Tariff Classification: Burnt lime with sub 98% CaO is classifiable under Chapter 25, not Chapter 28, nullifying related demands.

Classification dispute over burnt lime with 85.9% calcium oxide: HSN explanatory notes require a high degree of purity (approx. 98% or more) for calcium oxide to fall under Chapter 28, so impure quicklime falls within Chapter 25; therefore the product is classifiable under Chapter 25 rather than Chapter 28. Interpretative principle preferring a specific tariff heading over a residuary entry was applied, and prior departmental treatment and a relevant administrative circular directing classification under Chapter 25 were treated as controlling in the absence of contrary judicial authority. Consequential demands, interest and penalties were held unsustainable.

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Issues: Whether burnt lime manufactured by the assessee is liable to central excise duty or is classifiable under Chapter Heading 25 of the Central Excise Tariff (nil rate) instead of Chapter Heading 28 (sub-heading 2825 90 90) and whether the demands, interest and penalty confirmed by the adjudicating authority are sustainable.

Analysis: The product's chemical composition shows calcium oxide purity of 85.9%, which is below the 98% purity threshold set out in the HSN explanatory note for Chapter 28. The HSN explanatory note limits Chapter 28 to calcium oxide in a high degree of purity (approximately 98% or more) and excludes impure quicklime, which is treated under Chapter 25. The interpretative rule favoring a specific tariff heading over a residuary entry applies where the product falls within a specific heading unless purity or other criteria place it in the residuary entry. Tribunal precedents addressing similar purity levels and facts have classified quicklime with purity below 98% under Chapter 25 and not under Chapter 28. The Board's Circular No. 112/6/91-CX3 directs classification of burnt lime under Chapter Heading 2505 / Chapter 25 and is binding on departmental authorities absent contrary judicial decisions. The allegations of willful suppression for invoking extended limitation were examined in light of the consistent historical classification and disclosure; where classification is a question of interpretation and the Department itself had earlier treated the product under Chapter 25, the condition precedent for invoking extended limitation and penalties for willful suppression is not satisfied.

Conclusion: Burnt lime with calcium oxide purity of 85.9% is classifiable under Chapter Heading 25 of the Central Excise Tariff and not under Chapter Heading 28 (sub-heading 2825 90 90); consequential demands of duty, interest and penalty confirmed by the adjudicating authority are unsustainable and set aside in favour of the assessee.

Ratio Decidendi: Where HSN explanatory notes require a high degree of purity (approximately 98% or more) for classification under Chapter 28, a quicklime or burnt lime sample with calcium oxide purity below that threshold is to be classified under Chapter 25; specific tariff headings are to be preferred over residuary entries in tariff classification.

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