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TMI Blog2015 (9) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... o specific chapter note or HSN Explanation specifying criteria of acid value or carotenoid content for classifying the crude oil, therefore the goods imported are appropriately classifiable under Chapter 15111000 of CTH and any specific description given under Sl.No.34 of notification 21/2002 for the purpose of exemption cannot be taken as criteria for classification of the product under Chapter Heading 15119090 as Others. Following the Tribunal s decision [2009 (6) TMI 662 - CESTAT, AHMEDABAD], we hold that imported crude palm oil is rightly classifiable under chapter heading 15111000 of CTH and rightly eligible for exemption under Sl.No.29 of Notfn 21/.2002 and not under Sl.No.434 of the notification. The impugned order to the extent of classification of goods under chapter 15119090 is liable to be set aside. Vessel has not discharged imported crude oil to shore tank directly but which are transferred to the barges and loaded into the tankers. The actual weighment of the tankers is done at the port and it is the quantity which should be taken for assessment - The Hon’ble Supreme Court in the case of Garden Silk Mills Ltd. (1999 (9) TMI 88 - SUPREME COURT OF INDIA) held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity of imported goods arising between quantity of import as per Ullage Survey Report and quantity cleared on payment of duty under PD bonds vide his order dt.12.2.2006. 3. In the first round of litigation, the assessee filed appeal against the said order dt. 12.2.2006. The Commissioner (Appeals) set aside the order and remanded the matter to the adjudicating authority with a direction to follow principles of natural justice. In his de novo order, the Commissioner after issuing of SCN and personal hearing passed the adjudication order dt. 13.6.2007 and classified the goods under Chapter 15111000 under Sl.No. 29 of the Notification No.21/02-Cus. and also dropped demand of differential duty and also held that appellant-assessee are eligible for the refund of ₹ 64,44,882/- on the re-classification issue and set aside the demand of ₹ 24,47,014/- on the quantity issue. 4. The Revenue reviewed the said OIO and filed appeal before Commissioner (Appeals) on two grounds viz. (i) on the classification of crude palm oil classifiable under chapter 15119090 under Sl.No. 434 of Notification No.21/2002-Cus. thereby rejecting the consequential refund (ii) whether the actual quan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) TTK Health Care Ltd. Vs CCE Aurangabad 2008 (231) ELT 273 (Tri.-Mumbai) (iv) CCE Navi Mumbai Vs Amar Bitumen Allied Products Pvt. Ltd. 2006 (202) ELT 213 (SC) (v) Garden Silk Mills Ltd. Vs UOI 1999 (113) ELT 358 (SC) 6. Regarding the quantity dispute in the Revenue appeal, Ld. Advocate submits that both the adjudicating authority as well as Commissioner (Appeals) have rightly held the actual quantity of crude palm oil loaded in the tankers which was weighed at the port in the presence of Customs officers. He submits that the goods were imported in Pondicherry port where there is no shore tank facility available. Therefore, the vessels cannot discharge the oil directly to the shore tanks. The imported oil is brought to the port from the vessels at outer anchorage through barges. The oil is pumped into tanker lorries in the presence of customs officers and the quantity loaded on each tanker is weighed in the Port and thereafter transported to the private bonded warehouse. Therefore, the actual quantity imported into India is the quantity which left the port as per the actual weighment in the presence of custom officers. Departments relying on Boards circular No.96/2002- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the vessel which is called Ullage quantity which is done by the Joint Ullage survey. Therefore, the quantity taken in the truck and stored in the private bonded warehouse does not refer to the actual quantity. He referred to para-7 Boards circular dt.27.12.2002 where the Board has categorically clarified that Ullage quantity should be taken. In this regard, he relied the following case law :- (i) Mangalore Refinery Petrochem Ltd. Vs CC Mangalore 2006 (205) ELT 753 (Tri-Bangalore) (ii) CCE Vs Nikhil Refineries Ltd. - 2011 (272) ELT (Tri.-LB) Ld. AR submits the Garden Silk Mills case relied by assessee is not applicable to this case. 9. In counter, the learned advocate relied para 3 4 of OIO and submits that the goods were not discharged directly from the vessel at the port instead the vessel was at outer anchorage where the oil was discharged into barges which was brought to the shore and loaded on the tankers. The tankers were weighed in the presence of customs officers and bills of entry were filed as per the quantity weighment done at the port. He submitted that Boards circular dt. 27.12.2012 is not applicable and submits that if there was a shortage, it was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal s order is reproduced as under :- 4. We have considered the submissions made by both sides in 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 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he crude oil and others between 1511 00 and 1511 90 (divided to further headings), what we have to decide is as to whether the imported palm oil in this case is Crude or not. The Chemical Examiner has clearly stated that it was raw oil and he was not in a position to say whether 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory of other-other, under sub-heading 1511 90 90. 10. The next issue is regarding assessment of imports which have taken place prior to 1-8-2003. It is observed that prior to 1-8-2003, the item Crude Palm Oil/Palmolein was neither defined in the tariff nor in any exemption notification. Keeping this in view, it has 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 goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valid because being an exemption notification, it can restrict the exemption to a particular class of the goods, whereas the scope of tariff heading can be modified only by adding a chapter note or by changing in the tariff heading. We have to hold that the reliance of the Commissioner on the circular is mis-placed and the product imported by the appellant has to be held as Crude Palm Oil only..... 12. The above decision is squarely applicable to the present case as the department chose to classify the imported goods under Chapter 15119090 based on the acid value and carotenoid content as per description given under Sl.No.34 of the Notfn 21/02 and as per the Board s clarification dt.24.9.2003. In consistent with the above Tribunal s decision, we are of the considered view that classification of imported goods should strictly be made as per the chapter note, section note and the description of specific sub headings read with HSN Explanatory Notes. Main Chapter heading 1511 covers palm oil and fractions whether or not refined but not chemically modified. Chapter 15111000 covers crude oil and chapter 151190 covers Others. On perusal of records, and test reports, we find there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also relied Hon ble High Court s order in the case of Godrej Industries Vs UOI. 14. We find that the department s contention is based on the Board s circular dt.27.12.2002 wherein it is clarified that in the case of oil imported in bulk, the assessment of duty to be done as per the ships ullage survey report. On perusal of the said circular, we find that the said circular is issued based on the apex court s decision in the case of Garden Mills Vs UOI (supra). In the present case it is a fact that the imported crude palm oil was not discharged to the shore tank by the vessel at the port of discharge i.e. Pondicherry Port. It is a fact that Pondicherry port did not have facility to discharge liquid cargo to any shore tanks. The vessel was brought to outer anchorage and the imported crude palm oil was transferred to barges and brought to the port and then loaded to the tanker lorry. As rightly contended by the assessees, the tankers were weighed at the port in the presence of customs officers before it is cleared from the port to private warehouse. Therefore, we find that Board s circular dt.27.12.2002 pertains to cases where the liquid cargo is discharged directly to the shore tank ..... X X X X Extracts X X X X X X X X Extracts X X X X
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