2020 (3) TMI 764 - AT - Customs

Import of Crude Palm Oil - High seas sale - carotenoids content of the imported palm oil - benefit of N/N. 21/2002-Cus., dated 1-3-2002 as amended - allegation that the CO contents was less than 500 mg/kg, therefore, the appellants are not eligible to the benefit of exemption Notification No. 21/2002-Cus., dated 1-3-2002 - HELD THAT - There is no material to support the contention of the appellant, inasmuch as the test report of the Dy. Chief Chemist has not been challenged by the appellant by filing necessary appeal before the higher forum for retesting nor the remnant sample with the Dy. Chief Chemist, after conducting the test as mentioned in the respective test report, have been subjected to further test by any other agency to discard the Dy. Chief Chemist s test report on the carotenoid contents of the imported crude palm oil. In the present case, the appellant could not be able to justify that carotenoid contents is more than 500 mg/kg contrary to the Dy. Chief Chemist s Report, and consequently eligible to the benefit of said notification - the observations recorded by the Learned Commissioner (Appeals) in upholding the orders of the Adjudicating Authority does not warrant interference. Appeal dismissed - decided against appellant.

Summary

Issues:
Determining eligibility for exemption under Notification No. 21/2002-Cus. based on carotenoid content in imported crude palm oil.

Analysis:
The case involved appeals against an order passed by the Commissioner of Customs (Appeals), Mumbai, regarding the classification of imported Crude Palm Oil under Customs Tariff Heading 1511 10 00 and the eligibility for exemption under Notification No. 21/2002-Cus. The appellants purchased the oil on high sea sale basis and claimed exemption. The Dy. Chief Chemist's report indicated carotenoid content below 500 mg/kg, leading to a demand for recovery of differential duty. The appellants contested this, arguing delay in testing and relying on a private lab report showing a higher carotenoid value due to delay.

The appellant's advocate challenged the Dy. Chief Chemist's report, emphasizing the delay between sampling and testing, and the significance of the lab date. Reference was made to a judgment in Ruchi Soya Industries Ltd. case, highlighting the decrease in Beta Carotene content over time. The Revenue's representative supported the test reports, emphasizing the carotenoid content below 500 mg/kg in both cases, rendering the appellants ineligible for exemption. The Revenue argued that the private lab report was unreliable due to the absence of Departmental supervision during sample collection.

The Tribunal analyzed the issue of eligibility for exemption under Notification No. 21/2002-Cus. based on carotenoid content. The conditions of the notification were examined, and the Dy. Chief Chemist's unchallenged test reports showing carotenoid content below 500 mg/kg were considered. The appellant's reliance on a private lab report was dismissed, as it lacked Departmental oversight during sample collection. The Tribunal upheld the principle that the burden of proof lies on the assessee to establish eligibility for exemption, as per legal precedent. Consequently, the Tribunal affirmed the Commissioner's decision, dismissing the appeals and upholding the demand for differential duty.

In conclusion, the Tribunal determined that the appellants failed to substantiate their claim for exemption under Notification No. 21/2002-Cus. based on carotenoid content in the imported crude palm oil. The unchallenged test reports by the Dy. Chief Chemist prevailed over the private lab report, and the burden of proof rested on the assessee to establish eligibility for exemption, as per legal principles. The Tribunal upheld the Commissioner's decision, emphasizing the importance of adhering to legal requirements for exemption benefits.