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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 ..... 0 and is required to be assessed on the basis of invoice value and not on the basis of tariff value which had been claimed by the appellant. The appellants imported another consignment of Crude Palm Oil (Industrial grade) classified the same under CTH 1511 90 90 vide Bill of Entry dt. 6-2-2006 and claimed the benefit of concessional rate of duty under Notification No. 21/2002, dated 1-3-2002. In this case, the Commissioner (Appeals) held that Crude Palm Oil imported by the appellant is correctly classifiable under CTH 1511 10 00. Thus, in respect of the same Crude Palm Oil, the department has proposed classifying under two different subheadings and this has happened because in the first instance, the invoice value was higher than the tariff value and the department wanted to assess the goods on the basis of invoice value. In the second instance, it was the appellant's claim that the imported goods should be classified under CTH 1511 90 90 whereas the department took a stand that it should be classified under CTH 1511 10 00 and denied the benefit of exemption notification claimed by the appellant. In both the cases, the product imported was Crude Palm Oil and in the first insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess under HSN. He drew our attention to the chemical examiner's report wherein he stated that for the purpose of ISI, palm oil is referred to as refined or raw and Chemical Examiner has also stated that the imported goods were raw palm oil. He submits that raw palm oil which has been defined in the ISI and Crude Palm Oil which has been explained in HSN, are one and the same. Further, he also submits that the circular relied upon by the Revenue for the purpose of classification of the imported oil as Crude Palm Oil, was issued in view of the fact that Crude Palm Oil was given a very specific definition vide Notification No. 120/2003-Cus., dated 1-8-2003. He submits that reliance on this circular which was issued in the context of an exemption notification for classification purpose was totally wrong. He drew our attention to the second order of the Commissioner (Appeals) dated 3-6-2008 in respect of another consignment imported by them where the appellants had submitted that in terms of definition of Crude Palm Oil as given in the notification, the oil imported by them cannot be considered as Crude Palm Oil. The Commissioner has observed in his order 'to me, the description or spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the tariff. However, as pointed out by the learned advocate, the HSN provides the definition of crude oil, which is reproduced below : "Fixed vegetable oils, fluid or solid, obtained by pressure shall be considered as 'Crude' if they have undergone no processing other than decantation, centrifugation or filtration, provided that in order to separate the oils from 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. If obtained by extraction oil shall continue to be considered as 'crude', provided it has undergone no change in color, odor or taste when compared with corresponding oil obtained by pressure." 7. The above discussion about the tariff heading leads us to conclusion that the palm oil produced by mechanical extraction shall be considered to be 'Crude' provided it has undergone no change in colour, odour or taste when compared with corresponding oil obtained by pressure. The oil imported by the appellant has been tested and the test report by the Chemical Examiner reads as follows: The sample is in the form of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natory Notes to the HSN, under heading 15.07, fixed vegetable oils, fluids or solid obtained by pressure are to be considered as "Crude" if they have undergone no processing other than decantation, centrifugation of filtration, provided that, in order to separate the oils from solid particles only mechanical force, such as gravity, pressure or centrifugal force has been employed, excluding any absorption filtering process, fractionation or any other physical or chemical process. If obtained by extraction an oil shall continue to be considered as 'Crude' provided it has undergone no change in colour, odour or taste when compared with the corresponding oil obtained by pressure. 4. Crude palmolein is orange red in colour due to the presence of carotenoids. The carotenoids are destroyed during bleaching and distillation when the oil is refined. 5. With effect from 1st August, 2003, for the purposes of duty assessment, Crude Palm Oil and its fractions (which includes palmolein) have been given a more specific definition vide Notification No. 120/2003-Cus, dated 1-8-2003, (which amends Notification No.21/2002-Cus, dated 1-3-2002). As per this definition, "Crude" palm oil/palm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the Bill of Entry is filled for home consumption of the warehoused goods. 13. Action may be taken accordingly in respect of past, pending and future clearances of palm oil/palmolein. 14. Kindly acknowledge receipt of this Circular. 15. Hindi version will follow.' 10. The Commissioner has relied upon the Para 7 & 9 of the Circular in support of his view that the Circular issued clarification regarding classification of Palm Oil and it is not issued only for the purpose of particular notification, but for the purpose of classifying the imported palm oil. We find in Para 5 of the Circular it is clearly stated that for the purpose of duty assessment, Crude Palm Oil has been given a very specific definition. It is to be noted that the definition of Palm Oil has been given in an exemption notification and this definition has been communicated by way of Circular by the Board and the circular clarified that the duty assessment be made on the basis of the definition of Crude Palm Oil given in the notification. It is well settled law that for the purpose of classification, the tariff heading and the description of the tariff heading are relevant. When there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of definition of Crude Palm Oil given in the Notification No. 120/2003-Cus, and Para 7 of the Circular of Notification No. 85/2003, the imported product has to be classified under CTH 1511 90 90. In this case. Commissioner has rightly observed that in first instance, the goods have to be classified based on the tariff heading and the description. In that case the appellants had also claimed that there is nothing on record to show that the assessable value, acid value and Carotene oil in question conforming to the definition of Crude Palm Oil contained in Notification No. 120/2003-Cus and therefore, it has to be classified as Palm Oil within group. We find that the Commissioner has followed the correct principles of classification and if appellants wanted to claim an exemption, they were required to show that the product imported by them does not fulfil the definition of Crude Palm Oil given in the relevant notification. Therefore, we find that the impugned order of the Commissioner in respect of the second consignment needs no interference and the appeal against that order has to be rejected. 11. In view of the above, we allow the appeal with consequential relief in Appeal No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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