Crude edible oil exemption turns on intended refined use, and extended limitation fails absent suppression.

Crude rice bran oil imported for refining and eventual edible use qualified for exemption under the customs notification covering crude and edible grade goods; the decisive factor was its intended and actual use after refining, not its immediate fitness for human consumption at import. The denial of exemption was therefore unsustainable. Extended limitation could not be invoked because the bills of entry disclosed the classification, the goods were examined and assessed, and no suppression of material facts was established. On that basis, the demand, interest, and penalties could not survive, and the assessee obtained relief.

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Issues: (i) Whether crude rice bran oil classified under the relevant tariff entry was entitled to exemption under the customs notification as "all goods, crude and edible grade" when the oil was to be refined and used for edible purposes; (ii) Whether the demand could be sustained by invoking the extended period of limitation on the allegation of suppression.

Issue (i): Whether crude rice bran oil classified under the relevant tariff entry was entitled to exemption under the customs notification as "all goods, crude and edible grade" when the oil was to be refined and used for edible purposes.

Analysis: The notification covered goods of crude and edible grade under the relevant headings. The decisive factor was not the acid content at the stage of import, but whether the imported crude oil was intended for refining and thereafter used for edible purposes. The Supplementary Note to Chapter 15 of the Customs Tariff Act, 1975 and the food safety regulations supported the view that such oil becomes fit for human consumption after refining. The Board's circulars also clarified that vegetable oils of edible grade include oils fit for human consumption after further processing, and that the benefit is admissible where the oil is ultimately used for edible purposes.

Conclusion: The exemption was admissible and the denial of exemption was unsustainable, in favour of the assessee.

Issue (ii): Whether the demand could be sustained by invoking the extended period of limitation on the allegation of suppression.

Analysis: The bills of entry were filed under the declared classification and the assessing officers had tested the goods and extended the exemption at the time of assessment. The record did not establish any suppression of material facts. The acid value at the crude stage was held not to be the relevant basis for alleging suppression in the circumstances of the case.

Conclusion: Invocation of the extended period of limitation was not justified and the demand was time-barred, in favour of the assessee.

Final Conclusion: The customs demand, interest, and penalties could not survive, and the appeal succeeded with consequential relief.

Ratio Decidendi: For crude edible oil imported for refining, exemption depends on its intended and actual use for edible purposes after refining, and not on its immediate fitness for human consumption at the time of import; where classification and assessment were made on disclosed facts, extended limitation cannot be invoked without suppression.

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