Quicklime with Less Than 98% Purity Not Classifiable under Residuary Classification: SC Rules in Favour of ITC Ltd. [Read Judgement]

The Supreme Court has ruled in favour of ITC Ltd. by holding that imported quicklime containing less than 98% calcium oxide purity cannot be classified under the residuary tariff entry meant for chemically pure calcium oxide.

The bench of Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe dismissed the appeal filed by the revenue, noting the decision of Commissioner of Customs (Preventive), Mumbai vs. Viraj Profiles Ltd”, by the apex court itself which was settled against the revenue.

The ITC ltd, respondent (in the appeal before the supreme court court) classified imported “PCC Lime 0/20MM (Quicklime)(Pulp Conversion Chemical)” under Customs Tariff Item (CTH) 2522 1000, which covers quicklime.

However, customs authorities rejected this classification and instead assessed the goods under the residuary tariff entry CTH 2825 9090, treating the product as chemically defined calcium oxide.

CESTAT, noted the case M/s. JSW Steel Ltd. v. Commissioner of Customs, Cochin and observed that Chapter 25 specifically covers “Quicklime, Slaked Lime and Hydraulic Lime,” whereas Chapter 28 applies only to separate chemically defined compounds in pure form. The HSN explanatory notes clarify that Chapter 28 covers calcium oxide only when it is of very high purity, approximately 98% or more.

The Tribunal, relying on the above JSW decision, noted that the imported quicklime in ITC Ltd.’s case had purity levels of below 98%, far below the threshold required for classification as pure calcium oxide under Chapter 28.

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The appellate tribunal decided that “In the Bills of Entry filed, the purity of Calcium Oxide is less than 98% and therefore, the product in question i.e., Quicklime, is rightly classifiable under Customs Tariff Item No. 25221000, following the decision in the case of M/s. JSW Steel Ltd. (supra). In view of this, we do not find any merit in the impugned orders and accordingly, the same are set aside.”

The Revenue challenged the CESTAT order before the Supreme Court.

However, during the hearing, the counsel for the Customs Department acknowledged that the issue had already been settled against the Revenue in the earlier Viraj Profiles decision, which had been confirmed by the Supreme Court in 2024 and which was against the revenue.

Considering this, the Supreme Court dismissed the appeals filed by the department confirming that quicklime with less than 98% Purity rightly classified under Customs Tariff Item No. 25221000.

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