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2019 (1) TMI 1048 - AT - CustomsFinalization of provisional assessment - import of coconut oil against advance licence under the Duty Exemption Entitlement Certificate - section 18 of Customs Act, 1962 - whether, in accordance to the specifications in the advance licence, the import was to be allowed? Held that - No justification is been offered in the grounds of appeal for placing reliance on the lauric value other than the determination in the test report. The Manual of Methods of Analysis of Oils Fats issued by the Director General of Health Services, Government of India has options for utilisation of factors for conversion of the three acids and emphasizes that the acid value would remain unchanged. Hence, it would appear that conformity with the threshold of the range prescribed in the license, with any one of the three in relation to the acid value , and which is not disputed, should suffice - In the test report, there is no dispute that it is coconut oil that has been imported. It is also not in dispute that the imported product is in raw form. The license does not bar the import of raw coconut oil ; neither the license nor the grounds of appeal adduce any importance to the range of 3% to 6% mandated in the license. It would, therefore, appear that any derived conformity with the threshold of the range should suffice. The computation approved by the first appellate authority is not unreasonable. Appeal dismissed - decided against Revenue.
Issues:
Appeal against approval of finalisation of provisional assessment based on measurement and rounding off principle. Analysis: 1. The appeal by Revenue challenged the approval of finalisation of provisional assessment by the Commissioner of Customs (Appeals) regarding the import of coconut oil under the Duty Exemption Entitlement Certificate scheme. The issue revolved around the measurement and rounding off principle adopted by the lower authorities. The grounds of appeal did not address the disposal of the order by the first appellate authority. 2. The assessment was provisional under the Customs Act, 1962, and the import was found to contravene the policy restricting entitlement to a specific agency. The High Court affirmed the decision to modify the fine and penalty, leading to the finalisation of the assessment. 3. The original authority confirmed the classification of coconut oil under a specific heading and addressed the breach of the restriction on the quantum of free fatty acid in the advance license. The conversion of free fatty acid content was a key point of contention, with the original authority using a prescribed factor to determine compliance with the advance license specifications. 4. The first appellate authority upheld the findings of the original authority regarding the conversion of free fatty acid content. The authority referred to established methods for determining free fatty acid content and dismissed Revenue's reliance on previous tribunal decisions concerning rounding off procedures. 5. The application of different factors for conversion and the determination of free fatty acid content were thoroughly examined by the lower authorities. The first appellate authority justified its decision based on the definition of acid value and rejected Revenue's arguments regarding rounding off procedures. 6. The authorized representative contended that the rejection of a previous Supreme Court-approved decision was erroneous, highlighting a disagreement on the interpretation of legal precedents. 7. The decision to permit the import was based on the compliance of free fatty acid content with the specified range after conversion. The question of whether the import adhered to the advance license specifications was a central point of contention. 8. The importance of rounding off procedures and the conversion from lauric to oleic values were debated, with the lower authorities emphasizing compliance with the prescribed range and the use of authoritative rules. 9. The test report confirmed the import of coconut oil in raw form, with no dispute over the nature of the imported product. The license requirements and the determination of compliance with the specified range were crucial factors in the decision-making process. 10. Ultimately, the Tribunal found no reason to interfere with the impugned order, leading to the dismissal of Revenue's appeal and the disposal of the case. (Pronounced in Court on 18/01/2019)
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