2009 (10) TMI 487 - HC - Customs

Import of crude palm oil - Short landing of approximately 1.445% of oil. Half the loss is due to short delivery at port, 25% of loss is due to evaporation and spillage and 25% of loss due to accident of two tankers. Oil was never available to petitioner for manufacture of Vanaspati through it had paid the price for the same. Held that - no case that oil used for some other purpose. Assesse not to be denied the benefit of exemption notification.

Summary

Issues:
- Benefit of concessional rate of duty on imported goods not used or short received for intended purpose.

Analysis:
1. The case involved a question of law regarding the admissibility of concessional rate of duty on imported goods that were not used or short received for the intended purpose. The petitioner, engaged in Vanaspati manufacturing, imported crude palm oil under Notification No. 16 of 2000, which provided a concessional rate for this purpose. However, out of the imported 7371.743 MT, only 7318.446 MT was received at the port, with 52.461 MT lost during import and manufacturing due to evaporation, spillage, and an accident involving tankers. The Assessing Officer disallowed the concessional rate for the 105.713 MT shortfall. The Commissioner of Appeals ruled in favor of the petitioner, stating that the goods were irretrievably lost beyond their control, and thus, the differential customs duty was not recoverable.

2. The High Court analyzed the facts and found that the loss of 52.461 MT was due to evaporation, spillage, and the tanker accident, while the remaining 53.927 MT was a case of short landing, never received by the petitioner despite payment. The total loss of 105.713 MT accounted for a negligible 1.445% of the total import. The court noted that almost half of the loss was due to short delivery at the port, with 25% each attributed to evaporation/spillage and the tanker accident. The oil in question was never available for Vanaspati production, even though paid for by the petitioner.

3. The court held that the petitioner should not be denied the concessional rate of duty on the lost oil as it was not used for any other purpose and never reached the petitioner. The judgment referenced the BPL Display Devices Ltd. case, supporting the petitioner's position. Consequently, the court dismissed the appeal, finding no merit in denying the benefit of the concessional rate of duty on the lost oil.