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TMI Blog2008 (5) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... rogenation plant. They imported 3 consignments from M/s. Wilmar Trading Pte. Ltd. Singapore by declaring the same as Hydrogenated Vegetable Oil (hereinafter referred to as HVO). The first consignment of 1,227 MTs of HVO arrived in or around October 2005 and bills of entry were filed by the appellants by claiming the classification of the same under sub-heading 1516 of the first schedule of CETA, 1985. The goods were finally assessed as declared and allowed clearance for home consumption on payment of duty on 9-12-05. Another consignment of 6,691.107 MT arrived in the first week of December and bills of entry for the same were filed on 6-12-05. The Customs Officers suspected the correct declaration made by the appellant in respect of the goods as HVO and entertained a doubt that the same was Refined Palm Oil (hereinafter referred as RPO). The said consignment was not cleared and samples were drawn on 10-12-05 from the vessel tank as also from the off-shore storage tank, as the goods were already discharged. Meanwhile, a third consignment of HVO of 5699.723 MTs also arrived, for which bill of entry was filed on 17-12-05. In this case also, samples were drawn from the vessel as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for TFA contents, using FTIR method and commented that the same does not contain a measurable amount of TFA and therefore not qualified to be called as HVO. 2. During the course of investigation, office and factory premises of the appellant company were searched and inter alia, computers and laptops were seized, which included the laptop used by Shri T.K. Kannan, General Manager (Trading) and the same were sent to Director of Forensic Sciences, Gandhinagar for retrieving the date/e-mails therein. The Directorate of Forensic Sciences submitted its Report under cover of their letter dated 1-3-06. Also, during the investigations, statements of various persons were recorded. Apart from above statements of the Chemical Examiner, Kandla, PHO, Mudra Port and Chemical Analyst, Vadodara were also recorded. During the pendency of the investigations, the goods were provisionally released on execution of two Bank Guarantees aggregating to Rs. 22.27 crores and on payment of Customs duty on the declared values. 3. In the backdrop of above development, appellants were issued a show cause notice dated 16-6-06 alleging that the proper classification of the goods is under heading 1511 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner are primarily based upon the test report of the Chemical Examiner, CRCL, Customs House, Visakhapatnam on 20-12-05, 30-12-05, 2-2-06, and 21-3-06 as also by reports dated 15-2-06 and 8-3-06 of CSIR, Regional Research Laboratory, Thiruvananthapuram. Reliance has also been placed by the adjudicating authority on the e-mails retrieved from the appellant's computer. On the other hand, the appellants have relied upon the Chemical Examiner, Kandla's report and Geochem laboratory's report which are in favour of the appellant. They have also tried to establish by referring to various parameters detailed in the Visakhapatnam report and by conducting the cross-examination of Dr. Rao, Chemical Examiner of Visakhapatnam laboratory that the reports in question relied upon by the Commissioner to the come to the inevitable conclusion of the goods being RPO and not HVO, are not correct and as such, are not worthy of reliance. 8. In brief, the appellants have contended as under: (a) that as per the affidavit of all the manufacturers, the product is HVO, the manufacturing process of which has been undertaken by mixing/blending the same to partial hydrogenation. The said proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actors. One is the simultaneous isomerisation of the unsaturated bond. While isomerisation is partly glycerised, some position isomerised can also occur. It also provides that Esters may contain two, three or more unsaturated bonds in each chain and each double bond may be isomerised or hydrogenated at different rates, depending on its position and environment of the molecule. (g) To summarise, hydrogenation requires the presence of three substances * Base Oil, * Hydrogen Gas, * Catalyst-Nickel. (h) The degree of hydrogenation depends on: * temperature and pressure at which the process takes place, and * length of treatment. (i) Hydrogenation takes place when either one or both of the following occurs: * Transformation of unsaturated glycerised into saturated; * Converting the cis-form of unsaturated fatted acids into the transform in order to raise the melting point. (j) That the burden to prove classification is on the Revenue. As held by Hon'ble Supreme Court in case of UOI v. Garware Nylon Ltd.