2018 (4) TMI 1538 - AT - Customs

Import of crude palm oil - Benefit of exemption under N/N. 21/2002-Cus dated 12th March 2002 - denial on the ground that beta-carotene content in the crude palm oil imported by M/s Radha Vansapati Ltd being below the prescribed to disentitle them from the privilege - Held that - It is not in dispute that the palm oil under import was in crude form and requires refining, bleaching and deodorizing before release for human consumption. The primary purpose of prescribing a broad range of beta carotene content in the exemption notification is to ensure that it is applicable only to palm oil that is intended to be subjected to value addition in India. The various tests of the samples were effected over a period of four months and there is a consistent decline in the distinguishing content. Furthermore, the first test at Kandla passes muster. No other evidence to establish that the consignment did not, at any stage, comply with threshold requirement is placed on record. The conformity of impugned goods with crude palm oil as per the prescribed parameters at the time of import is not in question - appeal dismissed - decided against Revenue.

Summary

Issues:
- Denial of benefit of exemption on crude palm oil due to beta-carotene content
- Discrepancies in test results and validity of expert opinions
- Interpretation of exemption notification and value addition requirements

Analysis:
1. The judgment revolves around the denial of the benefit of exemption on crude palm oil based on the beta-carotene content. The Commissioner of Customs (Appeals) set aside the original authority's decision denying the exemption, citing a depletion of carotene content over time. The primary difference between crude and refined palm oil lies in the purification process, with the exemption notification encouraging the import of crude palm oil for domestic refining. The appellant, M/s Radha Vansapati Ltd, imported crude palm oil and claimed the benefit of the notification despite discrepancies in test results indicating varying beta-carotene levels.

2. The case delves into the discrepancies in test results and the interpretation of the exemption notification's requirements. The Revenue challenged the discarding of the last test result, arguing that expert opinions on depleting carotene content were considered by the Tribunal. The judgment highlighted the importance of time and temperature variations on carotene content, with expert opinions suggesting a decrease in beta-carotene levels over time. The test results of the impugned samples consistently showed a decline in carotene content over a four-month period, with no evidence presented to contradict compliance with the threshold requirement at the time of import.

3. The interpretation of the exemption notification and the necessity of value addition in India were crucial aspects of the judgment. The notification aimed to incentivize the import of crude palm oil for refining and value addition domestically. Despite arguments regarding the eligibility for exemption based on test results and expert opinions, the court emphasized the need for the impugned goods to conform to the prescribed parameters of crude palm oil at the time of import. Ultimately, the appeal of the Revenue was dismissed, and the cross-objection was also disposed of, indicating the court's satisfaction with the compliance of the impugned goods with the exemption requirements.