2009 (12) TMI 398 - AT - Customs

Classification- whether the imported cargo is of non-edible grade of palmolein attracting tariff rate is eligible for exemption under Customs Exemption Notification No. 21/02 dated 1st March 2002 as amended by Notification No. 120/2003 dated 1st August 2003. Whether the imported goods were complying with the conditions as laid down in the notification. Held that- find that the acid value in all these consignments is confirming to the specification of acid value as given in Notification No. 120/2003 i.e. more than 2% Second condition given in the said notification regarding carotenoid content (as beta carotene) is not being satisfied as the chemical examiner has reported total carotenoid value ranging from 408 to 449 mg per kg. This particular value does not satisfy the conditions laid down in the said notification. In view of these facts arid circumstances we hold that the impugned order is correct and does not suffer from any infirmity and appeals are rejected.

Issues Involved:
Classification of imported cargo as non-edible grade palmolein, eligibility for exemption under Customs Exemption Notification, compliance with quality standards for edible grade palmolein, conflicting test results regarding acid value and carotenoid content, consideration of chemical examiner's report, relevance of PHO certification, interpretation of Notification No. 21/02, impact of carotenoid value deterioration on eligibility for exemption.

Analysis:
1. Classification of Imported Cargo: The case involved the classification of imported cargo as non-edible grade palmolein, which was initially declared as palm oil of edible grade but later reclassified due to high FFA content. The dispute centered around whether the imported cargo should be classified as non-edible grade palmolein, impacting its tariff rate and eligibility for exemption under Customs Exemption Notification.

2. Compliance with Quality Standards: The appellant argued that the imported cargo met the quality standards for edible grade palmolein as per Appendix-B specifications, emphasizing the importance of specific parameters like refractive indexes, iodine value, cloud point, and flash point. The appellant contended that the cargo should be considered fit for human consumption after refining, citing CBEC Circulars to support their claim.

3. Conflicting Test Results: The case presented conflicting test results regarding the acid value and carotenoid content of the imported cargo. The appellant highlighted different findings from various tests, including those by the Public Health Officer, Chemical Laboratory, and load port analysis, creating ambiguity regarding which values should be accepted for determining eligibility for the exemption under Notification No. 21/02.

4. Consideration of Chemical Examiner's Report: The appellant argued against the necessity of considering the chemical examiner's report, asserting that the certification by the Port Health Officer confirming compliance with PFA standards should suffice. However, the opposing view emphasized the importance of the chemical examiner's analysis, particularly regarding the carotenoid value specified in the notification.

5. Interpretation of Notification No. 21/02: The interpretation of Notification No. 21/02, as amended by Notification No. 120/2003, was crucial in determining the eligibility for exemption based on the specified conditions related to acid value and carotenoid content. The tribunal analyzed whether the imported cargo met these conditions at the time of importation, considering the conflicting test results and compliance with the notification's requirements.

6. Impact of Carotenoid Value Deterioration: The deterioration of carotenoid value over time was a point of contention, with the appellant arguing that the value decreases as time elapses. However, the tribunal found that the carotenoid value reported did not meet the specified range in the notification, emphasizing the importance of compliance with the standards at the time of importation.

In conclusion, the tribunal upheld the impugned order, emphasizing the importance of complying with the quality standards specified in Notification No. 21/02 for eligibility for exemption. The conflicting test results, interpretation of the notification, and consideration of chemical analysis played pivotal roles in the decision, ultimately leading to the rejection of the appeals.

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