- 1996 (87) E.L.T. 12 (S.C.) and in case of Hindustan Feredo Ltd. v. Commissioner - 1997 (89) E.L.T. 16 (S.C.). The goods squarely fall within the four corne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Test reports purports to have carried out an experiment for ascertaining the fatty acid composition, in his letter dated 31-3-06 addressed to the Astt. Director, DRI, he has admitted that he has recommended the same to be tested by another laboratory. (vii) As regards the two test reports of CSIR are concerned, as admitted by Dr. Armugam in his cross-examination, hydrogenation has two major effects. These are saturated on double bond and formation of trans-double bonds. He has also explained positional isomerisation to mean inter alia, shifting of double bonds in different position of the fatty acids. (viii) The above explanation of Dr. Armugam is also supported by Bailey's which is referred to hereinabove. (ix) Neither CSIR report nor Dr. Rao's report show that no shift in the position of the double bond has occurred. As a matter of record, Dr. Rao evaded question relating to positional isomerisation. (x) At the same time, CSIR report is extremely vague and inconclusive in as much as it is reported that trans-fatty acids are not noticed in a measurable amount of trans-fatty acids. This by itself does not at all indicate whether there was any shift in the position of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by Dr. Rao are wholly irrelevant. (xiv) The e-mails do not show at all that the said goods imported by the Company are RPO. The e-mails, therefore, do not at all support the findings of the Commissioner that the goods are RPO. The company submits that on a true and correct interpretation, the emails bring out the following position: * That Wilmar along with the manufacturer in Indonesia and the Company was experiment to ensure the production of hydrogenated goods with the consistency and quality as required by the Company to be used for marketing Vanaspati under its brand name "Raag" and "Avsar" * That the Company intended to either use whole of the imported quantity for marketing Vanaspati in India or blend/mix the same at certain ratios, say 50:50, or 40:60 with indigenous hydrogenated oil. * That at the highest, it means that the manufacturer was indicating the position of the raw materials/ingredients/inputs used in the manufacture of final hydrogenated product, which in one of the mails, is suggested to be 85% RPO+11-12% HPO + Sesame Oil and others. (xvi) It is therefore, submitted that even if the e-mails are taken on the face thereof to be true and correct, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been sold and marketed as Vanaspati by the Company. Full enquiry was conducted by Revenue as to how HVO was used by the Company in the manufacture of Vanaspati. All the details of the batches of HVO sold by them as Vanaspati has been verified by the Department and there is no dispute about the same. No further hydrogenation was undertaken by them in respect of the imported goods and after the process of cleaning, the same were packed and sold as Vanaspati. This is most decisive and determinative fact establishing beyond doubt that the said goods are nothing but HVO. 9. As against the above submissions made by the appellants, Revenue in their written submission have pleaded as under: (i) that in view of the definition of hydrogenation given in Bailey's Industrial Oil and Fat Products, it is essential to confirm whether the impugned products are hydrogenated or not, before any specifications laid down in A. 19 in Annexure B of the PFA Rules, 1955, can be applied and to confirm whether the alteration in the molecular structure and composition of glycerol easter have taken place. That the hydrogenation process involves the systematic dilution of linoleic acid into oleic acid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Laboratory, Thiruvananthapuram, as per the request of the appellant and the test report indicated that the samples did not contain a measurable amount of trans-fatty acids and therefore, could not be qualified to be called as HVO. During the cross examination, Dr. Arumughan, Head of Agroprocessing and Natural Products on 19-3-07 that FTIR details TFA (Trans Fatty Acid) even at 1% level over the accuracy but is far better above 5% and that the oil taken for hydrogenation itself could contain small amounts of TFA and therefore intervention of hydrogenation should increase the TFA content above the base level and vanaspati as HVO should contain 20 to 35% of TFA. 10. After appreciating the detailed submissions made by both sides, we note that the dispute to be resolved in the present appeal is as to whether the product imported by the appellant is to be held as Palm Oil falling under Customs tariff heading 15.11 or the same is HVO classifiable under heading 15.16 of the 1st Schedule to the Customs Tariff Act, 1975. For better appreciation, we reproduce both the entries. Tariff Item Description of goods Unit Rate of Duty Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st and to effect solubilisation of the hydrogen, thus enabling it to react on the surface of the catalyst with a double bond in the oil. Hydrogenation is unique among the unit processes employed in oils and fats manufacture in that it alters the molecular structure and composition of the glycerol easter. Other processes, except in a minor way fore asterification, are principally for separation and/or purification." (ii) The specifications for HVO are laid down in A. 19 in Annexure B of the TFA Rules, 1965. The appellants had put on record an affidavit from the manufacturer of the goods on the process of manufacture. According to the said affidavit, there are two methods to manufacture HVO. In one method, the raw material consists of crude palm oil and after refining the