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2023 (10) TMI 1260
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....No.120) for BCD and Notification No. 01/2017- Integrated Tax dated 28.06.2017 of Schedule-I (Serial No.131) for IGST. While examining the B/E No. 6739528 dated 11.06.2018, the department interpreted on the basis of preliminary reading of Note 1 to Chapter 25 of the Customs Tariff Act, 1975 that the imported product is a calcined product of mined limestone, which has been roasted or calcined, and thus falls out of the purview of classification under chapter 25, and is rightly classifiable under tariff item/CTH 2825 90 90, attracting higher rate of import duties @ 7.5% BCD, 18% IGST and 10% SWS. On pointing out the above observations of the department, the appellants had sought for provisional assessment of the imported goods under Section 18 of the Customs Act, 1962, under CTH 2825 90 90 by executing the provisional duty bonds. Accordingly, the department had initiated show cause proceedings by issue of Show Cause Notice (SCN) dated 10.07.2019 for recovery of differential duty of Customs under Section 28(4) ibid along with interest thereon and for confiscation of imported goods under Section 111(m) ibid, imposition of penalties under Section 114A, 114AA ibid. The Order-in-Original d....
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....have been importing the subject goods in the past for more than 20 years and classifying the same under CTH 2522 10 00 of the Customs Tariff Act and the department are well aware that they were clearing it without any demur. It is only in the year 2018, an enquiry into the import of the subject goods was commenced which culminated into issuance of a show cause notice and the impugned order by the Commissioner of Customs (Preventative), Mumbai wherein the demand of differential customs duty for normal period amounting to Rs. 3,72,66,955/- has been confirmed against the appellants on the ground that the subject goods are classifiable under CTH 2825 90 90 and are not eligible for exemption benefit under the notifications, as they ought to have been classified under CTH 2825 90 90 of the Customs Tariff Act, 1975. 2.3 Furthermore he submitted that the issue of classification in the above case is no longer res integra in view of the decision of the Tribunal in the case of Commissioner of Central Excise, Hyderabad-III Vs. M/s Bhadradri Minerals Pvt. Ltd. reported in 2015 (324) E.L.T. 395 (Tri.-Bang.) and Jindal Stainless (Hisar) Ltd. Vs. Commissioner of Customs, New Delhi, reported in ....
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....arise. 3.1 Learned Authroised Representative (AR) appearing for the Revenue reiterated the findings recorded by the learned Commissioner (Preventive) in the impugned order and stated that the appellant have been importing Hi Cal Quicklime from M/s Carmeuse Majan LLC, Oman and M/s Ras Al Khaimah Lime Co. 'Noora', UAE. The declared description in the bills of entry is 'Quicklime' under CTH 25221000. The imported quicklime is used by the appellants for removing impurities from steel, as part of manufacturing process, in their smelting plant. As the department had noticed that the imported product was calcined product of the mined limestone and preliminary reading of Note 1 to Chapter 25 showed that the products which have been roasted or calcined, fell out of the purview of classification under Chapter 25, they resorted to reclassification of the goods. Further, the Department claimed that the Hi Cal Quicklime was a manufactured product, obtained by calcinations and did not merit classification under CTH 2522 10 00. Thus in respect of B/E No. 6739528 dated 11.06.2018 in which the mis-classification was noticed and thereafter all the assessments were done on provisio....
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....ed the additional written submissions given in the form of paper book by learned Advocate for the appellants as well as Authorised Representatives for the Revenue, and the arguments advanced during the hearings of this case. 5. Brief issue for consideration before us is the classification of imported goods by the appellants as to whether, the same merits classification under Customs Tariff Item 2522 10 00 as claimed by the appellants; or, is it classifiable under Customs Tariff Item 2825 90 90 as contended by the Department, for deciding on the appropriate levy of customs duty, in respect of various Bills of Entries filed during the disputed period. 6. In order to address the above issue of classification of imported goods, we would like to refer the relevant legal provisions contained in Section 12 of the Customs Act, 1962; the Customs Tariff Act, 1975 and rules framed thereunder for consideration of proper and appropriate classification of the subject goods under dispute. "Section 12. Dutiable goods. - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specif....
