption Benefits:
The appellants claimed exemption benefits under various notifications, including Notification No. 50/2017-Customs and Notification No. 01/2017-Integrated Tax. The Tribunal found no irregularity in the appellants' claim for exemption benefits, as the imported goods were covered under the description "quicklime" in heading 2522.

Determination of Purity Levels:
The Tribunal referred to the HSN Explanatory Notes, which specify that calcium oxide of high purity (approximately 98%) falls under heading 2825. The chemical test reports of the imported goods indicated a calcium oxide content of 91.70% to 92.80%, which did not meet the required purity level for classification under heading 2825. Thus, the Tribunal concluded that the imported goods were not classifiable under CTI 2825 90 90.

Relevance of BIS Standards and Previous Judicial Rulings:
The Tribunal considered the BIS standards (IS:1540-1 (1980)) and previous judicial rulings, including the case of Commissioner of Central Excise, Hyderabad-III Vs. M/s Bhadradri Minerals Pvt. Ltd. The Tribunal found that the BIS standard does not cover quicklime used in the metallurgical industry and that the imported goods did not meet the purity criteria for classification under heading 2825.

Conclusion:
The Tribunal concluded that the imported goods "quicklime" are appropriately classifiable under Customs Tariff Item 2522 10 00 and not under Customs Tariff Item 2825 90 90. The impugned order passed by the learned Commissioner of Customs (NS-I), JNCH, dated 06.12.2022, was set aside, and the appeal was allowed in favor of the appellants.

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