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TMI Blog2009 (2) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... FAD and not crude palm stearin as declared by the importer. After due adjudication process, the impugned order finalized the Bills of Entry by classifying the impugned goods as RBD Palm Stearin falling under Sub-heading No. 3823.11.12 of the Customs Tariff Act, 1975 and finalized all the Bills of Entry and demanded the differential duty along with applicable interest. Aggrieved by these orders, the appellants preferred an appeal before the Commissioner (Appeals). 4. On an appeal field against the order of the Adjudicating Authority, the learned Commissioner (Appeals) also came to the same conclusion and the appeals filed by the appellants have been rejected. Aggrieved by these orders, the appellants are before us. 5. The learned counsel would submit that the issue involved in this cases is classification of the goods imported by them. He would submit that the view of the department was gone into details by this Tribunal by Final Order No. 1271-1279/2007 dated 12-11-2007, set aside the order which held the goods to be Crude Palm Stearin. He would submit that order is reported in 2008 (225) E.L.T. 540 (Tri.-Del.). 5.1 It is his submission that the learned Commissioner (Appeals) se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Hindustan Ferodo - 1997 (89) E.L.T. 16; Vicco Labs - 2005 (179) E.L.T. 17; Sharrna Chemical Works - 2003 (154) E.L.T. 328; Quinn India - 2006 (198) E.L.T. 326]. It is the submission that in the present case, the department did not even make any attempt to discharge the said onus; it was necessary for the department to have the product chemically analysed; and record a finding that there was no triglycerides found in the product and therefore, the product had no ester value and accordingly, in terms of the CBEC directions, the product merited classification under Chapter 38. It is the submission that since this was done by the department, the impugned order deserves to be quashed and set aside. 5.4 It was further submitted that the learned Commissioner (Appeals) failed to appreciate that oils were combination of glycerides and fatty adds. It is the submission that inherently, oil has about maximum 5% fatty acid and if the legal requirement mandates (as in case of imports to be made into India) that PFAD should be added then Free Fatty Acid of the oil goes above 20% (between 20.1% to 29.5%); this addition is required by the Indian Government to ensure that the oils which are meant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c fatty acid; as it was incumbent on the learned Commissioner (Appeals) to have gone into the technical literature both in respect of oils and fats and also in respect of monocarboxylic fatty acid to appreciate the view of CBEC and CRCL and then classify the product; failure to do so has vitiated the impugned order which deserves to be quashed and set aside. 5.7 He submitted that the learned Commissioner (Appeals), though no onus was cast on the appellant, the appellant had imported the goods together with Load Port Analysis which clearly showed FFA, saponification value and/or ester value of the product; once saponification value or ester value is known and free fatty acid is determined, it is possible (by applying the accepted formulae) to ascertain the acid value and saponification value or ester value of the product. The learned Commissioner (Appeals) did not consider this aspect at all. 5.8 It is also his submission that the CBEC circular dated 3-12-2002 is directly applicable in the case and he would draw our attention to the Chemical Examiner's report and submit that the samples clearly indicate that only 23.2% of the contents are free fatty acids while balance are triglyc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the goods viz., crude palm stearin is required to be classified under Chapter Sub-Heading No. 1511 90 90 as claimed by the importer or under 3823 11 12 of the Customs Tariff as determined by the original authority. The impact of change of classification is that the Additional Customs Duty equivalent to Central Excise duty is chargeable @ 16% if the goods are classified under Sub-Heading No. 382311 instead of the proposed classification in the Bill of Entry. The goods were imported vide Bill of Entry No. 491 dated 26-8-2003. Therefore the new 8 digit classification is referred to arrive at the classification of the product. The importer relied on the clarification issued by Circular No. 81/2002-Cus., dt. 3-12-2002 in the context of distinctions between Palm stearin and Strearic acid. In the said Circular, it was clarified that while palm stearin falling under 1511 is basically triglyceride (ester) of fatty acids. Stearin falling under Heading No. 3823 is basically free fattyacids It is also clarified that while Palm Stearin is obtained by a process of fractionalization, the olein and stearin of industrial monocarboxylic fatty acids falling under Ch. Heading No. 3823 are mixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicates the ester value and saponification value of the goods imported at the load port as per the documents submitted at the time of clearance. We may reproduce the same. JOCIL LIMITED Comparative Chart showing Load Port Analysis and Chemist Analysis Bill of Entry No. & Date 49 dtd. 21-1-2004 583 dtd. 22-11-2004 647 dtd. 28-12-2004 491 dtd. 26-8-2003 Analysis at Load Port Chemist Load Port Chemist Load Port Chemist Load Port Chemist Date of Analysis 05-Jan-04 03-Feb-04 16-Nov-04 22-Nov-04 25-Nov-04 28-Dec-04 19-Aug-03 10-Oct-03 FFA (%) (Free Fatty Acid) 21.07 23.20 21.70 23.60 21.73 22.75 23.70 23.60 (Moisture, Impurities & Volatiles) 0.11 >0.10 0.11 >0.10 0.05 >0.10 0.22 Not Given IV (Iodine Value) 40.00 Not Given 39.60 Not Given 38.90 Not Given 40.30 Not Given USM (%) Un Saponifiable Mater) 0.47 Not Given 0.67 Not Given 0.45 Not Given 0.70 Not Given SAP Value (Sapon-ification Value) - Not Given 201.70 Not Given Not Given Not Given 199.90 Not Given Ester Value (Mg KOH/gm.) 157.50 Not Given Not Given Not Given 152.69 Not Given Not Given Not Given It can be noticed from the above chart that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed hot in isothermal tanks. 4. The matter was referred to CRCL for opinion CRCL has advised that heading 15.11 covers palm oil and its fractions. Plain oil is composed mainly of triglycerides of fatty acids such as palmitic, strearic, oleic, lauric, myristic, etc. Palm oil can be separated into low and high melting point fractions, viz., palm olein and palm stearin, by fractionation. Composition wise both fractions are mainly triglycerides of fatty acids. Therefore, stearin (palm stearin) falling under 15.11 is glyceride (ester) of fatty acids such as palmitic, stearic, oleic, lauric, myristic etc. As regards heading 38.23 which covers industrial monocarboxylic fatty acids, the olein and stearin described thereunder are mixed fatty acids mainly palmitic, stearic, oleic acid etc., obtained by splitting of natural fats and oils by means of hydrolysis or saponification, and then by crystallization and separation. Industrial fatty acids are used in plastics, fibres, soaps, surfactants etc. These are composed of mixtures of fatty acids and are by no means pure or even fairly pure. Hence, they are classifiable under heading 38.23. The fatty acids having specified minimum purity levels a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce placed by the Chemical Examiner on some literature is misplaced. In any case the appellants wanted to cross-examine the Chemical Examiner but the department has not allowed the same. Moreover, even the request for retest of samples has not been complied with. The appellants have also produced the analysis certificate at the load port and we find that those certificates conform to the specification of Crude Palm Stearin. Moreover the import as per Hindustan Lever, is from an internationally renowned company." (emphasis supplied) It is to be noted that in the appellant's own case this bench has accepted the analytical report of the load port, we respectfully follow the same in this case also. 8.4 In view of the above reasonings, we find that the impugned orders vide which the classification of the product ordered under Chapter Sub-Heading No. 3823.11.12, is liable to be set aside and we do so. We direct the lower authorities to classify the product under Chapter Sub Heading 1511.90.90 of the Customs Tariff Act, 1975 and finalize the bills of entries which were provisionally assessed. Needless to say that the consequential relief, if any, in accordance with law, will be availab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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