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2007 (7) TMI 527 - AT - CustomsEXIM - DEEC - whether citric acid imported by the appellants herein falls under the category of penetrating agent and hence entitled to duty-free import under the DEEC licence or not? - Held that - there should be no discrimination between different manufacturers of the same goods - citric acid can be considered as a penetrating agent - appeal allowed.
Issues: Determination of classification of citric acid as a 'penetrating agent' for duty-free import under DEEC license.
In this case, the main issue revolves around the classification of citric acid imported by the appellants as a 'penetrating agent' for the purpose of claiming duty-free import under the DEEC license. The adjudicating authority had initially ruled against the importers, imposing a duty demand of Rs. 12,58,525. This decision was based on a letter from the Director of the Central Leather Institute, Madras, stating that citric acid was a masking agent for chromium but not a penetrator. However, the lower appellate authority remanded the case for further consideration after seeking the opinion of the licensing authority on the nature of the goods. Upon review, the appellate tribunal considered various test reports, including those from the Deputy Chief Chemist and the Chief Chemist, which classified the imported goods as penetrating agents. Additionally, the Leather Industries Research Laboratory and the CLRI, Madras, had also opined that citric acid could be deemed a penetrating agent in similar cases involving other importers. Citing the principle of non-discrimination among manufacturers of the same goods, as established by the Apex Court in Damodar J. Malpani v. C.C.E., the tribunal overturned the earlier decision and allowed the appeal, setting aside the duty demand imposed on the appellants. In conclusion, the judgment clarifies the classification of citric acid as a penetrating agent for the purpose of duty-free import under the DEEC license. The tribunal relied on expert opinions and test reports to establish the nature of the imported goods, ultimately ruling in favor of the appellants based on the principle of non-discrimination among manufacturers.
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