same is hydrogenated. The second method adopted for hydrogenation of mixing and blending of RPO with small quantity of HVO and subjecting the mixture to the process of partial hydrogenation. As per the said affidavit, HVO is added to expedite the manufacturing process. In any case, the end result is HVO. (iii) Revenue's main reliance is upon the test report of the various samples, which are more or less identica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sample, melting point has remained constant. Similarly, as admitted by Dr. Rao, in his cross examination, the relationship between the refractive index and melting point are directly proportionate. Though there are small minor changes in the refractive index, there is no change in the melting point. Further, the said test report stands assailed by the appellant on the ground that the test for nickel which is a catalyst and is one of the most vital test, has not been conducted quantitatively in the said report of Dr. Rao. However, in response to the appellant's letter, Dr. Rao, in his letter dated 31-3-06 addressed to the Assistant Director, has observed in Para 5 that quantitative presence of nickel found in the sample is less than 0.1 ppm for all samples. He further goes on to say that presence of more nickel is prohibited in HVO, but there is no indication of minimum nickel presence. However, this fact leads us to conclude that presence of nickel to the extent of 0.1 ppm, in the disputed sample, is sufficient to hold that the samples cannot be of RPO, in much as, there is no justification for presence of nickel if the base oil has not been hydrogenated. Admittedly, Nickel acts as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much as the addition of Vitamin A will take the product out of the category of RPO. In terms of standard A.19 [x(1), Vanaspati shall show positive test for Vitamin A, when decided by Antimoney Trichloride (CARR-PRICE) reagent. As such, the presence of Vitamin A is indicative of the fact that the goods are hydrogenated. Revenue's contention that the presence of Vitamin A and sesame oil should be ignored in as much as other parameters match with RPO specification, cannot be accepted. The other values as arrived at in the test report also match with the standards of HVO. (vi) The learned SDR has further argued by drawing our attention to the two test reports of two Govt. recognized laboratories, viz. Harcourt Butler Technological Institute, Kanpur and National Agriculture Food Analysis and Research Institute, Pune, that the codex range test and fatty acid composition revealed the presence of linoleic acid in all the samples. On the other hand, the samples of Vanaspati manufactured by the appellant showed Nil presence of linoleic acid. In as much as the samples showed presence of linoleic acid, as given in the palm oil codex range, it can be safely concluded that the imported con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shows that the goods are HVO conforming to the standards and specifications of Vanaspati laid down under the provisions of Food Adulteration Act, 1955. All these test reports carried out on the various samples have been looked into by us and are found in favour of the appellant laying down that the samples are HVO. Similarly, the reports given by Geochem lab in respect of the samples drawn in presence of DRI, was in favour of the appellant. The two test reports of two Govt. recognized laboratories, viz. Harcourt Butler Technological Institute, Kanpur and National Agriculture Food Analysis and Research Institute, Pune also supports appellant's case that the goods were nothing but HVO. We find that while dealing with more or less identical issue, the Tribunal in case of M/s, Supertech Agro Oil Pvt. Ltd. v. Commissioner of Customs, Amritsar as reported in 2007 (216) E.L.T. 618, has held that where the laboratory reports differ, and evidence is not conclusive, the benefit should go to citizen. (ix) By comparing the evidentiary value of the various test reports, where some are in favour of the Revenue and other in favour of the appellant, we hereby conclude that the, goods were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were meant for use in the manufacture of Vanaspati. A part of the goods which already stands cleared by the appellant was admittedly used in the manufacture of Vanaspati under their brand names "Raag" "Avsar". The appellant had already produced on record an enquiry made by Revenue regarding use of HVO imported by them and sold as Vanaspati, after a simple process of removing impurities, cleaning and packing. The appellant also has not undertaken further hydrogenation process on the said goods, thus, indicating that what was imported and sold as Vanaspati was nothing but HVO. Thus, the actual use of the product in the market where it is known, sold and used as Vanaspati, is the additional indicative of the goods being HVO. (x) As we have concluded on the basis of various test reports and technical aspects of the product that the goods are HVO, we are of the view that the text of e-mail relied upon by the Commissioner may not be of much use. In any case, we have gone through the e-mail and found that they nowhere indicates that the goods are RPO and not HVO. Admittedly, the said e-mails suggests addition of 11-12% of HVO and other products, which in fact, supports the appellant' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndition in which they were imported were hydrogenated or not. 14.2 It is common knowledge that the crude palm oil when processed becomes refined palm oil and when further subjected to process of hydrogenation becomes hydrogenated vegetable oil (also known as 'Vanaspathi'). Therefore, there are bound to be some common characteristics among the above three categories of goods. These characteristics are specified generally in a range. 