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....of rule 3. 3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. (c) When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among thos....
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....cription of the article or group of articles which has "-" or "--". 2. The abbreviation "%" in any column of this Schedule in relation to the rate of duty indicates that duty on the goods to which the entry relates shall be charged on the basis of the value of the goods as defined in section 14 of the Customs Act, 1962 (52 of 1962), the duty being equal to such percentage of the value as is indicated in that column. 3. In any entry, if no rate of duty is shown in column (5), the rate shown under column (4) shall be applicable. ADDITIONAL NOTES In this Schedule,- (1)(a) "heading", in respect of goods, means a description in list of tariff provisions accompanied by a four-digit number and includes all sub-headings of tariff items the first four-digits of which correspond to that number; (b) "sub-heading", in respect of goods, means a description in the list of tariff provisions accompanied by a six-digit number and includes all tariff items the first six-digits of which correspond to that number; (c) "tariff item" means a description of goods in the list of tariff provisions accompanying eightdigit number and the rate of ....
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....e of determining correct classification of imported goods: (i) classification of goods shall be determined according to the terms of the headings and any relative Section or Chapter Notes; (GIR 1) (ii) reference to an article, shall also include such article in the incomplete or unfinished state, subject to the condition that article, as presented, has the essential character of the complete or finished article. Further, reference in a heading to a material or substance shall be taken to include mixtures or combinations of that material or substance with other materials or substances, and to goods consisting wholly or partly of such material or substance; (GIR 2) (iii) if the goods are found to be classifiable under two or more headings, then the classification shall be effected as per the rules provided under 3(a), 3(b) and 3(c) [GIR 3] (iv) Goods which cannot be classified in accordance with the aforesaid rules, then the same shall be classified under the heading appropriate to the goods to which they are more akin. (GIR 4) (v) For legal purposes, the classification of goods in the subheadings shall be determined according to the terms....
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....ty Standard Preferential Areas (1) (2) (3) (4) (5) "Hydrazine and hydroxylamine and their inorganic salts; other inorganic bases; other metal oxides, hydroxides and peroxides 2825 10 - Hydrazine and hydroxylamine and their inorganic salts : 2825 10 10 --- Hydrazine anhydrous Kg. 10% - 2825 10 20 --- Hydrazine hydrate Kg. 10% - 2825 10 30 --- Hydrazine sulphate Kg. 10% - 2825 10 40 --- Hydroxylamine sulphate Kg. 10% - 2825 10 90 --- Other Kg. 10% - 2825 20 00 - Lithium oxide and hydroxide Kg. 10% - 2825 30 - Vanadium oxides and hydroxides: 2825 30 10 --- Vanadium pentaoxide flakes Kg. 10% - "Tariff Item Description of goods Unit Rate of Duty &nbs....
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....25 provide for coverage of the goods under its scope which are specifically mentioned as Hydrazine and hydroxylamine and their inorganic salts; other inorganic bases; other metal oxides, hydroxides and peroxides. However, if any inorganic basis or metal oxides, hydroxides and peroxides which are not specifically mentioned therein by a specific tariff entry, then they will be classified under "other" category in sub-heading 2825 90. 10.2 We find that Heading 2522 covers within its scope and ambit, mainly of three specific goods such as the following: (i) first one i.e., "quicklime"; (ii) the second one, "slaked lime", and (iii) third one, "hydraulic lime". Hence, in simple words, it can be stated that all the goods covered under the above description at (i) to (iii) above would be rightly classifiable under chapter heading 2522. There is no dispute on the fact that the imported goods in the present case are 'quicklime' and thus by applying GIR 1 would be classifiable under tariff item 2522 10 00. Further, from the exclusion provided for calcium oxide and hydroxide of heading 2825, it transpires that the quicklime as a mineral product, when subjected ....
