Tariff classification and assessable quantity rules for crude palm oil depend on tariff text and actual weighment at port.

Tariff classification of imported crude palm oil is governed by the tariff heading, chapter notes, section notes and HSN Explanatory Notes; an exemption notification cannot alter the scope of the tariff entry. On that basis, crude palm oil was treated as classifiable under CTH 15111000, with exemption eligibility under Sl. No. 29 of Notification No. 21/2002-Cus., and classification under CTH 15119090 was rejected. For assessable quantity, the ullage-based circular applied only where liquid cargo was discharged directly into shore tanks; where goods were transferred to tankers and weighed at the port under Customs supervision, the actual quantity loaded was the correct basis.

---

---

Issues: (i) Whether imported crude palm oil was classifiable under CTH 15111000 or CTH 15119090; (ii) Whether assessable quantity was to be determined by the ships ullage report or by the actual quantity loaded on the tankers at the port.

Issue (i): Whether imported crude palm oil was classifiable under CTH 15111000 or CTH 15119090.

Analysis: Classification of imported goods must be made with reference to the tariff heading, chapter notes, section notes and the HSN Explanatory Notes. The descriptive criteria in an exemption notification cannot be used to alter the scope of the tariff entry for classification. The imported goods were found to be crude palmolein and there was no tariff-based requirement of acid value or carotenoid content for classification under the crude oil entry. The exemption notification could govern eligibility for exemption, but not the tariff classification itself.

Conclusion: The imported crude palm oil was classifiable under CTH 15111000 and was eligible for exemption under Sl. No. 29 of Notification No. 21/2002-Cus.; the contrary classification under CTH 15119090 was rejected.

Issue (ii): Whether assessable quantity was to be determined by the ships ullage report or by the actual quantity loaded on the tankers at the port.

Analysis: The Board circular regarding ullage-based assessment applied to situations where liquid cargo was discharged directly into shore tanks. Here, the cargo was transferred from the vessel at outer anchorage to barges and then to tanker lorries, and the tankers were weighed in the presence of Customs officers at the port. In such circumstances, the quantity physically loaded at the port represented the relevant quantity for assessment.

Conclusion: The actual quantity loaded on the tankers at the port was the correct basis for assessment and the ullage report was not determinative.

Final Conclusion: The assessee succeeded on both issues, the classification adopted by the Revenue was set aside, and the assessment of quantity on the basis of actual weighment at the port was upheld.

Ratio Decidendi: Tariff classification is controlled by the tariff entry, chapter notes, section notes and HSN Explanatory Notes, while an exemption notification cannot be used to redefine the tariff description; where liquid cargo is not discharged directly into shore tanks, the assessable quantity may be taken from the actual quantity physically loaded and weighed at the port.

---