14.3 But the "hydrogenation" is a chemical process. Because of hydrogenation the product undergoes several physical and chemical changes. Hydrogenation is an exo-thermic reaction i.e. it involves heat being emitted during the course of hydrogenation. It involves alteration in the molecular structure and the systematic dilution of Linoleic acid into Oleic acid and then to Stearic acid; because of hydrogenation the configuration also changes from a sis-form to a trans-configuration it can involve shifting of bonds it involves change in melting point and Iodine value the TFA (Trans-fatty acid) content etc The hydrogenation can be partial or full. The hydrogenation process can be speeded up by adding Nickel as a catalyst (the role of a catalyst is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Rules, 1956 for Vanaspathi; but confirmed that samples tested were hydrogenated vegetable oil (edible grade). The Chemical Examiner Shri Narendra Kumar in his statement dated 18-1-2006 has stated that their laboratory at Kandla is not equipped to conduct tests of Gas Chromatograph(DSC), solid fat index etc. Therefore, his test reports are not reliable for the issue on hand. 16.4 The load port documents like mate receipts, customs declaration are being sought to be relied by the appellants. The mate receipts given by the vessel in-charge at the load port is just an evidence for receipt of the goods on board the vessel. The authority issuing mate receipts is neither required to test or examine the nature of cargo and the issuance of the receipt is basically based on the declaration by the exporter. They are concerned only about parameters relevant for their purpose like collection of freight etc. Similarly the declarations by the exporter to the Customs at the port of export cannot be taken to overrule test reports conducted from the imported consignments. There is no indication that the declarations were found to be correct by the Customs through any test conducted at the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is having characteristics of RBD palm oil. It is other than hydrogenated vegetable oil. Acid value 0.11, Moisture 0.1. Further representative samples were drawn from the cargo imported per MT Monalisa and stored in Tank No. 4, 5 and 12 on 31-12-2005. The samples were sent to Chemical Examiner, Custom House Laboratory, Visakapatnam vide Test Memo. No. 5/2005, dated 20-1-2006. The Chemical Examiner, Custom House Laboratory, Visakapatnam vide his report dated 2-2- 2006 reported that the samples were having the characteristics of RBD Palm Oil and were other than hydrogenated vegetable oil. Samples drawn by officers of Custom House, GAPL, Mundra on 9-11-2005 were forwarded to DR1 by Dy, Commissioner of Customs, GAPL, Mundra vide letter F.No, GPAL/HVO/AWL/2005, dated 27-12-2005. The sample was apportioned on 29-12-2005 into four parts at M/s. Geochem laboratories Pvt, Ltd., Gandhidham under panchnama. The samples were sent to Chemical Examiner, Custom House Laboratory, Visakapatnam vide Test Memo. No. 03/2005, dated 30-12-2005. The Chemical Examiner, Custom House Laboratory, Visakapatnam vide his report dated 21-3-2006 reported that the sample is in the form of pale yellow soft so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers need not be entered in the TM. Based on the tests findings, the CE will issue the report. Q36. Can you produce the findings? A36. I have few test findings with me which I submit for perusal. Q37. What are the ingredients or substances required for the process of hydrogenation? A37. Refined Vegetable oil and Hydrogen. Q38. Any other substance, apart from the two mentioned above? A38. They use nickel as a catalyst. Q45. Why were the samples not tested for A. 19.0 of PFA Rules? A45. A. 19.0. is vanaspathi labeled as vanaspathi and the samples sent for testing is mentioned as hydrogenated vegetable oil. Hence, it was not tested under A. 19.0. Q49. Are you aware about the concept of quality of catalyst and its relevance under PFA? A49. Nickel in general is injurious to health. That is why a limit of its quantity in vanaspathi is fixed at 1.5 pppm. Q54. Please see the PFA Act and the Rules and read A. 17.19 which relates to palm oil and A. 19 which relates to vanaspathi, do you agree that to some extent, the range of values of MP between these two products overlaps? A54. There is overlap between 31 to 37. Q58. Can palm oil have MP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought for further test known as Trans Fatty Acid Analysis. As requested by them, the same was got done from the CSIR Laboratory. As per the reports of CSIR, the product could not he considered as HVO. The extracts of reports of CSIR are as follows No. Sample identity Comment 1. One Jerry can of 1 lit, of sample duty sealed and signed by officers, panchas and