2015 (3) TMI 588 - AT - Customs

Waiver of pre deposit - Benefit of exemption in terms of Notification No. 21/2002-Cus dated 1.3.2002 - import of Crude Palm Oil (CPO) of Edible Grade - Held that - It was submitted that nowhere, the Notification prescribed that if the acid value is more than 10, the product should be considered as non-edible grade. It was also submitted that having sent the samples for testing at Revenue laboratory, the department was bound to follow the report of the Revenue laboratory and in any case it was also submitted that according to precedent decision, the report of the CRCL is to be preferred to any other report. We find that this submission of the appellant is supported by the decision of the Tribunal in the case of appellant themselves as reported at 2013 (11) TMI 393 - CESTAT BANGALORE . Further, it is also noted that Hon ble High Court of Gujarat in the case of Cargill India Pvt. Ltd. Vs UOI 2013 (6) TMI 40 - GUJARAT HIGH COURT had taken the same view which has been followed by the Tribunal. Under these circumstances we find that appellant has made out a prima facie case for waiver and accordingly the requirement of predeposit is waived and stay against recovery granted during the pendency of appeal. - Stay granted.

Summary

Issues:
1. Eligibility for exemption under Notification No. 21/2002-Cus for import of Crude Palm Oil (CPO) of Edible Grade.
2. Discrepancy in acid value testing results between PHO and Customs Revenue Laboratory.
3. Consideration of acid value exceeding 10 as a basis for denying exemption.

Analysis:
1. The appeal involved the eligibility of the Appellant for exemption under Notification No. 21/2002-Cus for importing Crude Palm Oil (CPO) of Edible Grade. The Appellant sought clearance for 11999.18 MTs of CPO for home consumption based on the exemption. However, a sample taken by the Public Health Officer (PHO) showed an acid value exceeding the standard limit of 10. The Appellant requested a re-test by the Central Food Laboratory (CFL), Pune, but due to delays, the goods were cleared urgently. Subsequent tests by the Customs Revenue Laboratory, Mangalore, showed acceptable acid values for most samples, contradicting the initial PHO report.

2. The discrepancy in acid value testing results between the PHO and the Customs Revenue Laboratory was a critical issue. The impugned order deemed the Appellant ineligible for exemption based on the PHO report, which considered the CPO as non-edible grade due to the acid value exceeding 10. The Appellant argued that the Notification did not specify disqualification based on acid value exceeding 10 and emphasized following the report of the Revenue laboratory. The Appellant cited a precedent decision by the Tribunal and a judgment by the Hon'ble High Court of Gujarat supporting their position.

3. The consideration of acid value exceeding 10 as a basis for denying the exemption was a contentious point. The Tribunal acknowledged the Appellant's argument regarding the Notification's conditions and the precedence of the Revenue laboratory report. Citing previous decisions and judicial interpretations, the Tribunal found merit in the Appellant's case for waiver. Consequently, the requirement of pre-deposit was waived, and a stay against recovery was granted during the appeal's pendency, indicating a favorable stance towards the Appellant's position.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's decision, providing a detailed understanding of the legal complexities involved in the case.