2026-VIL-326-GSTAT-RJK
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  2. 2026-VIL-326-GSTAT-RJK

SGST Tribunal

GST - Classification of chuna in slurry and paste form - Whether goods obtained by mixing slaked lime with water, calcium carbonate and glycerin are excluded from heading 2522 by Note 1 to Chapter 25 - Respondent purchased slaked lime and made chuna by physical mixing with water and fillers, and classified it under tariff item 2522 20 00 at the lower rate - Appellant-Revenue issued an SCN under Section 74 proposing classification under tariff item 2106 90 99 as a food preparation at the higher rate, relying on Note 1 to Chapter 25 which excludes products obtained by mixing. The adjudicating authority confirmed the demand, but the Commissioner (Appeals) set it aside - Whether the goods are excluded from heading 2522 by Note 1 to Chapter 25 - HELD - Every limb of the exclusion in Note 1 is subject to its opening words, namely that the headings cover such products except where their context otherwise requires. The Hon'ble Supreme Court held in the case of calcined china clay that the exclusion of calcination does not apply where the context otherwise requires. The context need not arise only from express words of process in the heading, as the Revenue itself accepts that quicklime and slaked lime, products of calcination and hydration, fall in heading 2522 which contains no such words, and the Explanatory Note recognises that certain headings refer to goods which by their nature are subjected to a process not provided for by Note 1. Slaked lime itself is produced by bringing quicklime and water together, so mixing of lime and water cannot by itself attract the exclusion. The test is whether the goods as obtained remain the slaked lime named in the heading - On admitted facts the process is simple physical blending without any chemical reaction, the additions are fillers, a diluent and a soothing agent, no new article emerges, and the essential character is that of slaked lime. Non-conformity with grades of hydrated lime only shows that the goods are not purified calcium hydroxide of heading 2825. The anti-dusting proviso is merely permissive and does not cut down the opening words - The goods are not excluded from heading 2522 by Note 1 and are classifiable under tariff item 2522 20 00 – The appeals filed by the Revenue are dismissed - Classification of chuna - Whether chuna is a food preparation of heading 2106 - Appellant-Revenue relied on the food additive licence held by the Respondent, Supplementary Note 5 to Chapter 21, the Explanatory Note to heading 21.06 and Note 1(b) to Chapter 38, contending that chuna is a preparation made by combining ingredients to a fixed recipe - Whether the goods are covered by heading 2106 - HELD - Heading 2106 applies only to food preparations not elsewhere specified or included and yields to any heading that covers the goods, since goods with a reasonable claim to a specific heading cannot be consigned to a residuary entry, as held by the Hon'ble Supreme Court - Chuna is not consumed directly or after processing such as cooking or dissolving, and is applied in small quantities to betel leaf or mixed with areca nut and tobacco as an ingredient. None of its constituents is a foodstuff, and the Revenue itself treated calcium carbonate and glycerin as chemicals of other Chapters, while its contention that they are dietary ingredients was unsupported by technical evidence. Pan masala and supari have their own tariff items, and lime is named in the Supplementary Notes only as an ingredient, which does not make lime itself a preparation of heading 2106 - The headings, Supplementary Notes and Explanatory Notes describe articles which are themselves food, and chuna bears no resemblance to that class. A licence under a regulatory statute does not determine classification, and under that statute a food additive is a substance not normally consumed as food by itself and cannot be equated with food - Note 1(b) to Chapter 38 is merely an exclusionary Note and its premise of a mixture of chemicals with foodstuffs is not established. That the goods are prepared by a process does not make them food preparations - The goods are not covered under heading 2106 or tariff item 2106 90 99 - The appeals filed by the Revenue are dismissed - Application of General Rules of Interpretation and test reports - Application of Rules 2(b), 3 and 4 of the General Rules of Interpretation and relevance of test reports - Whether the goods are correctly classifiable under tariff item 2522 20 00 on application of the General Rules - HELD - The premise that Note 1 removes heading 2522 fails in view of the earlier finding. Rule 2(b) extends a heading to mixtures of the named material, so the goods are prima facie classifiable by reference to slaked lime, while heading 2106 does not refer to any material of which the goods consist - Under Rule 3(a), heading 2522 which names slaked lime is more specific than the residuary heading 2106. Under Rule 3(b), mixtures are classified by the component giving essential character, which is slaked lime, and the route adopted in the SCN therefore leads to heading 2522. Rules 3(c) and 4 are rules of last resort and would also lead to heading 2522, as it occurs last in numerical order and the goods are most akin to lime - The conclusion rests on the statutory text read with the Explanatory Notes and not on commercial parlance - The goods are classifiable under tariff item 2522 20 00 attracting the lower rate, the demand of differential tax, interest and penalty does not survive - The appeals of the Revenue are dismissed and the impugned order is upheld.
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