9911796707
TMI Blog1994 (9) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... T.) Soyabean Oil Industrial Grade were manufactured in Malaysia by M/s. Pasir Gudang Edible Oils, SDN BHD, Malaysia. M/s. U.K. Paints Industries had also attached a declaration stating that invoice No. OL 1909 dated 30th June, 1992 of M/s. Kuok Oils and Grains Pvt. Ltd., Singapore, and also the other documents relating to the goods covered by the said invoice presented along with the bill of entry were true and correct in every respect. In their further declaration under Rule 10 of the Customs Valuation Rules, 1988, M/s. U.K. Paint Industries declared the description of the goods as Soyabean Oil Industrial Grade and the clearance of the goods was sought duty free under DEEC against Advance Licence No. P/W/1515846 dated 6th March, 1992 and P/W/3269123 dated 4th May, 1989 under DEEC Book No. 013963 dated 6th March, 1992. In respect of their claim for duty free clearance, they had also given a DEEC declaration stating that the goods were imported for the purpose of manufacturing goods for executing export orders and that they undertook to pay on demand any amount equal to the duty leviable in respect of the goods in case the conditions specified in the Notification No. 159/90 were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyabean oil. The test report also confirmed that it was other than Raw Grade-2 which was intended for industrial use. 5.During the course of investigation, the CIU had obtained copies of the sales confirmation No. APL/92/C-550 dated 13th May, 1992 of M/s. Abhijat Impex Pvt. Ltd., Nariman Bhawan, 38-A, Nariman Point, Bombay-21. The said confirmation relating to the subject import consignment, inter alia, had given the specification of the Soyabean Oil as under :- FFA 0.1% max. - MNI 0.1% max. - Peroxide 2 MEQ Peroxide/Kg. max. - Colour 3 Red max. 30 yellow - (5.25 inch levibond cell) IV (WIJS) 125 Min. - 6. The Indian Standard Specification for Soyabean Oil IS 4276-1977 (reaffirmed in 1990), inter alia dealt with various grades of Soyabean Oil. As per the same, the materials obtained by the solvent extraction were of five grades i.e. (1) Refined Grade (2) Semi-refined grade (3) Degummed grade (4) Raw Grade-1 and (5) Raw Grade-2. According to the said Indian Standard Specification, refined grade of the oil was suitable for direct edible consumption while Raw Grade-1, Degummed and semi-refined grade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1992, however, CIU had drawn fresh samples and sent for test. (iii) Out of the two DEEC books and advance licence against which the clearance was claimed, one DEEC book covers Soyabean oil. (iv) They have not denied nor tried to hide the facts that they have imported RBD Soyabean oil. The fact which emerges from the test reports is that the goods imported are refined, bleached and deodorised Soyabean oil. For edible consumption the grade should be RBHWD. The refined Soyabean oil is used in the varnish industry. As per earlier test report, the Soyabean oil imported by them was considered as raw material for Synthetic white enamel. However, the CIU did not accept the expert advice of their own laboratory. (v) Apart from the test reports, there is elaborate literature on the subject which would prove that refined grade of Soyabean oil is the only grade suitable for making alkyl resins which are used for manufacturing Synthetic white enamel. The ASTMD 1462-70 prescribes the specifications for refined Soyabean oil suitable for manufacturing paint and varnish. They had in the past imported similar grades i.e. R.B.D. Soyabean Oil and the custom house allowed the clearance of the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refined Soyabean oil of industrial grade. (xii) As per ISI specifications 11069/1984 RBD Soyabean oil has to be winterised and hydrogenerated before it can be used for direct edible consumption. Even though the ISI specification 4276-1977 has not been repealed, R.B.D. Soyabean oil is an essential raw material for them and the custom house laboratory clarified that only RBHWD Grade oil is suitable for direct edible consumption and the alternative use of a raw material cannot be a ground for denying the benefit of exemption notification. (xiii) The custom house released identical imports in the past. Holding up the present import is not proper. There cannot be an allegation of contravention of Section 111(d) of the Customs Act, 1962. (xiv) It is not correct to say that the imported goods do not correspond