Appeal Dismissed: Lime Products Excluded from Central Excise Duty

The appeal challenging the non-excisability of lime/quick lime/hydrated lime under Central Excise duty was dismissed. The Tribunal held that lime obtained by calcination of limestone falls under the exclusion provided by Chapter Note 2 of Chapter 25, making it non-dutiable. Despite a dissenting opinion suggesting referral to a Larger Bench, the majority, citing a Supreme Court decision, concluded that quick lime and hydrated lime are not subject to Excise duty. As a result, the Department's appeal was rejected.

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Issues Involved:
1. Classification of lime/quick lime and hydrated lime.
2. Applicability of Chapter Note 2 of Chapter 25 to the Schedule to the CETA, 1985.
3. Excisability of lime products.

Summary:

1. Classification of Lime/Quick Lime and Hydrated Lime:
The appeal filed by the Collector of Central Excise, Chandigarh, challenges the order-in-appeal dated 19-9-1991, which held that lime/quick lime/hydrated lime does not fall within the purview of Central Excise duty u/s 3 of the Central Excise Act, 1944. The Assistant Collector had initially classified quick lime under Chapter Heading 25.05, but the Collector (Appeals) set aside this order.

2. Applicability of Chapter Note 2 of Chapter 25:
The respondents argued that their product is covered by Chapter Note 2 of Chapter 25, which excludes products that have been roasted, calcined, or obtained by mixing. The Department contended that lime is specifically mentioned in Heading 25.05 and should not be excluded by Chapter Note 2. The Tribunal noted that the item in dispute is lime obtained by calcination of limestone, and thus, falls under the exclusion provided by Chapter Note 2.

3. Excisability of Lime Products:
The Tribunal, following previous decisions, held that quick lime is covered by Note 2 to Chapter 25 and is not dutiable. However, the Vice President dissented, arguing that lime is specifically covered by Heading 25.05 and remains excisable. He suggested referring the matter to a Larger Bench due to the difference in opinions.

Majority View:
The third Member, concurring with the Judicial Member, cited the Supreme Court's decision in the respondent's own case, which held that quick lime and hydrated lime are not exigible to Excise duty. Consequently, the Department's appeal was dismissed.

Final Order:
In view of the majority opinion, the Department's appeal is rejected.

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