2017 (9) TMI 1274 - AT - Customs

Imported goods not used for intended purpose - it appeared to the department that against 6007.721 MTs of crude palm oil imported, only 5990.466 MTs was utilized for the intended purpose, hence 17.255 MTs of crude palm oil was not so utilized - Held that - the quantity of 17.255 MTs not utilized in the manufacture of final products, in any case, constitutes only 0.57% of the total quantity imported - similar issue decided in the case of M/s Jhunjhunwala Vanaspati Ltd. Jaunpur (U.P.) Versus The Commissioner of Central Excise, Allahabad 2015 (10) TMI 1532 - ALLAHABAD HIGH COURT , where it was held that the object of grant of exemption was only to debar those importer/manufacturers from the benefit of the Notifications who had diverted the products imported for other purposes and had no intention to use the same for manufacture of the specified items at any stage - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Differential duty demand on unutilized quantity of imported Crude Palm Oil.
2. Benefit of notification on loss during transit.
3. Applicability of previous Tribunal decisions and legal precedents.

Analysis:
1. The appellant imported Crude Palm Oil at Nil rate of duty for manufacturing final products but was found to have not utilized 17.255 MTs out of the total imported quantity. Proceedings were initiated to demand differential duty, interest, and penalty. The original authority and Commissioner (Appeals) upheld the demand. The appellant appealed to the CESTAT Chennai.

2. During the hearing, the appellant's advocate argued that the difference in quantity was due to loss during transit, citing a previous CESTAT Chennai decision that held differential duty is not recoverable if goods were lost beyond the appellant's control upon clearance. The advocate relied on legal precedents to support this argument.

3. The CESTAT Member noted that the issue was previously addressed in the Tribunal's decisions in the appellant's case and referred to legal precedents, including a Supreme Court case and other higher appellate court decisions. The Member observed that the unutilized quantity constituted only 0.57% of the total imported quantity. Considering the legal precedents and the minimal percentage of unutilized quantity, the appeal was deemed to have merit, and the appellant succeeded in the appeal with consequential relief as per the law.

This detailed analysis covers the differential duty demand issue, the benefit of notification on loss during transit, and the applicability of previous Tribunal decisions and legal precedents in the judgment delivered by the CESTAT Chennai.