2018 (9) TMI 936 - AT - Customs

Concessional rate of duty - N/N. 12/2012 dated 17.3.2012 - Classification of imported goods - Shea Butter ultra refined - classified under Customs Tariff heading No. 1515 9091 of schedule I to Customs Tariff Act 1975 or otherwise - Only ground of the department for denying them the notification benefit is that since the imported consignment was meant for manufacturing of cosmetics. Held that - It can be seen that the imported consignment of the Shea Butter Ultra Refined is classifiable under Chapter sub heading 1515 90 91 of the Customs Tariff Act, 1975. From the perusal of the Bill of Entry, it is seen that the importer appellant has correctly declared the consignment while filing Bill of Entry for clearance of Shea Butter Ultra Refined. It has been contested that M/s. HallStar, who are supplier of the imported consignment has provided a certificate that the imported consignment is of Shea Butter Ultra Refined of edible grade. Thus, on the basis of this certificate that the subject consignment is of refined and edible shea butter, they have claimed benefit of notification No. 12/2012 under Sl.No. 58 - since the notification does not have any condition of end use, therefore even if the consignment is being used in the cosmetic industry which is of refined edible grade, the benefit of notification giving concessional rate of Customs duty cannot be denied to the appellant. The importer appellant is entitled for benefit of concessional rate of Basic Customs Duty under Notification No. 12/2012 dated 17.3.2012 at S.No. 58, being consignment of Shea Butter which is of both refined and edible grade‟ - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification of imported consignment under Customs Tariff heading, Benefit of exemption notification No. 12/2012, Denial of concessional rate of Basic Customs Duty, Contention regarding edible grade of shea butter, Reassessment order classification, Grounds for denial based on cosmetic industry use, Compliance with notification conditions, FASSI certification requirement.

Analysis:
The appellants imported Shea Butter ultra refined classified under Customs Tariff heading No. 1515 9091. They claimed exemption under Notification No. 12/2012 for goods falling under Chapter sub-heading 1515. The department denied the concessional rate, citing the consignment's use in the cosmetic industry. The Commissioner (Appeals) upheld the denial, stating that the goods were not edible. The appellant argued that Shea butter is primarily for edible purposes, supported by supplier certification and historical use in confectionery. The exemption notification requires refined and edible grade goods, met by the imported consignment. The reassessment classified the consignment under 1515 9091 for edible grade oils, supporting the appellant's claim.

The Tribunal found the imported consignment correctly declared under 1515 9091, meeting the edible and refined grade criteria. The supplier's certification and historical use supported the appellant's claim for exemption. The department did not provide evidence to refute the edible grade classification. The absence of end-use conditions in the notification meant that even if the consignment was used in cosmetics, the concessional rate could not be denied. The FASSI certification denial did not negate the consignment's refined and edible grade status. Consequently, the Tribunal allowed the appeal, setting aside the previous order.

This detailed analysis highlights the classification under Customs Tariff, the conditions for exemption notification, the dispute over edible grade status, and the Tribunal's decision based on compliance with notification requirements and absence of end-use conditions.