2018 (7) TMI 279 - AT - Customs

Concessional rate of duty - N/N. 21/2002-Cus - import of 27 consignments of crude palm oil - the assessee s contention is that the imported goods are classifiable under CTH 1511 10 00 as Crude Palmolein as per description of chapter headings of Customs Tariff and as per HSN Explanatory Notes, Whereas the Revenue s contention that classification of crude palmolein should be as per 2.8 of CODEX Standard prescribed for vegetable oil and as per notification at Sl. No. 34 of 21/2002 and Board s Circular No. 85/2003, dated 24-9-2003. Held that - It is settled law that for classification of any imported goods, the principle and guidelines laid out in General Interpretative Rules for classification should be followed and the description given in chapter sub-heading and chapter notes, section note should be the criteria. The description given in Sl. No. 34 of Notification 21/2002 specifying values is only for giving exemption to specified goods. Classification given in Circular No. 85/2003, dated 24-9- 2003 cannot be taken as criteria for classifying the goods under the Customs Tariff. There is no dispute on the fact that the goods imported are Crude Palmolein (Edible Grade). It is also not disputed in the impugned order that the appellant is a manufacturer of refined oil and the imported crude palmolein is further refined after clearance and sold for human consumption. When the imported goods conform to the specific description under Ch 1511 10 00 as crude Oil and there is no specific chapter note or HSN Explanation specifying criteria of acid value or carotenoid content for classifying the crude oil, therefore the goods imported are appropriately classifiable under Chapter 1511 10 00 of CTH and any specific description given under Sl. No. 34 of Notification 21/2002 for the purpose of exemption cannot be taken as criteria for classification of the product under Chapter Heading 1511 90 90 as Others . Tribunal s Co-ordinate Bench in the case of Gujarat Ambuja Exports v. CC, Kandla 2009 (6) TMI 662 - CESTAT, AHMEDABAD on an identical issue of classification of import of crude palmolein, has dealt the issue in depth and discussed the Board s circular and referred to HSN Explanatory Notes and held that imported goods are classifiable under CTH 1511 10 00 and not under CTH 1511 90 90. The reliance placed on the test report which emanated long after the date of import, does not sustain in the absence of any other evidence that imported goods were refined palm oil - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Classification of imported crude palm oil.
2. Eligibility for concessional duty under Notification No. 21/2002-Cus.
3. Validity of test results for beta carotene content.
4. Responsibility for testing and assessment.

Issue-wise Detailed Analysis:

1. Classification of Imported Crude Palm Oil:
The appellant classified the imported crude palm oil under Tariff Item No. 15111000, claiming it as "Crude Palm Oil". However, the Adjudicating Authority reclassified it under Chapter 15119090 based on the acid value and beta carotene content from test reports, demanding differential duty. The Tribunal referenced the case of Gujarat Ambuja Exports v. CC, Kandla, emphasizing that classification should follow the chapter note, section note, and HSN Explanatory Notes. The Tribunal concluded that the imported goods, being crude palmolein (edible grade) and used for refining, should be classified under Chapter 15111000.

2. Eligibility for Concessional Duty under Notification No. 21/2002-Cus:
The appellant claimed concessional duty based on the load port analysis certificates, which indicated compliance with the required acid value and beta carotene content. The Revenue disputed this, arguing that the appellant failed to provide evidence of compliance. The Tribunal highlighted that the description in Sl. No. 34 of Notification 21/2002 for exemption purposes cannot dictate classification under Chapter Heading 15119090. The Tribunal found that the imported crude palm oil met the conditions for concessional duty as per the relevant notification.

3. Validity of Test Results for Beta Carotene Content:
The appellant argued that beta carotene levels deteriorate over time and temperature variations, rendering delayed test results invalid. The Tribunal referenced the Ruchi Soya Industries Ltd. case, which established that beta carotene content decreases over time. The Tribunal noted that the test results provided by the department were delayed and not representative of the entire consignment, thus invalidating the results for determining duty liability.

4. Responsibility for Testing and Assessment:
The Tribunal held that it was the responsibility of the assessing officer to promptly draw and test samples to verify the correctness of the declaration. The failure to do so cannot shift the burden to the appellant. The Tribunal found that the reliance on delayed test reports was unsustainable in the absence of evidence showing the imported goods were refined palm oil.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal. The imported crude palm oil was classified under Chapter 15111000, and the appellant was entitled to the concessional duty under Notification No. 21/2002-Cus. The delayed test results were deemed invalid, and the responsibility for timely testing lay with the assessing officer.