CESTAT | Calcite Sand (Calcite Powder) to be classified under CT 2503 9030, Tribunal allows appeal

Customs, Excise and Services Tax Appellate Tribunal (CESTAT): A Division Bench comprising of Ramesh Nair (Judicial Member) and Raju (Technical Member), allowed an appeal in the issue involving the question of whether the Calcite Sand (Calcite Powder) imported by the Appellant was classifiable under CT 2503 9030 or was required to be classified under CTH 2836 5000 as per the impugned order.

Samples were drawn from the imports made under different Bills of Entries, and Kandla Customs Laboratory had reported that the goods were “Uncoated Precipitated Calcium Carbonate”. Since the Precipitated Calcium Carbonate was not a mineral product, but a chemical classifiable under CTH 2836 5000, differential duty demand of 2.5% BCD was raised vide SCN on the Appellant in respect of imports made under 56 Bills of Entry, compared to NIL BCD assessed in such BEs at the time of import made under CTH 2503 9030. This demand was confirmed vide the impugned order which led to confiscation, redemption fine and penalties being imposed on the Appellant. The counsel for the appellants, Mr. S.R. Dixit contended that the samples were not drawn properly as per Clause 4.1- APPEDIX B IS: 918: 1985 pertaining to Calcium Carbonate, Precipitated for Cosmetic Industry. He also submitted that the CBEC vide Circular No.43/2017-Cus dt.16-11-17 has categorically admitted that Customs Laboratories were incapable of testing calcite powder due to lack of infrastructure and the Customs labs became so equipped only in the year 2019, as evident from CBEC Circular No.15/2019-Cus dt.7-6-19. It was his submission that in any case, the findings of test reports should be restricted to particular lot of goods imported under respective BEs and not to all past imports.

The Tribunal while allowing the appeal set aside the impugned order and stated that it was true that test report of CRCL cannot be brushed aside lightly, however, when CBEC itself categorically admits that for calcite powder, their Labs were not equipped to test the same till 2019, the Kandla Customs Chemical Lab reports as relied upon in the impugned order have to be discarded. The Tribunal further applied the cases of 20 Microns Ltd. v. Commr. Of Customs, 2019 SCC OnLine CESTAT 3945, Central Excise and Service Tax v. Manikya Creations Pvt Ltd, 2019 (365) E.L.T. 130 (Tri. – All.) and Pavas Polychem (P) Ltd. v. Commr. Of Customs, 2017 SCC OnLine CESTAT which were relied on by the appeallant. [Asian Granito India Ltd. v. C.C.-Mundra, Customs Appeal No. 11292 of 2017, decided on 25-08-2020]

Suchita Shukla, Editorial Assistant has put this story together