to the declaration made by them and hence they have contravened the Section 111(m) of the Customs Act, 1962. As regards the allegation of contravention of Section 111(o) of the Customs Act, 1962, this will not stand as they have already exported the resultant product and their export obligation has already been met. Even if they have not observed the conditions in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The adjudicating authority further held that the matter would have been different if the latter specification for refined soyabean oil was meant for only industrial use other than vanaspati . The specification of 1984 is, therefore, not for rescinding the earlier ISI specification for edible grades, but only for an extra-special grade other than that meant for Vanaspati and other edible uses. Therefore, neither the ISI specification IS : 11069-1984 nor the technical opinion given by the Dy. Chief Chemist of Custom House Laboratory supports the point of the importers that RBD soyabean oil imported by them is of industrial non-edible grade and edible grade is only RBHWD. The adjudicating authority has further observed that as already pointed out, the goods have been imported by misdeclaring the description. Clearance of these goods had been sought against two advance licences and two corresponding DEEC Books. In one of the advance licences bearing No. 15846 dated 6th March, 1992, the item permitted to be imported was Soyabean Oil Industrial Non-edible grade. This licence was not valid for import of Soyabean Oil of RBD Grade. The importers had attempted to import goods of CIF va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported and sought to be cleared was not covered by the above-mentioned licence and DEEC, he held that the goods valued at Rs. 17,13,563/- CIF were not entitled for any duty free clearance under DEEC. 12. The adjudicating authority had further held that evidence on record indicated that the importers knowingly misdeclared the description of the goods so as to get them covered by the advance licence and the DEEC Books produced. The attempt to misdeclare the goods was to clear the same under the licence knowing well that the said licence was valid specifically for the import of Soyabean oil Industrial Non-edible grade and not for Soyabean Oil RBD Grade. It was also observed that even after the case was taken up for investigation, the importers tried to get a certificate from the suppliers to show that the material shipped was not odourless. The idea behind obtaining such a certificate was to mislead the Custom House. He, therefore, held that by their acts and omissions the importers had not only rendered the goods liable for confiscation but also rendered themselves liable for penalty. 13. The adjudicating authority had further held that in the show cause notice it was alleged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fine. The adjudicating authority also imposed a penalty of Rs. 4,00,000/- (Rupees four lakhs only) on the importers M/s. U.K. Paint Industries under Section 112(a)(i) of the Customs Act, 1962. 15. Being aggrieved from the aforesaid order, the appellant has come in appeal before the Tribunal. 16. Shri Ashok Mehta, the learned advocate has appeared on behalf of the appellant. He reiterated the facts. Shri Ashok Mehta, the learned advocate pleaded that the appellants had imported Soyabean Oil Industrial Grade and the declared value was Rs. 21,57,404/- and the import was against DEEC licences and there are two DEEC licences which appear on pages 18 to 26 of the paper book. He also pleaded that the appellants have claimed the benefit of Notification No. 159/90-Cus., dated 30th March, 1990 which appears on page 274 of the paper book which provides nil duty for export orders basic as well as countervailing duty. He argued that the goods imported are covered by Duty Exemption Entitlement Certificate and the export obligation has been duly met by the appellants by earlier imports. Shri Ashok Mehta, the learned advocate pleaded that the benefit of this notification has been denied to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndorsement on the back of the bill of entry clearly shows that these were duly approved by the customs people. He pleaded that this bill of entry No. 1650-49 is dated 4th August, 1992. He argued that once the clearance was ordered, it was not open to get retested and referred to the retest report which appears on page 40 of the paper book and in the retest report dated 30th March, 1993 it has been mentioned that the sample is in the form of light yellow having perceptible odour. It is bleached and conforms to specification of soyabean. It is other than Raw Grade 2 of the oil and, therefore, is intended for industrial use." Shri Mehta argued that no reliance should have been placed on the retest report. He has also filed written arguments and has pleaded for the allowing of the appeal. 