The Rajasthan Authority For Advance Ruling ( AAR ) held that slaked lime containing less than 98% of calcium oxide and calcium hydroxide classifiable as slaked lime. The authority ruled that classification and HSN for supply of slaked lime manufactured by the applicant containing less than approximately 98% of the calcium oxide/hydroxide is classifiable under CTH 2522 20 00.
An application was filed by Balveer Singh before the Authority for Advance Ruling. The applicant is presently an unregistered person intending to start the business of manufacture and sale of hydrated lime ( also known as slaked lime ).
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The issue to be decided is the classification of slaked/hydrated lime containing less than 98% of the calcium oxide and calcium hydroxide and the applicable rate of tax under GST. In Sanwar Agarwal v. Commissioner of Customs (2016.), it was inter alia held that “just as a special law in a particular field would prevail over a general low that may be operational in that field, a heading with a more specific description would prevail over a heading with a more general description”
The reference is also made to the HSN explanatory notes provided by the World Customs Organization. The Explanatory Notes as approved by the WCO Council, constitute the official interpretation of the Harmonized System at the international level and are an indispensable complement to the System. HSN explanatory notes are a good guide for determining as to how a particular HSN heading is understood in trade and commerce parlance across world.
It was submitted that the HSN Explanatory Notes, while not legally binding, they do represent the considered views of classification experts of the Harmonized System Committee. It is well settled that the explanatory notes have persuasive value and in the event of disputes, the Indian Courts have upheld seeking recourse to the explanatory notes while determining classification. of products.
It was observed that Chapter 2522 of Customs Tariff covers Quicklime, Slacked Lime and Hydraulic Lime, Other Than Calcium Oxide and Hydroxide of Heading 2825 and CTH 2522 10 00 covers Quicklime and CTH 2522 20 00 covers slacked lime..
As per General Notes to HSN Explanatory Notes to Chapter 25, 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 slacked lime ( calcium hydroxide ). Slacked lime is usually employed for soil improvement or in the sugar industry.
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.
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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 slacked lime ( calcium hydroxide ) are excluded ( heading 25.22 )
It was evident that chapter 2825 covers only Calcium oxide, hydroxide in the pure state ( i.e., containing practically no clay, iron oxide, manganese oxide, etc. ) approximately 98% calcium oxide. The laboratory analysis reports furnished by the applicant reveals that the calcium hydroxide/oxide composition in the said goods are less than 98% and impurities are also available in such goods.
The AAR held that classification and HSN for supply of slaked lime manufactured by the applicant containing less than approximately 98% of the calcium oxide/hydroxide is classifiable under CTH 2522 20 00.Further held that the rate of tax of the subject goods is at 2.5% CGST and 2.5% SGST as per entry Sl. No. 131 of Schedule I of Notification No. 1/2017-C.T. (Rate), dated 28-6-2017 as amended.
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