TaxTMI 
TaxTMI 
2007 (8) TMI 224
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....o carbon dioxide (CO2) and calcium oxide (CaO). The carbon dioxide contained in the lime stone would escape leaving be hind calcium oxide This calcium oxide, referred to as lime or quick lime or burnt lime would be further, crushed to smaller sizes as per customers' requirements. Apart from calcium oxide, the finished product, i.e. burnt lime would also have traces of certain impurities While calcium oxide would comprise 94 to 96% of the product, the other elements/compounds present in it would be magnesium oxide (MgO constituting less than 1 5%), silicon oxide (SiO2) accounting for less than 1%), sulphur (S which would be less than 0.05%) and R2O3 which has been clarified by the applicant, in the course of the hearing, to be aluminum oxide (A1 which would constitute less than 0.5% 3. The applicant states that the two possible classifications of the high purity burnt lime in the First Schedule (hereafter referred to as the 'tariff) to the Central Excise Tariff Act, 1985 are 2522 under Chapter 25 and 2825 in Chapter 28. Chapter 25 covers "Salt; sulphur earths and stone; plastering materials; lime and cement". The Tariff head 2522 under this Chapter covers "Quick lime, slaked lime....
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....al elements and separate chemically defined compounds containing impurities, or dissolved in water, remain classified in Chapter 28. The term "impurities" applies exclusively to substances whose presence in the single chemical content results solely and directly from the manufacture process (including purification). The substances may result from any of the factors involved in the process and are principally the following : (a) Unconverted starting materials. (b) Impurities present in the starting materials. (c) Reagents used in the manufacturing process (including purification). (d) By-products. It should be noted, however, that such substances are not in all cases referred as "impurities" permitted under Note 1(a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general use, they are not regarded as permissible impurities." Since the impurities in the final product burnt lime are all materials which were present in the "starting materials" i.e. lime stone and since no external substance has been added to burnt lime, the impurities fall in the category of "permissible ....
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....the high purity burnt lime, that they propose to manufacture would be "crystalline in structure in a cubic system" and that the presence of impurities does not affect/retard the crystallization of calcium oxide. 7.1 The Senior Departmental Representative has also submitted detailed technical literature on "Lime and Lime stone" appearing on pages 343-381 in Volume 14 of Encyclopedia of Chemical Technology by Kirk-Othmer and have referred to extracts from Wikipedia on calcium oxide. It appears from a reading of the above literature that calcium oxide is known variously as lime, quick lime, burnt lime etc. and that the terms calcium oxide and lime/quick lime are used interchangeably. This oxide is a white caustic and alkaline crystalline solid that finds extensive use in different fields. While the most primitive use of calcium oxide has been in the building and the construction industry, it is also used for more sophisticated purposes such as for manufacture of chemicals, steel, paper, glass etc. The literature also indicates that calcium oxide is most commonly manufactured by calcining lime stone (CaCO3) in kilns at high temperatures. The heat chemically decomposes the lime stone....
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....dered, levigated, sifted, screened, concentrated by floatation, magnetic separation or any other mechanical or physical process (except crystallization), but not products that have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading 9. A reading of the above indicates that while Chapter Heading 2505 earlier mentioned only "lime' in general terms, without mentioning its different varieties, including quick lime, the present tariff heading clearly mentions quick lime while excluding its predominant constituent viz calcium oxide When the present tariff specifically includes quick lime which is being manufactured and bought and sold in the market, such a product cannot be said to be non-excisable, though the rate of duty is nil at present The fact that the product is obtained by calcination a process debarred by Note 1 of Chapter 25, will not take away the quick lime from the purview of this Chapter as the said note has been amended after the judgment of the Supreme Court, and now begins with the preface "Except where the context or Note 4 to this Chapter otherwise requires " In the context of the present tariff which specifica....
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....cement" and Note 1 of this Chapter clarifies that this Chapter covers only such of the above products which are in the crude state or which have been subjected to some elementary processes such as washing, crushing, grinding, powdering, etc. As mentioned earlier, the product quick lime has varying strengths of calcium oxide While the quick lime which is a less pure form of calcium oxide, is used in buildings, for white washing, cement manufacture etc, the purer versions with higher concentrations of calcium oxide find more sophisticated uses in steel making, manufacture of chemicals, paper, etc. From a reading of the descriptions of goods in the Section, Chapter Heading etc above, it would appear that the quick lime which is more akin to the "mineral product" lime in a relatively crude form, than to a "separate chemically defined compound" would merit classification under Chapter 25 whereas the purer versions containing higher concentrations of the separately defined chemical compound - calcium oxide and with very few impurities would get classified as metal oxide under Chapter 28. It is relevant to mention here that Note 1 in Chapter 28 states that this Chapter contains separate c....
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....sp; 15. The applicant calls the product to be manufactured by it as "high purity burnt lime". The trade name of that finished product, according to the applicant, is steel grade lump lime which is mostly used in the steel industry. It is known as high purity burnt lime for the reason that it will have high calcium oxide content of 94 to 96% According to the applicant, burnt lime/quick lime available in the domestic market in India usually has 75-85% purity in terms of calcium oxide content and in the case of industrial grade, it is 85-90% The end use of the proposed product is primarily in steel industry 16. Wikipedia (the free Encyclopedia) refers to the fact that calcium oxide is / commonly known as burnt lime, caustic lime or quick lime The applicant also states that burnt lime is otherwise known as Quick lime In Encyclopedia of Chemical Technology by Kirk-Othmer, it is stated that the component of calcium oxide ranges between 93 25 and 98% in 'Commercial quick limes' 17. Limes of various descriptions contain predominantly calcium oxide But, some have comparatively less percentage and some have more. The various expressions, viz, quick lime, burnt lime, pebble lim....
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....earned Member at paragraph 12 also lend support to this view point 20. The first attempt of the applicant was to keep out quick lime and burnt lime from the purview of Ch. 25 of Central Excise Tariff That was sought to be done by taking recourse to Note 1 to Ch. 25 and the decision of the Supreme Court m Collector of Central Excise v. Nuchern Industries - 1998 (99) E L T 197 (S.C.). The Supreme Court while interpreting the then existing Note 2 to Ch. 25 held that Quick lime and hydrated lime obtained by calcination would fall outside the scope of Ch. 25. That conclusion was arrived at by the Supreme Court when the relevant Entry in Ch. 25 referred to 'lime' in general terms but not specifically Quick lime. For the reasons stated by the learned Member in para 9, the ratio of that decision cannot be applied to the interpretation o the Heading and the Note as recast With specific inclusion of Quick lime in Ch 25 as an excisable commodity Note 1 (corresponding to the then Note 2) cannot be invoked to exclude Quick lime from Ch 25 The prefatory words in Note 1 "except where the context otherwise requires' (inserted subsequent to the period with which the Supreme Court and CEGAT was c....