TaxTMI 
TaxTMI 
2022 (8) TMI 111
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.... the following submissions : (a) the proposed goods for import viz. NICKEL HYDROXIDE [Ni(OH)2] is the main raw material used to make positive electrode plates used in NICKEL CADMIUM batteries. Nickel-Cadmium batteries are made from two electrodes (Nickel and Cadmium Hydroxide) immersed in a potash solution. The positive electrode consists of Nickel Hydroxide, while the negative one is made from Cadmium. The electrolyte is generally based on Potash. (b) The NICKEL HYDROXIDE compound is majorly NICKEL HYDROXIDE (70-85%) in the compound with a small portion of co-precipitated Cobalt Hydroxide - Co(OH)2 (1-5%), and balance contains Graphite (12-18%) along with moisture (2-8%) for density and free flow ability. (c) The process followed to make Nickel Hydroxide is as follows :- Nickel Sulphate solution and small quantity of Cobalt Sulphate solution is gradually co-precipitated using an aqueous solution of Sodium Hydroxide with constant stirring, forming crystallized Nickel Hydroxide, which is subsequently wash....
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....ate chemical elements and separate chemically defined compounds. Even though in the market parlance the material is known as Nickel Hydroxide, the material proposed to be imported is not mere Nickel Hydroxide, but a mixture/compound of different compounds/elements. Thus, the product appears to be classifiable under Tariff Entry 28539 09 02 as "Other Inorganic compounds" and thus, not qualified to enjoy the benefit under Sr. No. 180 of Notification No. 50/2017-Customs, dated 30-6-2017. (b) The applicant quoted the case of OCL India v. Commissioner of Customs, Visakhapatnam, the Hon'ble Tribunal on the issue of classification of fused Magnesium Chromide. The item under dispute in the case was 69.3% Magnesium Oxide. The said case law is not applicable to the present product as it is not a single compound but it is a mixture/compound of Nickel Hydroxide with constituents of Cobalt Hydroxide [Co(OH)2] and Graphite. 5. The personal hearing was attended by Shri Aranyak Sen, Shri Nischal and Shri Satish Reddy, representatives of the applicant and Shri Vijaykumar Kavilikatta, representative of the jurisdictional Commissioner. The representatives o....
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....sification under the residuary Heading of 28539 09 02 (a 9-digit heading), which does not exist in Indian customs tariff, they presume this is Tariff Entry 2853 90 90 ('other inorganic compounds'). Classification under a residuary heading should be resorted to, only if there is no other heading suitable or more specific to the product. This averment is strongly supported by the following judgments of Hon'ble Supreme Court. (i) Dunlop India Ltd. v. Union of India & Others - (1976) 2 SCC 241 = 1983 (13) E.L.T. 1566 (S.C.) (ii) HPL Chemicals Ltd. v. CCE, Chandigarh reported in 2006 (4)TMI 1 = 2006 (197) E.L.T. 324 (S.C.) (iii) M/s. Bharat Forge and Press Industries (P) Ltd. v. Collector of Central Excise, Baroda, Gujarat - (1990) 1 SCC 532 = 1990 (45) E.L.T. 525 (S.C.). (c) Reliance is placed on the C.B.I. & C. (erstwhile C.B.E. & C.) Circular No. 574/11/2001-CX, dated 22-2-2001. (d) The US Cross Ruling HQ HO26743, while briefly mentions the Tariff Entry 2825 in the beginning of the ruling, the discussion in the ruling is ....
