Case Law Details
Commissioner of Custom (Preventive) Vs Viraj Profiles Limited (Supreme Court of India)
The matter arose from a dispute regarding the customs classification of quicklime imported by Viraj Profiles Ltd. during the period 12.09.2014 to 04.06.2018. The importer classified the goods under Customs Tariff Item (CTH) 2522 10 00 of the First Schedule to the Customs Tariff Act, 1975 and claimed exemption benefits under Notification No. 50/2017-Customs dated 30.06.2017 and Notification No. 01/2017-Integrated Tax dated 28.06.2017. While examining a Bill of Entry dated 11.06.2018, the Customs Department formed the view that the imported product was a calcined product of limestone falling outside Chapter 25 by virtue of Chapter Note 1 and was classifiable under CTH 2825 90 90, attracting a higher rate of duty. The importer thereafter sought provisional assessment under Section 18 of the Customs Act, 1962. A show cause notice dated 10.07.2019 proposed recovery of differential duty under Section 28(4), confiscation under Section 111(m) and penalties under Sections 114A and 114AA. By Order-in-Original dated 31.10.2019, the Commissioner of Customs (Preventive) confirmed the duty demand for the normal period, reclassified the goods under CTH 2825 90 90, and imposed penalty under Section 112(a). The Assistant Commissioner finalized the provisional assessments on 09.01.2020, and the Commissioner (Appeals), by order dated 05.04.2021, rejected the importer’s appeal and upheld the original order.
Read CESTAT Judgment in this case: CESTAT Allows Classification of Imported Quicklime Under CTH 2522 10 00
Before the CESTAT, the importer contended that it had imported the same product for over twenty years under CTH 2522 10 00. It submitted that the imported quicklime contained 91%–95% calcium oxide, was used in steel manufacturing, and underwent no processing other than calcination. Relying upon Commissioner of Central Excise, Hyderabad-III Vs. M/s Bhadradri Minerals Pvt. Ltd. and Jindal Stainless (Hisar) Ltd. Vs. Commissioner of Customs, New Delhi, it argued that Heading 2825 covers calcium oxide of approximately 98% purity or more, whereas the imported product remained classifiable as quicklime under Heading 2522. The importer also submitted that BIS Standard IS:1540-1 (1980) did not apply to metallurgical industries and that the Advance Ruling in Lhoist India V. CCE was binding only on the parties to that ruling under Section 28J of the Customs Act.
The Revenue argued before the Tribunal that the imported goods were calcined products excluded from Chapter 25 by Chapter Note 1 and that the HSN Explanatory Notes showed that calcium oxide was classifiable under CTH 2825. It contended that the calcium oxide content determined the appropriate classification and that the imported product should therefore be classified under CTH 2825 90 90.
The CESTAT examined Section 12 of the Customs Act, the Customs Tariff Act, the General Rules for Interpretation (GIR), Chapter Notes, tariff entries and HSN Explanatory Notes. It held that classification had to be determined primarily under GIR 1. The Tribunal observed that Heading 2522 specifically covered quicklime, while Heading 2825 covered calcium oxide in the pure state. Referring to the HSN Explanatory Notes, it noted that Heading 2825 contemplated calcium oxide of approximately 98% purity, whereas the chemical test reports in the present case recorded calcium oxide content of 93.8% and 92.27%, along with other materials. The Tribunal also found that BIS Standard IS:1540 (Part-I):1980 did not apply to quicklime used in the metallurgical industry. It further held that the importer was entitled to exemption under Notification No. 01/2017-Integrated Tax dated 28.06.2017, since the imported goods were classifiable under Heading 2522. Following its earlier decisions, including Jindal Stainless (Hisar) Ltd. and Bhadradri Minerals Pvt. Ltd., the Tribunal concluded that the imported goods were correctly classifiable under CTH 2522 10 00, set aside the Commissioner (Appeals)’ order, modified the adjudication order by reclassifying the goods under CTH 2522 10 00, set aside the confirmed duty demands and penalties, and allowed the appeals.
The Revenue challenged the CESTAT’s order before the Supreme Court of India. After condoning the delay and hearing counsel for the appellant, the Supreme Court recorded that it was not inclined to interfere with the judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai, dated 20.10.2023 in Customs Appeal Nos. 85377/2020 and 86172/2021. Accordingly, the Supreme Court dismissed the Civil Appeals, and pending applications, if any, were also disposed of. As a result, the CESTAT’s order classifying the imported quicklime under CTH 2522 10 00, setting aside the duty demands and penalties, and granting relief to the importer remained undisturbed.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Delay condoned.
2. Heard the learned Counsel appearing for the appellant.
3. We are not inclined to interfere with the judgment and order passed by the Custom Excise Service Tax Appellate Tribunal, West Zonal Bench at Mumbai on 20-10-2023 in Custom Appeal Nos. 85377/2020 and 86172/2021 in Final Order No.A/87057-87058/2023.
4. The Civil Appeals are dismissed accordingly.
The Civil Appeals are dismissed of in terms of the signed order.
Pending applications, if any, also stand disposed of.
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