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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 ..... e time of provisional assessment, sought to classify the goods under Chapter Heading 15111000 and claimed benefit of exemption notification at Sl.No.29 of Notification No.21/2002-Cus. dt.1.3.2002 which is chargeable to 85% advalorem. The adjudicating authority while finalising the provisional assessment, classified the goods under Chapter 15119090 at Sl.No. 434 of the Notification No.21/2002-Cus. which is chargeable to 90% advalorem. Accordingly, the adjudicating authority demanded differential duty of Rs. 65,96,167/- in respect of 3 PD assessments on account of re-classification based on Acid Value and Beta Carotenoid content reported in the test report. The assessee was also directed to pay duty amount of Rs. 24,47,014/- on the difference in quantity 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods based on the description given in entry 34 of the exemption notification 21/02. He submits that entry under Sl.No.34 of the notification cannot be applied for classification of the imported goods under Customs Tariff. Entry No.34 specifies various acid value and carotenoid content for the purpose of exemption under that specific serial number and the same cannot be applied for classification of goods under 15111000 and the department relying on the specification given in entry 34 classified their goods under 15119090 without legal basis. He relied the following case laws :- (i) Gujarat Ambuja Exports Vs CC Kandla 2011 (269) ELT 239 (Tri.-Ahm.) (ii) Tata Tea Ltd. Vs CCE Kochi 2004 (164) ELT 315 (Tri.-Del.) (iii) 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together for the purpose of classification. He relied the following decisions :- (i) Cargill India Pvt. Ltd. Vs UOI 2013 (289) ELT 209 (Guj.) (ii) Aflon Engineering Corpn. Vs UOI 1992 (61) ELT 246 (Guj.) (iii) UOI Vs Aflon Engineering Corporation 2000 (122) ELT 334 (SC) 8. On the Revenue appeal, he reiterated the grounds of appeal. The quantity actually declared in the Bill of Lading at load port should be the actual quantity or ullage quantity as per the master of vessel at the time of discharge of liquid cargo. He submits that quantity declared in the Bill of Lading is the quantity carried by the vessel. After arrival at the Indian port, master of vessel / agent takes dip measurement of each tank 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-Bangalor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , section note should be the criteria. The description given in Sl.No.34 of Notfn 21/2002 specifying values is only for giving exemption to specified goods under that Sl.No.34 and classification given in circular No.84/2002 dt.24.9.2003 cannot be taken as criteria for classifying the goods under Customs Tariff. In this regard, the Tribunal's co-ordinate Bench in the case of Gujarat Ambuja Exports Vs CC Kandla (supra) on an identical issue of classification of import of crude palmolein has dealt the issue in depth and discussed the Board's circular and referred HSN Explanatory Notes and held that imported goods classifiable under CTH15111000 not under CTH15119090. The relevant paragraph of 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 tar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extraction method or any other method. On a question by Dy. Commissioner as to whether the samples in question can be considered as Crude Palm Oil, the Chemical Examiner has replied that in ISI, the palm oil is referred to as refined or raw and not as Crude Palm Oil and clearly stated that the samples were that of raw palm oil and not refined palm oil. 8. In view of the fact that tariff heading clearly segregates the 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 apprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory A 17 15 of the Prevention of Food Adulteration Act, 1956. Such RBD palm oil/palmolein would be classified under sub-heading 1511 90 10 of the Customs Tariff. 9. If any grade of palm oil/palmolein cannot be categorised as crude palm oil/palmolein or as RBD palm oil/palmolein as per specification mentioned above, it will fall under the residuary category 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r note defining the Crude Palm Oil and not by giving definition of Crude Palm Oil in a notification. The definition given in the notification can have application only for the purpose of that notification. The intention of the Government cannot be indicated by way of issue of circular by the Board. The notification is no doubt 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oil whether duty paid as per actual quantity or as per ullage survey report, revenue challenged the decision of LAA on the ground that ULLAGE survey report should be taken for the purpose of determining the quantity for assessment. We find that LAA has discussed this issue of quantification in detail at paras 2 to 6 of OIA and 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 loade ..... X X X X Extracts X X X X X X X X Extracts X X X X
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