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....ds is primarily Nickel Hydroxide with minor constituent of Cobalt Hydroxide (Co(OH)2) and Graphite. It is therefore, classifiable under Tariff Entry 2825 following the principles of the General Rules of Interpretation. 8.1.3 The jurisdictional Commissionerate, in their letter dated 26-11-2021 has objected to the classification of the proposed goods under Tariff Entry 2825 claiming that even though in the market parlance the material is known as Nickel Hydroxide, the material proposed to be imported is not mere Nickel Hydroxide, but a mixture/compound of different compounds/elements that are having chemically defined compounds. Thus, the product appears to be classifiable under Tariff Entry 28539 09 02 (Other inorganic compounds) and thus not qualified to enjoy the benefit under Sr. No. 180 of Notification No. 50/2017-Customs, dated 30-6-2017. During the course of personal hearing the representative of the jurisdictional Commissioner submitted that if not Heading 2853 Nickel Hydroxide [Ni(OH)2] should be classified under Heading 3824. However, in their additional submissions dated 15-12-2021 they reiterated their initial stand that the proposed goods should be classified und....
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....repeating unit cell. The elements of a separate chemically defined compound combine in a specific characteristic proportion determined by the valency and the bonding requirements of the individual atoms. The proportion of each element is constant and specific to each compound and it is therefore said to be stoichiometric. Small deviations in the stoichiometric ratios can occur because of gaps or insertions in the crystal lattice. These compounds are described as quasi-stoichiometric and are permitted as separate chemically defined compounds provided that the deviations have not been intentionally created." 8.2.2 Further Chapter Note 1 to Chapter 28 of Explanatory Notes to the Harmonized Commodity Description and Coding System (Harmonized System) defines separate chemical elements and separate chemically defined compounds as follows : "Separate chemical 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 compound results solely and directly from the manufacturing process (incl....
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....vided that the quantity added in no case exceeds that necessary to achieve the desired result and that the addition does not alter the character of the basic product and render it particularly suitable for specific use rather than for general use. By application of these provisions anti-caking agents may be added to the products of this Chapter. Such products with added water repellents are, on the other hand, excluded since such agents modify the original characteristics of the products. On the same condition that the additions do not render them particularly suitable for specific use rather than for general use, the products of this Chapter may also contain : (a) Added anti-dusting agents (e.g., mineral oil added to certain poisonous chemicals to prevent dusting during handling). (b) Colouring substances added to facilitate identification or added for safety reasons to dangerous or poisonous chemicals (e.g., lead arsenate of heading 28.42) as a "marker " or warning to those handling the products. Products to which colouring substances have been added for other reasons (e. g., silica gel with cobalt salts a....
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....der residual Heading 2853. Therefore, the ruling is non-speaking order to that extent.] 8.4 Classification of imported goods is governed by the principles set forth in the General Rules of Interpretation (GIR). Rule 1 of GIR provides that for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions [that is, GIRs 2 to 6]. This is the first Rule to be considered in classifying any product. In other words, if the goods to be classified are covered by the words in a heading and the Section and Chapter Notes do not exclude classification in that heading, the heading would apply to the said goods. As required under Rule 1 of GIRs, the classification of the compound of Nickel Hydroxide is determinable according to the terms of heading and relative Chapter Note of Chapter 28 and these headings or Notes do not leave any ambiguity that proposed goods, which is a separately defined chemical compound, is aptly classifiable under HSN Code 2825 40 00 of Heading 28. 8.4.1 As per the chapter notes to Chapter....
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....4.4 As per the general Rule 3(a) of General Interpretation Rules, the specific heading shall prevail over the general heading. In this case there is a specific heading for Nickel Hydroxide under the Tariff Entry 2825 40 00. The Tariff Entry 2853 is a general and residuary entry. In this regard, the Hon'ble Supreme Court in the case of Dunlop India Ltd. & Madras Rubber Factory Ltd. v. Union of India and Others reported in 2002-TIOL-647-SC-CUS-LB, has held as follows : "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" Therefore the proposed goods are appropriately classified under the specific Tariff Entry 2825 40 00. 8.5 The jurisdictional Commissionerate in their initial letter dated 26-11-2021 claimed that the proposed goods should be classified under Heading 2825, however during the hearing has stated that alternate classification could Chapter 38. However, in their final submission dated 15-12-2021 they reiterated their earlier stand that t....