2025 (8) TMI 1662 - AT - Customs

Import classification of PCC Lime 0/20MM (Quicklime) held as Customs Tariff Item 2522 1000; earlier orders annulled

M/s ITC Ltd. Versus Commissioner of Customs (Port), Kolkata

CESTAT AT, Kolkata allowed the appeal and set aside the impugned orders, holding the imported PCC Lime 0/20MM (Quicklime) is classifiable under Customs ... Classification of imported goods - PCC Lime 0/20MM (Quicklime)(Pulp Conversion Chemical) - to be classified under Customs Tariff ltem No. 2825 9090 under Section 17(4) of the Customs Act, 1962 or not - HELD THAT:- A similar issue has been examined by this Tribunal in the case of M/s. JSW Steel Ltd. v. Commissioner of Customs, Cochin [2025 (5) TMI 455 - CESTAT BANGALORE] wherein the Tribunal observed 'the chemical analysis clearly states that the purity is only 92% and accordingly, the product “Quick Lime” is rightly classifiable under CTH 2522 1000.' Admittedly, in the Bills of Entry filed, the purity of Calcium Oxide is less than 98% and therefore, the product in question i.e., Quicklime, is rightly classifiable under Customs Tariff Item No. 25221000, following the decision in the case of M/s. JSW Steel Ltd. There are no merit in the impugned orders and accordingly, the same are set aside - appeal allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether imported quicklime containing calcium oxide with purity less than 98% is classifiable under Customs Tariff Item (CTH) 2522.10 (Quicklime) or under CTH 2825.90 (Other inorganic calcium oxide/hydroxide) for the period in question. 2. Whether the presence of calcination or thermal processing excludes the product from Chapter 25 and mandates classification under Chapter 28. 3. The applicability and precedential value of earlier decisions (including coordinate-bench and Tribunal precedents, and an Advance Ruling) on classification where calcium oxide purity is below the high-purity threshold (˜98%). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Classification of quicklime with CaO purity < 98%: legal framework - Legal framework: Classification is governed by the Customs Tariff headings and HSN Explanatory Notes. Chapter 25 (including Heading 2522) covers quicklime, slaked lime and hydraulic lime, and Chapter 28 (including Heading 2825) covers certain inorganic chemicals including chemically defined compounds such as calcium oxide/hydroxide in the pure state. Chapter and subheading notes and the interpretative rule favour specific headings over residuary entries. - Precedent treatment: Coordinate-bench Tribunal decisions (e.g., JSW Steel Ltd., Viraj Profiles Ltd., Jindal Stainless, Bhadradri Minerals) hold that calcium oxide of high degree of purity (approximately 98% or more) falls under 2825 but impure quicklime (impure CaO) falls under 2522. An Advance Ruling to the contrary was noted but treated as factually distinguishable. - Interpretation and reasoning: HSN explanatory notes define 'Quicklime' as an impure calcium oxide obtained by calcining limestone and expressly exclude purified calcium oxide and calcium hydroxide (which are covered by 2825). Explanatory note (11) to Chapter 28 specifies that 2825 covers CaO/Ca(OH)2 only in the pure state (practically no clay, iron oxide, manganese oxide, etc.) and that fused or otherwise highly pure CaO (~98%) is covered under 2825. The Tribunal applied the principle that a specific heading (2522.10 for quicklime) must be preferred over a residuary 'other' entry (2825.90.90), unless purity and compositional evidence place the product within the specific scope of Chapter 28. - Ratio vs. Obiter: The holding that impure quicklime (CaO purity less than ~98% and containing impurities such as iron, magnesium, siliceous matter) is classifiable under 2522.10 is treated as ratio by the Tribunal and applied to the instant facts. Observations distinguishing other authorities or remarking on factual differences (e.g., Advanced Ruling) are obiter to the extent they are not essential to the ratio. - Conclusion: Where chemical analysis shows CaO purity materially below the threshold (~98%) and presence of impurities, the product is classifiable under CTH 2522.10 (Quicklime) and not under CTH 2825.90. Issue 2 - Effect of calcination or thermal processing on Chapter 25 exclusion - Legal framework: Chapter 25 Note 1 restricts its headings to products in a crude or mechanically processed state and excludes products 'that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading,' unless context or other notes provide otherwise. - Precedent treatment: Revenue contended that calcination excludes the product from Chapter 25; however, Tribunal decisions relied upon by the appellant and the Tribunal itself interpret HSN explanatory notes to treat quicklime as inherently a product obtained by calcining limestone and still falling within Heading 2522 when impure. - Interpretation and reasoning: The HSN definition of 'Quicklime' expressly describes it as an impure calcium oxide obtained by calcining limestone. Thus, the mere fact of calcination does not automatically exclude quicklime from Chapter 25: the decisive factor is whether the product is the impure quicklime described in 2522 or a purified chemical oxide that falls within Chapter 28. The Chapter 25 note excluding goods 'that have been roasted, calcined...' must be read in context with heading descriptions and explanatory notes. - Ratio vs. Obiter: The ruling that calcination alone does not displace quicklime into Chapter 28 is part of the operative reasoning (ratio) insofar as it clarifies the scope of 2522 and its interaction with the exclusion in Note 1. - Conclusion: Calcination per se does not preclude classification under Heading 2522 when the product corresponds to the impure quicklime envisaged by the heading; purity and composition determine the correct chapter. Issue 3 - Precedential application and treatment of prior decisions and Advance Rulings - Legal framework: Consistency in tariff classification requires application of HSN notes and Tribunal jurisprudence; coordinate-bench decisions are persuasive and often followed unless distinguishable. - Precedent treatment: The Tribunal followed the reasoning in recent coordinate-bench decisions (JSW Steel Ltd., Viraj Profiles Ltd., Jindal Stainless, Bhadradri Minerals) that established that only high-purity CaO (~98% or above and practically free of impurities) falls under 2825. Decisions where lower-purity CaO was classified under 2825 were examined and distinguished on factual grounds (e.g., differing composition, failure to consider chapter note 11). Decisions in a different statutory context (e.g., pre-HSN-aligned Central Excise jurisprudence) were treated as distinguishable and not binding for present classification under the tariff aligned to HSN. - Interpretation and reasoning: The Tribunal emphasized the interpretative rule favoring specific headings over residuary entries; since 2522.10 is a specific entry for quicklime and 2825.90.90 is residuary, the specific entry must be applied unless the product's characteristics place it within 2825 as a high-purity chemically defined compound. The Tribunal treated the body of consistent coordinate-bench decisions as applicable precedent and followed them. - Ratio vs. Obiter: The adoption and application of the coordinate-bench reasoning to the present facts is ratio. Distinguishing the Advance Ruling and older authorities on factual or contextual bases is obiter insofar as it explains why those decisions do not control here. - Conclusion: Recent Tribunal decisions establishing the purity threshold and impurity-based classification under 2522 are followed; contrary rulings that did not account for chapter notes or factual purity differences are distinguished and not followed. Overall Conclusion Applied to the Present Facts - Where test reports show calcium oxide content around 92% (i.e., materially below the ~98% purity threshold) and presence of impurities (iron, magnesium, siliceous matter), the product corresponds to 'quicklime' as described in the HSN explanatory notes and is classifiable under CTH 2522.10. Accordingly, orders classifying the goods under CTH 2825.90.90 were set aside and classification under 2522.10 was confirmed, with consequential relief as per law.