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....for application of Rule 3 of GIR in this case. In view of the above, we are of the prima facie view that the imported goods are appropriately classifiable under CTH 2522 10 00. 11. Revenue has also contended that the imported goods are rightly classifiable under tariff item 2825 90 90, as 'calcined' quick lime is excluded from the scope of coverage of goods under Chapter 25 in terms of its Chapter Note 1 and on the basis of HSN explanatory notes 1(a) to Chapter 28, B(11) of tariff entry 28.25, presence of impurities, BIS 1540-1 (1980), GIR 3(c), which have been discussed in detail and summarized in paragraph 201 of the impugned order dated 31.10.2019. 12.1 Therefore, in order to decide further within the two Chapter Headings 2522 or 2825, whether the imported goods fall under the first category as 'quicklime' or under the second category 'calcium oxide', one needs to look further into relative Section or Chapter notes. Further, as both the appellants and Revenue have relied upon the HS explanatory notes of the World Customs Organization (WCO), for classification of impugned goods and as these HS explanatory notes describe in detail the scope and coverage of the goods under th....
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....bstones and flagstones (heading 6801); mosaic cubes or the like (heading 6802); roofing, facing or damp course slates (heading 6803); (f) precious or semi-precious stones (heading 7102 or 7103); (g) cultured crystals (other than optical elements) weighing not less than 2.5g each, of sodium chloride or of magnesium oxide, of heading 3824; optical elements of sodium chloride or of magnesium oxide (heading 9001); (h) billiard chalks (heading 9504); or (i) writing or drawing chalks and tailors' chalks (heading 9609). 3. Any products classifiable in heading 2517 and any other heading of this Chapter are to be classified in heading 2517. 4. Heading 2530 applies, inter alia, to: vermiculite, perlite and chlorites, unexpanded; earth colours, whether or not calcined or mixed together; natural micaceous iron oxides; meerschaum (whether or not in polished pieces); amber; agglomerated meerschaum and agglomerated amber, in plates, rods, sticks or similar forms, not worked after moulding; jet; strontianite (whether or not calcined), other than strontium oxide; broken pieces of pottery, brick or concrete." 12.2 In this regard, we find that ....
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....y notes for sub-heading 2522, the extract of which is given below: "Harmonized Commodity Description and Coding System Explanatory Notes 25.22 - Quicklime, slaked lime and hydraulic lime, other than calcium oxide and hydroxide of heading 28.25. 2522.10 - Quicklime 2522.20 - Slaked lime 2522.30 - Hydraulic lime Quicklime (an impure calcium oxide) is obtained by calcining limestone containing very little or no clay. It combines very rapidly with water, giving off considerable heat and producing slaked lime (calcium hydroxide). Slaked lime is usually employed for soil improvement or in the sugar industry. Hydraulic lime is obtained by low temperature calcination of limestone containing sufficient clay (although usually less than 20%) to ensure that the product sets under water. Hydraulic lime differs from natural cement in that it still contains appreciable amounts of uncombined quicklime, which may be slaked with water. The heading excludes purified calcium oxide and calcium hydroxide (heading 28.25)." The above explanatory notes to sub-heading 2522 clearly provide that 'quicklime' and 'hydra....
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....w laid down by the Supreme Court is finding on the Tribunal and the authorities. If, however, it is the stand of the department that the exclusion of roasted or calcined items, in terms of the subject Chapter Note, is only from Chapter 25 or, more particularly, Tariff Headings 25.01, 25.03 and 25.05 and not to make such products non excisable, if, they fall in other Chapters or under other Headings, appropriate action may be considered by the Government. In fact, Tariff sub-heading 2505.60 which mentions quick lime, slaked lime and hydraulic lime refers to such goods other than calcium oxide and hydroxide of Heading No. 28.25 which would point to the latter two products falling under that heading which covers, inter alia, inorganic chemicals, that chapter itself falling in Section VI which covers products of the Chemical or Allied Industries. As against this, Chapter 25 under which, lime falls is in Section V which covers mineral products. Chapter Note 2 under Chapter 25 covers only material falling under 25.01, 25.03 and 25.05 which have been subjected to mechanical or physical processes for eliminating impurities without changing the structure of the product but not products that....
