GUJARAT AMBUJA EXPORTS Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) THE appellants filed Bill of Entry on dated 15 -9 -2003 for clearance of the goods declared as Crude Palm Oil (Edible grade) (hereinafter referred to as Crude Palm Oil), classifying the same under CTH 1511 10 00 claiming concessional rate of duty under Sr. No. 34 of Notification No. 21/2002 -Cus., dated 1 -3 -2002. However, the claim for exemption under Notification No. 21/2002 -Cus, dated 1 -3 -2002. (Sl. No. 34), after getting Crude Palm Oil imported by the appellant tested by the Chemical Examiner and based on the test report of chemical examiner, impugned order -in -appeal No. 229/2006, dated 31 -8 -2006 has been passed whereby it has been held that Crude Palm Oil imported by the appellant is classifiable under CTH No. 1511 90 90 and is required to be assessed on the basis of invoice value and not on the basis of tariff value which had been claimed by the appellant. The appellants imported another consignment of Crude Palm Oil (Industrial grade) classified the same under CTH 1511 90 90 vide Bill of Entry dt. 6 -2 -2006 and claimed the benefit of concessional rate of duty under Notification No. 21/2002, dated 1 -3 -2002. In this case, the Commissioner (Appeals) held that Crude Palm Oil imported by the appellant is correctly classifiable under CTH 1511 10 00. Thus, in respect of the same Crude Palm Oil, the department has proposed classifying under two different subheadings and this has happened because in the first instance, the invoice value was higher than the tariff value and the department wanted to assess the goods on the basis of invoice value. In the second instance, it was the appellants claim that the imported goods should be classified under CTH 1511 90 90 whereas the department took a stand that it should be classified under CTH 1511 10 00 and denied the benefit of exemption notification claimed by the appellant. In both the cases, the product imported was Crude Palm Oil and in the first instance, it was edible grade and in the second instance, it was industrial grade. The appellants filed appeal against both the decisions.

(2.) SHRI P.M. Dave, learned advocate on behalf of the appellant submitted that in the first instance, in respect of importation in 2002, the appellants had not claimed any exemption at all. They had declared that the product imported by them is Crude Palm Oil and if their declaration was accepted, the assessment would have been on the basis of tariff value which was fixed at USD 390 PMT at that time whereas the invoice value was USD 400 PMT. He submits that for the purpose of classifying the goods under 1511 90 90, the department relied upon the test report from the chemical examiner which reveals that the acid value was 8.99% and total carotenoids content (as beta -carotene) was 395 mg/kg. Based on this test report, the lower authorities took a view that the goods did not meet the requirement of Crude Palm Oil as laid down by CBEC Circular No. 85/2003. He also submitted that the notification which prescribed the tariff value under which they wanted their goods to be assessed, fixed the tariff value in respect of Crude Palm Oil and Chapter heading indicated is 15.11. According to him, this shows that irrespective of sub -heading under which Crude Palm Oil is required to be classified, the assessment has to be made on the basis of tariff value, if it is shown that the product imported is Crude Palm Oil. The department has relied upon the test report which has indicated the acid value and the carotenoid content in the oil. According to the HSN, Palm Oil is considered to be crude if it has not undergone any processing other than decantation, centrifugation or filtration provided that in order to separate the oil from the solid particles only mechanical force such as gravity, pressure or centrifugal force has been employed excluding any adsorption filtering process, fractionation or any other physical or chemical process. He submits that it was not sufficient for the department to get the Palm Oil examined for acid value and carotenoid content to come to the conclusion as to whether the product is Crude Palm Oil or not as per description given in the tariff. He also submits that Chemical Examiner, during the cross examination, admitted by testing the sample, he would not be able to say whether the oil had undergone any such process under HSN. He drew our attention to the chemical examiners report wherein he stated that for the purpose of ISI, palm oil is referred to as refined or raw and Chemical Examiner has also stated that the imported goods were raw palm oil. He submits that raw palm oil which has been defined in the ISI and Crude Palm Oil which has been explained in HSN, are one and the same. Further, he also submits that the circular relied upon by the Revenue for the purpose of classification of the imported oil as Crude Palm Oil, was issued in view of the fact that Crude Palm Oil was given a very specific definition vide Notification No. 120/2003 -Cus., dated 1 -8 -2003. He submits that reliance on this circular which was issued in the context of an exemption notification for classification purpose was totally wrong. He drew our attention to the second order of the Commissioner (Appeals) dated 3 -6 -2008 in respect of another consignment imported by them where the appellants had submitted that in terms of definition of Crude Palm Oil as given in the notification, the oil imported by them cannot be considered as Crude Palm Oil. The Commissioner has observed in his order to me, the description or specification given in the notification are not relevant for classification. I find that the JAC has given cogent reason in the OIO. In that case, the appellants had claimed that the acid value was not more than 2% and the carotene value was also not in the range of 500 mg/kg to 2500 mg/kg. He submits that in that case, without denying that the imported oil did not fulfil the parameters as given in the notification, it was held that for classification, the description given in the notification cannot be considered. Therefore, he submits that the department has attempted to classify the goods based on the revenue that can be realised and not on the correct principles of classification. He also submits that the appeal filed by them in respect of the earlier consignment which seeks classification of Crude Palm Oil under CTH 1511 10 00 may be allowed since their contention in that appeal was that the goods should be classified first and thereafter rate of duty has to be determined.

(3.) LEARNED SDR, on the other hand, stated that the products imported by the appellant were different. In the first import, the goods were edible grade whereas in the second case, it was industrial grade. Therefore, both the orders are required to be upheld.