2007 (8) TMI 175 - AT - Customs

Tribunal Upholds Differential Duty on Cotton Seed Oil Import Due to FFA Content

The Tribunal upheld the demand for differential duty on cotton seed oil import due to FFA content below the specified threshold for concessional duty ... Samples were taken of imported goods in presence of authorized representative of importer so no violation of Sec. 144 by Dept. – Benefits of Not. 16/2000 to Cotton seed oil cannot be granted if FFA content is less than 5% - Execution of PD bond - Assessment to be upheld as provisional assessment Issues:Appeal against order of Commissioner (Appeals) upholding demand of differential duty on cotton seed oil import due to FFA content below 0.5% for concessional rate of duty under Notification No. 16/2000 and exemption from SAD under Notification 18/2000.Analysis:1. Provisional Assessment and Finalization:The appellant contended that the assessment made in March 2000 was not provisional as both test reports were available to the assessing officers. However, the Tribunal held that the assessment was provisional since the appellant executed a PD bond pending test results. The demand for differential duty was made after finalization, as allowed under Section 18 and Section 28, without causing prejudice to the appellant.2. Validity of Test Reports and Compliance with Notifications:The appellant argued that the FFA content requirement in Notifications contradicted the Prevention of Food Adulteration Rules. The Tribunal disagreed, stating that the Notifications covered a wide range of vegetable oils, not limited to cotton seed oil. Test reports confirmed FFA content below 0.5%, failing to meet the Notification's conditions, justifying the demand for differential duty.3. Sample Drawing and Owner's Presence:The appellant challenged the sample drawing process, claiming the owner was not present. The Tribunal clarified that the importer's authorized representative could be present during sample collection, as recorded in the Original Authority's order. Presence of the owner's representative sufficed, dismissing the violation of Section 144.4. Time Limit for Demand of Duty:The appellant argued that the demand for duty was time-barred, citing the test report date. The Tribunal explained that the clock for limitation stops during provisional assessment and restarts after finalization. The demand was made post-finalization based on non-compliance with Notification requirements, aligning with legal provisions.5. Conclusion:The Tribunal rejected the appeal, upholding the demand for differential duty on cotton seed oil import due to FFA content below the specified threshold for concessional duty rates. The cross-objection was also disposed of accordingly, emphasizing compliance with Notification conditions and procedural correctness in assessment and duty demand.This comprehensive analysis addresses the key legal issues raised in the appeal against the demand for differential duty on cotton seed oil import, providing a detailed examination of the Tribunal's judgment and the legal arguments presented by the appellant and the Department.