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....ina in appearance. (11) Calcium oxide, hydroxide and peroxide. This heading covers only the oxide (CaO) and the hydroxide (Ca(OH)2), in the pure state (i.e., containing practically no clay, iron oxide, manganese oxide, etc.), Such as the product obtained by calcining precipitated calcium carbonate. The heading also covers fused lime obtained by fusing ordinary quicklime in an electric furnace. This product has a high degree of purity (approximately 98% calcium oxide); it is crystalline and generally colourless. It is used, in particular, for refractory linings for furnaces, in the manufacture of crucibles and for addition to concrete, in small pieces, to increase its resistance to wear. Calcium peroxide (CaO2) is a white or yellowish powder, hydrated usually with 8 H2O), sparingly soluble in water. Used as a bactericide and as a detergent, in medicine and in the preparation of cosmetics. Quicklime (calcium oxide) and slaked lime (calcium hydroxide) are excluded (heading 25.22)." From perusal of the detailed coverage of the goods under the scope of the above entries particularly those under in the sub-heading 282590, at first para of B....
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.... 28thJune, 2017 G.S.R. (E).-In exercise of the powers conferred by sub-section (1) of section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the integrated tax of- (i) 5 per cent. in respect of goods specified in Schedule I, (ii) 12 per cent. in respect of goods specified in Schedule II, (iii) 18 per cent. in respect of goods specified in Schedule III, (iv) 28 per cent. in respect of goods specified in Schedule IV, (v) 3 per cent. in respect of goods specified in Schedule V, and (vi) 0.25 per cent. in respect of goods specified in Schedule VI appended to this notification (hereinafter referred to as the said Schedules), that shall be levied on inter-State supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. S. No. Chapter / Heading / Sub-heading / Tariff item No. Descr....
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....n their suitability to specific uses on the basis of chemical properties such as follows: Grade A - Bleaching powder, paper, textiles and varnish manufacture Grade B - Sugar and calcium carbide industry Grade C - suitable for soda ash, caustic soda by lime soda process, water treatment and tanning industry. Thus, we find that the IS:1540 is not applicable for the quicklime used in the manufacturing process of iron & steel industry as in the present case. 17. We also observe that the CBEC's Circular No.18/91-CX.3 in F. No. 112/6/91-CX3 dated 10.07.1991 which was issued in the context of classification of 'burnt lime' under sub-heading 2505.60 not being directly related to the issue of impugned goods and the decision given by the Authority for Advance Ruling in Lhoist India supra, apply only in respect of the applicant who had sought it and the related jurisdictional Customs authorities for that applicant in terms of Section 28J ibid, we do not find it necessary to examine these aspects in the present case. 18. We also find that on similar issue of classification of quick lime the Co-ordinate Bench of the Tribunal in the case Jindal Stainless (Hisa....
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.... Tariff Heading 28.25 also excludes Calcium Oxide which has a purity less than 98% from Chapter 28 in view of the fact that what is covered under 28.25 is Calcium Oxide of purity 98%. The relevant Chapter Note is reproduced below : "(11) Calcium Oxide, Hydroxide and Peroxide : This Heading covers only the oxide (CaO) and the hydroxide (CaOH), in the pure state (i.e. containing practically no clay, iron oxide, manganese oxide, etc.) such as the product obtained by calcining precipitated calcium carbonate; The Heading also covers fused lime obtained by fusing ordinary quicklime in an electric furnace. This product has a high degree of purity (approximately) 98% calcium oxide; it is crystalline and generally colourless. It is used, in particular, for refractory linings for furnaces, in the manufacture of crucibles and for addition to concrete, in small pieces, to increase in resistance to water. Calcium peroxide (CaO) is a white or yellowish powder, hydrated (usually with 8 H2O) sparingly soluble in water. Used as a bactericide and as a detergent, in medicine and in the preparation of cosmetics. Quicklime (calcium oxide) and slaked lime (calcium Hyd....