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TMI Blog2009 (6) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... not fulfil the definition of Crude Palm Oil given in the relevant notification. - C/1089/2006 & C/348/2008 - A/1378-1379/2009-WZB/AHD - Dated:- 9-6-2009 - S/Shri B.S.V. Murthy, Ashok Jindal, JJ. REPRESENTED BY : Shri P.M. Dave, Advocate, for the Appellant. Shri Sameer Chitkara, SDR, for the Respondent. [Order per : B.S.V. Murthy, Member (T)]. The appellants filed Bill of Entry on dated 15-9-2003 for clearance of the goods declared as Crude Palm Oil (Edible grade) (hereinafter referred to as Crude Palm Oil), classifying the same under CTH 1511 10 00 claiming concessional rate of duty under Sr. No. 34 of Notification No. 21/2002-Cus., dated 1-3-2002. However, the claim for exemption under Notification No. 21/2002-Cus, dated 1-3-2002. (Sl. No. 34), after getting Crude Palm Oil imported by the appellant tested by the Chemical Examiner and based on the test report of chemical examiner, impugned order-in-appeal No. 229/2006, dated 31-8-2006 has been passed whereby it has been held that Crude Palm Oil imported by the appellant is classifiable under CTH No. 1511 90 90 and is required to be assessed on the basis of invoice value and not on the basis of tariff value wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to be classified, the assessment has to be made on the basis of tariff value, if it is shown that the product imported is Crude Palm Oil. The department has relied upon the test report which has indicated the acid value and the carotenoid content in the oil. According to the HSN, Palm Oil is considered to be crude if it has not undergone any processing other than decantation, centrifugation or filtration provided that in order to separate the oil from the solid particles only mechanical force such as gravity, pressure or centrifugal force has been employed excluding any adsorption filtering process, fractionation or any other physical or chemical process. He submits that it was not sufficient for the department to get the Palm Oil examined for acid value and carotenoid content to come to the conclusion as to whether the product is Crude Palm Oil or not as per description given in the tariff. He also submits that Chemical Examiner, during the cross examination, admitted by testing the sample, he would not be able to say whether the oil had undergone any such process under HSN. He drew our attention to the chemical examiner s report wherein he stated that for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detail. The competing tariff heading are as under : 1511 Palm oil and its fractions, whether or not refined, but not chemically modified 1511 10 00 Crude Oil 1511 90 Other 1511 90 10 Refined, Bleached, Deodorized palm oil 1511 90 20 Refined, Bleached, Deodorized pamoleine 1411 90 20 Other 5. We also find that the Commissioner has correctly identified the issue by discussing the tariff headings as under : There are two subdivisions of Entry 1511. First is 1511 10 00 which covers Crude Palm Oil and second 1511 90 which covers Palm Oil other than Crude Oil. The second category has been further divided into three sub-categories. First, if the Oil is refined, bleached and deodorized, then it is to be classified under Heading 1511 90 10 or 1511 90 20 depending on whether the oil is Palm or Palmoleine. If a non crude oil is not covered under 1511 90 10 or 1511 90 20, then the same is classifiable under heading 1511 90 90. Therefore, the basic issue is whether the imported goods are Crude Oil. 6. Admittedly, Crude Palm Oil has not been defined in the tariff. However, as pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her any of the process as which according to HSN, would take the palm oil out of the description of the crude palm oil, have been carried out or not. We find considerable force in the argument advanced by the learned advocate that the imported product has to be classified under CTH 1511 10 00 only. 9. The only ground on the basis of which the Revenue has classified the Crude Palm Oil imported by them in 2003 under CTH 1511 90 90, as the circular issued by the Board on 24-9-03. For better appreciation, the circular is reproduced below : Circular No. 85/2003 24th September 2003 F.No. 528/21/2003-CUS(TU) Government of India Ministry of Finance Department of RevenueCentral Board of Excise Customs Sub : Import of Palm Oil/Palmolein in refined/crude form - reg. I am directed to say that doubts have been expressed regarding classification of palm oil/palmolein imported in refined or crude forms. 2. This matter was also discussed in the Conference of Chief Commissioners held at Mumbai on 21st and 22nd August, 2003, minutes of which have been issued vide F.No. 401/86/2003-CUS-II, dated 4-9-2003. 3. According to the Explanatory Notes to the HSN, under heading 15.07, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been decided that Bills of entry filed for home consumption prior to 1-8-2003. should be assessed on the basis of test reports of samples drawn by the Port Health Officer (PHO). If the reports mention the item as Crude palm oil/palmolein or as palm oil/palmolein which needs further processing, the report should be accepted and assessment finalized accordingly. If the test reports indicate the item as RBD palm oil/palmolein, the assessment should be finalized under sub-heading 1511 90 10. 11. However, if the test reports do not contain indications as mentioned above, the matter will have to be examined as to whether provisions of Section 28A of the Customs Act, 1962 can be invoked in this case or not based on the general practice of assessment in the past. For this, a report is being sought separately from the Commissioners. 12. In respect of warehoused goods which are cleared for home consumption after 1-8-2003 (even though imports may have taken place prior to this date) the assessment will be done as per Section 15(1)(b) of the Customs Act, 1962, i.e. at the rate applicable on the date on which the Bill of Entry is filled for home consumption of the warehoused goods. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t imported by the appellant has to be held as Crude Palm Oil only. If they do not claim the benefit of exemption notification No.120/2003, dated 1-8-2003 the definition would not be applicable. In this case, they have not claimed the same. Needless if they claim the benefit it would have to be considered as per the Notification. As regards notification and fixing tariff value, we find that the notification described the tariff value and the heading given is Crude Palm Oil classifiable under CTH 1511. Therefore, once the product is held as Crude Palm Oil irrespective of the sub-heading, the appellant would be eligible for assessment on the basis of tariff value. In view of the foregoing discussions, the appeal No. C/1089/06 against the order of Commissioner (Appeals) No. 229/2006, dated 31-8-2006 has to be rejected. As regards the appeal against the order of Commissioner (Appeals), dated 3-6-2008, the appellants have declared the imported items as Crude Palm Oil (Industrial grade) . However, the appellants took a stand that since the goods imported by them did not fulfil the criteria of definition of Crude Palm Oil given in the Notification No. 120/2003-Cus, and Para 7 of the Circu ..... 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