2005 (11) TMI 144

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.....06. The Appellants during the course of adjudication proceedings alternatively claimed classification of the said Calcined China Clay under chapter Heading 25.05. By the impugned order, the respondent has classified the said Calcined China Clay under chapter sub heading 3824.20. 1.2 The appellants procure raw 'kaolin' in its ore form, which is a naturally occurring hydrated aluminium silicate. This raw kaolin is crushed and fired in klin which is heated to a temperature of about 1200 degree C. This process of calcinations removes excess water. The material emerging from the klin is in lumpy form which is crushed and agglomerated. The particles are then separated as per required size. 2.1 Note 2 to Chapter 25 as introduce on 1....

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....990, Note 2 to Chapter 25 as it stood immediately prior thereto was substituted as follows. "Except where their context otherwise requires, Heading Nos. 25.01, 25.03 & 25.05 covers only products which have been washed (even with chemical substances eliminating the impurities without changing the structure of the product.) crushed, ground, powdered, levigated, sifted, screened, or concentrated by flotation, magnetic separation or other mechanical or physical process (except crystallization) but not products that have been roasted, calcined or obtained by mixing." 2.6 The Finance Act, 1995, deleted all the sub headings under Heading 25.05 with the result the statute book contained only the main tariff Heading 25.05 with the enactm....

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....nactment of Finance Act, 1990. During this period the undisputed position would be that the calcined China clay is indeed covered by the description, "mineral substances not elsewhere specified" of Heading 25.05. 3.1 Till 16-3-1995, Notification No. 7/92, dtd 1-3-92 as amended exempted all goods falling under heading or sub heading of 25.05. The effective rate was therefore nil. The 1995 Budget, incorporated the effective rate of duty in the tariff itself. The exemption notification was rescinded, all the sub headings of 25.05 were deleted and the tariff rate for the Heading 25.05 was specified as nil. The budget circular, of 1995, (see 1995 (7) RLT M91) clearly reflects this position. Following is the relevant extract of budget circular....

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....l under Heading 25.05 of Central Excise Tariff attracting nil rate of duty being the tariff rate applicable to that If heading. 3.4 Note 2 to chapter 25, no doubt, indicates that the Heading 25.05 does not apply to products that have been calcined. However chapter note begins with the expression "except where the context otherwise requires" this expression was introduced by the Finance Act, 1990 simultaneously with the specific enumeration of calcined China clay in heading 2505.10. If the interpretation were to be that any calcined product were outside heading 25.05, then the specific enumeration of calcined China clay, under heading 2505.10 would be an exercise in futility. It is settled law that no interpretation should be adopted that....