surveyors-MT Theresa The sample does not contain measurable amount of trans fatty acid and therefore cannot qualify to be called Hydrogenated Vegetable Oil. 2. One plastic bottle of 0.500 ltr. of sample duly sealed and signed by officers of DRI, panchas and surveyors (M/s. Geo Chem Laboratories) MT Monalisa. The sample does not contain measurable amount of trans fatty acid and therefore cannot qualify to be called Hydrogenated Vegetable Oil. 3. One glass bottle of 100 ml. duly sealed with M/s. Geo Chem and DRI seal and signed by representative of M/s. Adani Wilmar Ltd., the importer, M/s. Devji Premji Poojara Sons, the CHA and M/s. Geo-Chem Laboratories, Gandhidham, the surveyors-MT Tirta Niaga I The sample does not contain measurable amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Food Products including Vegetable Oils. Q.6. Can you in your own words define HVO? Ans : Refined Vegetable Oils that has undergone the process of hydrogenation. Hydrogenation is a process by which Hydrogen molecules are introduced into double bonds of the concerned refined oil to obtain desired functional property of the HVO. Q.7. Is there a statutory definition of HVO to your knowledge? Ans : If am correct, PFA mentions about a product called Vanaspati, which is made by hydrogenation of vegetable oil. Q.9. Is there no difference according to you between vanaspati and HVO? Ans: HVO is a generic name and Vanaspati is actually Indian nomenclature for HVO. There are other types of HVO by names. Q.11. What is the effect of Hydrogen on the double bonds? Ans: The major two effects are: (a) Saturation of the double bonds (b) Formation of trans double bonds Q.13. So it follows that even if the double bonds are present, the product shall still be hydrogenated on account of mere shift in the position of the bond from cis to trans. Ans : My answer is the process of hydrogenation and reactions are complex and several changes happens of which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A submission has been made that the reports of Dr. Rao and Dr. Arumugam of CISR are not supported by technical book or authority. This submission is devoid of merits. We are dealing with technical persons in their area of specialization. They are experts in their own field. Their evidence should not be treated as that of a witness in a criminal prosecution. We are not to ask for authority for every word uttered by them. We have to merely see whether there is any valid reason to disagree with their opinion. They have indicated broadly the basis on which tests were conducted and the parameters based on which they came to the conclusion in their reports. They have answered in depth questions put to them during cross-examination. They have been adequately tested on their test reports by way of cross-examination before adjudicating authority. Dr. Rao of CRCL, Vizag and Dr. Arumugam of CISR have been cross-examined both extensively and intensively on their test reports. During cross-examination, no material which can invalidate their opinion that the imported material is RPO and not HVO has been brought out. There are no valid reasons to differ from their opinion that the product import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hemical Examiner, Vizag, the presence of linoleic Acid in the samples tested by him are indicative of the fact that they are not hydrogenated. The technical opinion that normal Vanaspathi does not have linoleic acid as an ingredient is acceptable in the light of other evidence. This opinion is upheld even after ignoring the test report on Vanaspathi procured from the market. 19.8 A submission has been made that the inverse relationship between Iodine value and melting point is not reflected fully in the test report. It is not that the melting point is dependent only on the Iodine value. This may be explained by an example. If ten persons working complete a work in ten days then if twenty persons are engaged normal expectation is that the work will be completed in 5 days. However, if another relevant factor i.e. the no. of hours each worker is working is changed then the work will not be completed in five days. If the no. of hours is increased then it will be completed in less than five days and if the no. of hours is reduced then it can take more than five days for completing the work. Similarly, to say that the changes in Iodine value has not produced proportionate change in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the goods supplied is evident from the e-mails relied upon. What was added was not specifically disclosed. Such addition could have influenced the test results by showing presence of other materials. It can also affect the physical characteristics like melting point. 20. From the above, the following emerges :- The three consignments imported by the appellant are identical, They have been specially made for them by adding certain substances. The veracity of the test reports given by Chemical Examiner, Vizag and CSIR have been tested adequately by subjecting the authors of the report to cross-examination and hence reliable. Therefore, the Commissioner's finding that the imported items should be classified as Refined Palm Oil (RPO) falling under chapter No. 15 11 90 10, that the value should be enhanced, that the differential duty shall be payable, that the goods are liable for confiscation and penalty is imposable are sustainable. However, there is no warrant and justification for a separate penalty on the General Manager. 