2018 (6) TMI 1218 - AT - Customs

Benefit of N/N. 21/2002-Cus dated 12th March 2002 - denial on the ground of beta-carotene content in the crude palm oil imported by M/s Ruchi Soya Industries Ltd. being below the prescribed to disentitle them from the privilege - Held that - The test result relied upon by Revenue is that of the remnant by the Central Revenue Control Laboratory after the samples drawn on board on 6th June 2004 and from shore tank on 9th June 2004 had shown contradictory levels of beta carotene. The samples of both tested at Kandla on 3rd July 2004 was in favour of importer while samples tested at Vadodara on 30th July 2004 was marginally below the threshold in the notification. The various tests of the samples were effected over a period of four months and there is a consistent decline in the distinguishing content. Furthermore the first test at Kandla passes muster. No evidence to establish that carotene content was never above the threshold of 500 mg/kg has been placed on record. Appeal dismissed - decided against Revenue.

Summary

Issues:
- Benefit of exemption under notification no. 21/2002-Cus dated 12th March 2002 based on beta-carotene content in imported crude palm oil.
- Validity of test results and expert opinions regarding the reduction of carotene content over time.
- Discrepancies in test results from different laboratories and locations.
- Interpretation of the exemption notification criteria for crude palm oil.
- Dismissal of appeal by Revenue and disposal of cross-objection.

Analysis:
1. The primary issue in this case revolves around the benefit of exemption under a specific notification based on the beta-carotene content in the imported crude palm oil. The Commissioner of Customs (Appeals) set aside the original authority's decision denying the exemption due to the beta-carotene content being below the prescribed limit, leading to a dispute regarding the entitlement of the importer to the privilege.

2. A crucial aspect highlighted is the difference between crude palm oil and refined palm oil, emphasizing the purification process that makes the latter suitable for human consumption. The exemption notification aims to promote the import of crude palm oil by offering lower customs duties, encouraging value addition domestically. The case involves the import of crude palm oil by a company in specified quantities against which samples were tested to determine beta-carotene content, leading to a demand for duty based on the test results.

3. The issue of the validity of test results and expert opinions regarding the reduction of carotene content over time is significant. The Tribunal considered various test results conducted at different times and locations, indicating a decline in beta-carotene content, which aligns with expert views that carotene levels diminish with time. The dispute also involves the rejection of the last test result by the Revenue, despite ongoing litigation and expert opinions supporting the impact of time on carotene content.

4. The interpretation of the exemption notification criteria for crude palm oil is crucial in determining the eligibility for concessional duty rates. The Tribunal analyzed the test results from different laboratories and locations over a period of four months, noting a consistent decline in carotene content. The decision emphasizes the importance of meeting the prescribed parameters at the time of import to qualify for the exemption, with no conclusive evidence presented to dispute the findings.

5. Ultimately, the appeal by the Revenue was dismissed as the Tribunal found the imported goods to conform with the criteria for crude palm oil under the exemption notification. The decision highlights the significance of test results, expert opinions, and adherence to specified parameters for determining eligibility for duty exemptions. Additionally, the disposal of the cross-objection signifies the resolution of all related issues in the case, bringing clarity to the matter.