17. Shri Sharad Bhansali, the learned SDR who has appeared on behalf of the respondent, relied on the order passed by the adjudicating authority. He referred to the first report which appears on page 37 of the paper book. He argued that Soyabean edible oil is canalised. He referred to the ISI Standard which appears on page 295 of the paper book. It relates to specification for refined, bleached, hy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned, bleached and deodorised (RBD) soyabean oil cannot be treated as industrial non-edible grade. The primary support for this view comes from the ISI specification for soyabean oil. IS : 4276-1977 which was reaffirmed in 1990. It classifies soyabean oil into 5 grades which include refined grade and raw grade. The ISI standard specifies that refined grade oil is suitable for direct edible consumption and raw grade 2 of the oil is for industrial uses other than vanaspati and refined oil manufacture. In the case of Nageshwara Pozzolana Works Pvt. Ltd. v. Collector of Central Excise [1992 (58) E.L.T. 321], the CEGAT, Special Bench, New Delhi held that ISI specification has to be relied in the absence of any definition. Relying upon the Supreme Court judgment in the case of Collector of Central Excise v. Krishna Carbon Paper Co. [1988 (37) E.L.T. 480], the Tribunal held that :- It is also well settled that ISI specifications should be preferred unless there are strong reasons to the contrary .... Following the above judgments, I hold that the RBD soyabean oil cannot be treated as industrial non-edible variety of soyabean oil in view of ISI specifications. During the personal hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Standard Specification ASTM are reproduced below :- Dy. C.C. 3-12-1992 NOTE As seen from IS 4276/1977 which relates to the specifications for Soyabean Oil, Refined grade of this oil (neutralised, bleached and deodorised) is suitable for direct edible consumption. However, it is seen from IS 11069/1984 which prescribes specifications for refined, bleached, hydrogenated, winterised and deodorised (RBHWD) Soyabean oil, that the flavour reversion in Soyabean Oil is a constraint in marketing the product as a direct consumption refined oil. This is overcome by the partial hydrogenation of the refined oil which improves the flavour stability. The sample tested is not found to be RBHWD grade. It is also seen from technical books that bleached, alkali refined Soyabean oil is used in paint and varnish industry. ASTM D 1462-70 prescribes specifications for refined Soyabean oil suitable for use in the paint and varnish industry. It would be clear from the above that refined Soyabean oil is used in paint and varnish industry. Sd/- (S.R. Subramanian) Chemical Examiner Gr. I For Deputy Chief Chemist. CIO-INF/20/92 Dated : 12-2-1993 NOTE Soyabean Oil Batch No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Standard reflects the requirements for Soyabean Oil and the ISI Standard 11069-1984 relates to specification for refined, bleached, hydrogenated, winterized and deodorized (RBHWD) Soyabean Oil. Page 301 ISI 11069-1984 para 7 relates to the test methods. Paras 7 and 7.1 are reproduced below :- 7. TEST METHODS 7.1 Tests shall be carried out in accordance with the methods prescribed in IS : 548 (Part)-1964, IS : 548 (Part 2)-1976, IS : 1448 (Part-21)-1970 and Appendix B as specified in col. 4 of Table 1." A perusal of the same shows that even in ISI Standards test methods are prescribed. There are two chemical test reports before us. In the first test report dated 3rd December, 1992, it is mentioned that the sample is in the form of light yellow liquid, having no perceptible odour. It has got characteristics of refined soyabean oil and in the report dated 30th March, 1993, it has been mentioned that the sample is in the form of light yellow having perceptible odour. It is neutralised, bleached and conforms to specification of soyabean. It is other than Raw Grade 2 of the oil and, therefore, is intended for industrial use. Second report is different from the first report. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
