TaxTMI 
TaxTMI 
2010 (7) TMI 328
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....ce eliminating the impurities without changing the structure of the product) crushed ground powdered, levigated, lifted, screened, concentrated by flotation, magnetic separation or other mechanical or physical processes. During the relevant time Bentonite was specifically mentioned against the CTH 2508.10. He also submitted that during the relevant time according to ITC (HS) classification of export and import items, processed Bentonite (including activated and ground) was covered under heading 2508.10.02. Further, Note-1 (a) to Chapter 38 provided that chapter 38 which does not cover separate chemically defined elements or compounds. Since Bentonite is separately chemically defined compound and specifically covered under Chapter 25 is covered under Chapter 25 only and not under CTH 3802, as claimed by the department. He further relied upon the decision by the Hon'ble Supreme Court in the case of M/s. Dunlop India Limited and MRF Limited v. UOI - 1983 (13) E.L.T. 1566 (S.C.) in support of his contention that classification under ITC (HS) should not have been ignored in this case and as held by Hon'ble Supreme Court, ITC (HS) must be read as complementing the tariff. Further, he als....
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....1 - Except where their context or Note 4 to this Chapter otherwise requires, the headings of this Chapter cover only products which are in the crude state or which have been washed (even with chemical substances eliminating the impurities without changing the structure of the product) crushed, ground powdered, levigated, sifted, screened, concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallization), but not products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading. 6. From the above reading of relevant heading and Chapter note what emerges is that the headings of Chapter 25 cover only products which are in the crude state or which have not undergone any change in the structure of the product as a result of their processing. The different types of processings also have been listed. 7. There is no dispute that goods imported processed bentonite. The only question arise is where there is any change in structure. According to the safety data sheet, provided by the supplier to the appellants, in the column relating to composition/information on ingr....
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.... and bleaching earth/activated clay, etc. This finished product is said to have properties like absorptive capacity, acid properties, catalytic properties, ion exchange capacity and particle size distribution which is highly useful for various industrial applications like purification, filtration, bleaching, etc. HS Explanatory notes to heading 38.02 states that the heading includes activated clays and activated earths, but excludes natural clayey substances." 8. From the circular and the report of the supplier and the test report of chemical examiner, it is quite clear that the product imported by the appellant has been treated with acid. In the absence of specific report regarding change in the structure, the only conclusion that can be drawn by reading of above three documents would be that the item imported by the appellants is activated clay, unless appellants are able to show that acid treatment did not change the structure of the Bentonite. The appellants have also relied upon the technical book namely Foseco non-Ferrous Foundryman's Handbook, 11th edition, by John R. Brown (Page 157 of the book), wherein the following appears :- "The best bonding clays are bento....
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....etter if the article is eo nomine, put under a proper classification to avoid controversy over the residuary clause. As a matter of fact in the Red Book (Import Trade Control Policy of the Ministry of Commerce) under Item 150, in Section II, which relates to "rubber, raw and gutta percha, raw", synthetic latex including vinyl pyridine latex and copolymer of styrene butadiene latex are specifically included under the sub-head "Synthetic Rubber". We do not see any reason why the same policy could not have been followed in the I.C.T. book being complementary to each other. When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classification to deny it the parentage and consign it to an orphanage of the residuary clause. The question of competition between two rival classifications will, however, stand on a different footing." 11. From the above it can be seen that the Hon'ble Supreme Court had observed that when an article is by all standards reasonably claimed to be classifiable under nominated item in the tariff schedule, it cannot be sent to residual heading. In t....
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....e of the same words in the Tariff Heading in the Schedule to the 1985 Act as has been used for the purposes of the Import Trade Control Policy is an additional reason for holding that insecticides, pesticides concentrates in bulk forms are includible within the Tariff Heading. (See Dunlop India Ltd. v. Union of India and Others 1976 (2) SCC 241.)" 13. We do not find that any help is coming out to the appellants from this decision. The appellants would like to submit that ITC (HS) Classification is required to be taken into account. However, it is a settled law that once tariff headings read with chapter notes are clear and there is no need to consider other aspects, for classification. The purpose of ITC (HS) classification is entirely different and purpose is not the classification of the goods for the purpose of levy of custom duty. 14. The decision of the Hon'ble Supreme Court in the case of CCE Shilong v. Wood Craft Products Limited is also not of any help because with effect from 1-2-2003, the tariff entries were changed and unless appellants are able to show that retrospective effect has been given to the amendment, the same cannot be considered. We are unab....