2004 (12) TMI 181 - AT - Customs

Imports Crude Palm Kernel Oil - Determination of duty on the basis of Free Fatty Acid (FFA) content - Tosting - Validity of re-sample and re-test report - removal of the goods to Warehouse - HELD THAT - We find that, any testing of the fresh samples drawn on 24-3-04 would not yield any reliable results inasmuch as it has already been clarified by the Central Revenues Control Laboratory, that any analysis after a period of 3 months from the date of draw of sample would not serve any purpose. This expert opinion cannot be ignored. The fresh sampling was done on 24-3-2004 and, already, a period of 9 months has elapsed since then. There is no point in getting these samples tested. The situation is worse insofar as the remnant sample is concerned. In the circumstances, the direction issued by the Commissioner (Appeals) for re-test is not capable of being carried into effect. What remains to be done in this case is to permit finalisation of assessment on the basis of the report of the Central Food Laboratory, Mysore. The competence of this authority has not been questioned even by the Revenue. The report of this laboratory is that the Acid Value of the Palm Kernel Oil imported by the respondent is 3.0. This report also says that the sample conforms to the standards laid down for Palm Kernel Oil under the Prevention of Food Adulteration Act and Rules thereunder and, further, that the oil shall be refined before it is supplied for home consumption. This report virtually certifies the goods to be Crude Palm Kernel Oil. In view of the FFA content reported by the Central Food Laboratory, the Crude Palm Kernel Oil shall be assessed to duty at the rate of 75%. In the result, the order of the Commissioner (Appeals) directing assessment of the goods to duty at 75% is affirmed but such assessment shall be treated as final. His direction for re-sampling and re-testing is set aside. The order will stand modified accordingly. The appeal is disposed of.

Summary

Issues Involved: Stay of operation of impugned order, assessment of Customs duty based on FFA content, validity of fresh sampling for chemical test, finalization of assessment based on overseas test report and Central Food Laboratory report.

Stay of Operation of Impugned Order: The Revenue sought a stay of the impugned order of the Commissioner (Appeals) but the Appellate Tribunal decided to proceed with the appeal itself, ultimately rejecting the application for stay.

Assessment of Customs Duty Based on FFA Content: The dispute arose from the assessment of Customs duty on imported Crude Palm Kernel Oil based on the Free Fatty Acid (FFA) content. The importer claimed a certain FFA content, while the Customs authorities proposed a different assessment based on their own test report. The Commissioner (Appeals) allowed provisional payment of duty at a lower rate pending further testing.

Validity of Fresh Sampling for Chemical Test: The Revenue challenged the Commissioner (Appeals) order, arguing that there was no provision for fresh sampling for chemical tests after the original sample was tested. The Tribunal considered expert opinions stating that testing fresh samples after a certain period would not yield reliable results, leading to the decision to finalize the assessment based on existing reports.

Finalization of Assessment Based on Overseas Test Report and Central Food Laboratory Report: The respondents' consultant argued that if re-testing or fresh sampling was not feasible, the assessment should be based on the overseas test report and the report from the Central Food Laboratory, Mysore. The Tribunal agreed, emphasizing the competence of the Central Food Laboratory and directing the assessment at a duty rate of 75% based on their report.

In conclusion, the Appellate Tribunal affirmed the Commissioner (Appeals) order directing assessment at 75% duty rate but deemed it final. The direction for re-sampling and re-testing was set aside, and the appeal was disposed of accordingly.