2005 (8) TMI 228 - AT - Customs

Imports crude palm oil - Exemption of Notification No. 21/02 Cus. - Samples drawn for test - Test report shows carotenoid value was less than 500 Mg - concessional rate of duty - recovery of differential duty - HELD THAT - A perusal of RRL Trivendrum s letter to Edible Oil Commissioner shows that the carotene content in crude palm oil varies with time. Moreover the learned advocate drew our attention to the decision of the Tribunal in the case of Commissioner of Customs Tuticorin v. KTP Oil Mills 2004 (12) TMI 181 - CESTAT CHENNAI wherein the Tribunal has held that Chemical analysis of sample three months after it is drawn could not serve any purpose. In fact the above view is only that of Chief Chemists CRCL. In that case also the item imported was crude palm kernal oil. The above case refers to a clarification by CRCL New Delhi to the effect that any analysis after a period of three months from the date of drawal of sample would not serve any purpose. There is also nothing on record to show that the method adopted by Cochin Custom lab was defective. The fact is that at the time of import the goods satisfied the conditions of the notification. Even when we perused the results of CRCL New Delhi we find that in respect of 2 samples the carotene content is as per the requirements the values are 524.3 and 525.8. In respect of 4 samples the difference is only marginal values are 494.6 485.5 483.1 475.7 only in respect of remaining three samples the difference is appreciable. The values are 391.9 390.5 and 424.1. We are satisfied that over a period of time the beta carotene content in crude palm oil decreases. Thus we hold that the crude palm oil imported satisfies the conditions of the relevant notification. Hence the impugned order cannot be sustained. We allow the appeal with consequential relief.

Summary

Issues:
1. Interpretation of Notification No. 21/02 Cus. dated 1-3-2002 regarding concessional rate of duty for crude palm oil based on specific specifications.
2. Discrepancy in test results of crude palm oil samples from different laboratories leading to differential duty recovery.
3. Reliability of test results over time and under varying conditions affecting carotenoid content in crude palm oil.

Analysis:
1. The case involved two appellants who imported crude palm oil, with a specific quantity belonging to each. The concessional rate of duty for crude palm oil is subject to meeting certain specifications as per Notification No. 21/02 Cus. dated 1-3-2002. Samples were tested in Customs Laboratory, Cochin, and CFTRI Mysore, with contradictory results leading to differential duty recovery by the Revenue. The appellants contested the lower authorities' decisions before the Commissioner of Customs (Appeals) and subsequently before the Tribunal seeking relief.

2. The appellants argued that the samples sent to CRCL, New Delhi for retesting were not representative of the entire consignment, as only one sample was drawn from all 9 tanks. They also raised concerns about the time lapse between sample collection and testing affecting carotenoid content. Expert opinions highlighted the variation in beta carotene levels over time and under different conditions, emphasizing the need to consider scientific findings in determining the eligibility for concessional duty.

3. The Tribunal analyzed the technical reports and expert opinions regarding the beta carotene content in crude palm oil. Scientific evidence indicated a decrease in carotenoid content with time and temperature variations. The Tribunal considered the impact of time on carotenoid content, referencing findings from reputable research institutions and the Chief Director cum Edible Oil Commissioner's recommendation to delete the carotenoid content stipulation for imported crude palm oil. The Tribunal concluded that the crude palm oil imported satisfied the notification's conditions, leading to the allowance of the appeal and consequential relief.

This detailed analysis highlights the legal intricacies surrounding the interpretation of notification specifications, reliability of test results, and the impact of time and conditions on carotenoid content in crude palm oil, culminating in the Tribunal's decision to grant relief to the appellants based on scientific evidence and expert opinions.