21. In view of the appeal no. C/138/07 filed by the appellant company is rejected and the appeal no. C/139/07 by the General Manager is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rogenation'. Hydrogenation takes place when hydrogen is added at a suitable temperature and pressure in the presence of a catalyst and this brings out chemical reaction in the double bonds which are naturally present in edible oils and which raise the melting point and transform unsaturated glycerides into saturated glycerides. The goods in the present case have been manufactured by P.T. Multimas Nabati Asahan of Indonesia. The only direct evidence on whether the process of hydrogenation has taken place or not is the affidavit of the manufacturer which reads as under: "AFFIDAVIT We, at M/s Multi Nabati Asahan at Kuala Tanjung having our office at Medan do hereby affirm and solemnly state as under: We are making this affidavit at the request of M/s. Adani Wilmar Limited who have asked us to state the facts relating to the manufacture of Hlydrogenated Vegetable Oil (HVO) at our factory at Kuala Tanjung which were shipped per three vessels namely, Tirtha Niaga II, Theressa II, Monalisa. We say that HVO is manufactured by the following two methods; (a) in the first method; the raw material consists of Crude Palm Oil (CPO), which undertakes the process of Refining and thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gen is added and the extent of conversion of linoleic acid into oleic acid and further conversion of oleic acid into stearic acid depends upon other factors such as quantity of hydrogen gas, temperature, pressure, nature of the catalyst, duration of the process of hydrogenation, values of the naturally present fats and acids in the base oil, etc. It is pertinent to note that for the purpose of classification under Heading 15.16, even partial hydrogenation is sufficient. No minimum limit has been prescribed for partial hydrogenation. Neither HSN Explanatory Notes nor other technical books relied upon by the Commissioner prescribe that partially hydrogenated oil should not contain any trace of linoleic acid and I, therefore, reject the contention of the Revenue based upon the Chemical Examiner's report that presence of linoleic acid in the samples of the goods tested by him leads to the conclusion that the goods are not hydrogenated. 29. Reports of the Chemical Examiner, Vishakhapatnam are also to be discarded on other grounds. In his cross-examination the Chemical Examiner Dr. Rao has admitted that the relationship between melting point and iodine value is inversely proportionat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n their test reports dated 12-4-2006 and 31-5-2006 respectively. Al though the above test reports were available with the Commissioner he has completely overlooked the same. In the above situation where more than one test report of government laboratories was available on record showing different result it is not possible to accept only one of them which is in favour of the department when the conclusion in such report is: (a) not supported by independent technical authorities; (b) belied by other evidence on record such as test reports confirming the presence of nickel, sesame oil and vitamin A as well as conformity with the parameters (specifications) of PFA standards. 32. The question relating to positional isomerisation is very significant. This is, because as explained by Dr. Arumugam the conversion of unsaturated glycerides into saturated glycerides and the transformation of Trans Double Bond is vital for the purpose of ascertaining whether the products are hydrogenated or not. The relevant portion of Dr. Arumugam's cross- examination is reproduced as under: "Q.10: From your explanation of HVO stated above do we take it that as long as Hydrogen reacts with Refined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the clarification of the Director of Vanaspati, Vegetable Oils and Fats, New Delhi in its letter dated 29-12-2005 that TFA is not a requirement for HVO/Vanaspati. As regards e-mails, I have perused them and find that none of them mention that process of hydrogenation is not undertaken by the manufacturer/supplier. There is a discussion on the percentage of the material contained in the goods imported, but that by itself does not rule out the process being carried out by the foreign supplier. This has also been explained by the manufacturer in the affidavit reproduced herein above. A combined reading of all the e-mails shows that the appellants intended to import HVO for blending the same with locally manufactured hydrogenated oil and selling the same as Vanaspati. Findings of the Learned Member (Judicial) in para (ix) also brings out the use for sale as vanaspati (HVO). 35. It is well settled that the burden to prove the classification is upon the department. The Revenue must establish that the goods fall within the four corners of the taxable entry - in this case Chapter heading 15.11, as RPO. The Revenue has failed to prove that no hydrogenation was undertaken. The case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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