2008(09)LCX0111

In the Customs, Excise & Service Tax Appellate Tribunal, Mumbai

Shri M.V. Ravindran, Member (Judicial) and Shri K.K. Agarwal, Member (Technical)

Janata Sales Corporation

Versus

Commissioner of Customs (Import), Mumbai

Final Order Nos. A/565-566/WZB/2008-CII/CSTB dt. 25.9.2008 certified on 23.10.2008 in Appeal Nos. C/1395 & 1400/2002

Advocated By -

Shri P.V. Patankar, Adv. for Appellant
Shri Manish Mohan, SDR for Respondent

Per K.K. Agarwal:

These are two appeals arising out of the same order in appeal and are therefore being decided together.


2. The dispute is essentially that of classification of investment powder imported by the appellant wherein they have classified the same under Chapter 2520.20 as plaster whereas the revenue has sought classification under Chapter 3816.


3. As per literature submitted by the importer, the subject powder is made of silica 73%, calcium sulphate 26% and organic content 1%. Chapter heading 2520.20 of HSN is broadly divided into two sub-heading namely:-

As per the explanatory notes to the HSN:-

Gypsum is a natural hydrated calcium sulphate generally white and friable.

Anhydrite is a natural anhydrous calcium sulphate used in the manufacture of sulphuric acid or of certain types of plaster.

Plaster consists of gypsum partly or completely dehydrated by calcination.


4. Further it has been explained that the characteristic of gypsum is that, when calcined, it loses part of its water thus forming plasters which on being mixed with water set hard. In order that the plasters should be set too quickly small quantities of retarders are often added to calcined gypsum. For special purposes gypsum is calcined until all its water is lost and a small quantity of an accelerator such as alum is added (Keen's cement). Similar plasters are made by adding alum to natural anhydrite. A sample in question was sent for testing and the Dy. Chief Chemist reported that the product is composed of plaster of paris. Further it has been stated that as per the literature available, the product is defined as plaster in the manufacture of investment castings. It is on the basis of above Dy. CC report that the appellant is claiming that the subject goods are plaster falling under Chapter heading 2520.20 as they are composed of gypsum and silica and the essential characteristic is given by gypsum. The revenue on the other hand has
classified it under CH 3816 which reads as under:-

5. It was submitted that the subject goods cannot be classified as refractory, as the refractory is an earthy, ceramic material of low thermal conductivity that is capable of withstanding 1650°C without essential change. As per literature of their product it has been stated that the product should not be used with metals which melts above 1100°C and the maximum burnt out temperature should not exceed 740°C. He refers to the information provided in the Hoben International Information Service where the product in question has been described as a gypsum based investment having a typical silica content of 73%, Calcium sulphate content of 26% and organic content of 1%. It has also been certified that gypsum is an active chemical ingredient and is essential to the character of the mix and therefore, it is rightly classifiable under 2520.20.


6. The Ld. DR however submitted that the HSN explanatory notes makes it clear that the plaster classified under CH 2520.20 is gypsum only which is partly or completely dehydrated by calcination. Also the prepared plasters made after adding only a small amount of retarders or accelerator to the dehydrated gypsum remain classified under this heading but the product in question contains 73% silica and 26% calcium sulphate and therefore it cannot be said to be type of plaster having essential character of gypsum as is being made out by the appellants. He invited our attention to Chapter note to Chapter 25 which says that:-

"The heading of this Chapter cover only products which are in a crude state or which has been washed (without charging the structure of the product) crushed, ground, powdered, levigated, sifted, screened, concentrated by flotation, magnetic separation or other mechanical or physical processes (except crystallisation) but not products which have been roasted, calcined, obtained by mixing or subjected to processing beyond that mentioned in each heading.

Also it has been clarified that the products of this Chapter may contain an added anti-dusting agent, provided that such addition does not render particularly suitable for specific use rather than for general use."


7. It was also submitted that the subject item is an investment powder used in the manufacture of jewel cast. It is having a base of silica 73%, which is a refractory substance and therefore it may be classified under 38.16. The explanatory notes to 38.16 clearly says that the heading also covers refractory composition with a base of silica for the manufacture of dental or jewel moulds. Therefore, use-wise and chemical composition wise the product under question merits classification under 38.16.


8. We have considered the submissions. We find that it is an undisputed fact that the product in question is an investment powder which is used in investment casting namely jewel castings. It is used in the moulds for giving a better finishing to the jewels. As per literature on investment powder, the investment powder is composed of crystobalite, gypsum, silica and modifying agent. Crystobalite is an expanding and contracting form of silica which permits the mould to expand without cracking when it is heated and very hot molten metal is poured into it. Gypsum chemically is hydrated calcium sulphate. When gypsum is heated gently it becomes plaster of Paris. It acts as a binder i.e. it rigidly holds all ingredients together. Silica is a refractory material. It is infusible, i.e., it is not melted or changed by the hot metals cast into it. Silicon dioxide, one form of which is finely crushed is used as silica. Since the subject goods are meant for investment casting the above makes it very clear that gypsum acts as a binder and it is silica only which is used for casting and therefore once the product comprise of 73% silica it is to be considered as providing the essential character. Silica is in the nature of refractory material and is therefore classifiable more aptly under CH 3816 rather than CH 2520.


9. In view of this, we uphold the order of the Commissioner (Appeals) classifying the product under 3816 and reject the appeals.

Equivalent 2008 (089) RLT 0837 (CESTAT-Mum.)

Equivalent 2009 (236) ELT 0262 (Tri. - Mumbai)