TaxTMI 
TaxTMI 
TaxTMI 
2010 (12) TMI 24
X X X X Extracts X X X X
X X X X Extracts X X X X
....arin', the subject matter of classification in question, was imported through Kakinada port during the period from 26.08.2003 to 28.12.2004. Whereas the Respondent-assessee sought to classify the goods in question under Tariff Item No. 15 11 90 90 of the Customs Tariff Act, 1975 as "Non-edible Industrial Grade Crude Palm Stearin", the appellant classified the goods in question as "RBD Palm Stearin" falling under Tariff Item No. 38 23 11 12 of the Act, chargeable to duty at BCD 25%, CVD 16% and 4% SAD. Under Tariff Item No. 15 11 90 90, the assessment was charged at BCD 20% and nil CVD/SAD. The Assistant Commissioner of Customs asked the Respondent to pay the differential duty, under S.28 of the Customs Act, 1962. 3. The Chemical Examiner, Visakhapatnam reported that the goods in question were RBD Palm Stearin with an admixture of Palm Fatty Acid Distillate (in short "PFAD") and not crude palm stearin as declared by the importer. After due adjudication process, the Assistant Commissioner of Customs finalized the Bills of Entry by classifying the impugned goods as RBD Palm Stearin falling under Sub-heading No. 3823.11.12 of the Customs Tariff Act, 1975 and demanded the differential ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce over a general description as in Tariff Item No. 15 11 90 90. As per Rule 3(a) of the General Rules for Interpretation of the First Schedule to the Act, when for any reasons goods are prima facie classifiable under two headings, the general description must give way to the specific. b. In separate test reports in respect of samples drawn from various consignments, the Chemical Examiner, Vishakhapatnam reported that the goods in question are RBD Palm Stearin with PFAD and not Crude Palm Stearin. The report clearly indicates that the substance has been chemically modified, and cannot be called crude' in any way. c. Reliance on the Jocil Ltd case by the CESTAT is contentious as its decision in the same matter has been challenged by the appellant in the HC and is pending. d. The Six-digit First Schedule to the Customs Tariff Act, 1975 was substituted by the Eight-digit First Schedule vide the Customs Tariff (Amendment) Ordinance, 2003 and this substitution w.e.f. 01.02.2003 has statutory force. Therefore, the new Schedule would operate over and above the CBEC Circular dated 03.12.2002 and the latter would not be applicable since the new Schedule was not operational at the time o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ap manufacturers in the country, where the product in question is classified under Tariff Item No. 15. 8. In order to determine the appropriate nature of the subject matter in question, as well as to adjudicate upon classification of the same under the Act of 1975, we may refer to the sub-headings involved herein: - 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 deodorised palm oil [...] 1511 90 90 --- Other 3823 Industrial Monocarboxylic Fatty Acids; Acid Oils from Refining; Industrial Fatty Alcohols Industrial monocarboxylic fatty acids; acid oils from refining: 3823 11 -- Stearic acid: -- Palm stearin: 3823 11 11 ---- Crude 3823 11 12 ---- RBD 9. Heading 15.11 covers palm oil and its fractions, whether or not refined, but not chemically modified. According to the Harmonized Commodity Description and Coding System (for short "HSN") Explanatory Notes developed by the World Customs Organization, Chapter 15 covers vegetable or animal fats and oils and their fractions when used as foodstuffs or for technical or industrial purposes. The CESTAT, in deciding ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erein the essential character of the subject matter determines its classification. 12. We also find that Rule 1 of the General Rules of Interpretation specifically state that "the titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following (subsequent) provision:" The headings are of paramount importance, and as the HSN Explanatory Notes state, the headings are expected to cover the broad ambit of classification since it is impossible to cover all the goods specifically in titles. It is relevant to note that the title of Chapter 15 reads "Animal or vegetable fats, oils, waxes, etc." and for goods to fall into Chapter 15, there has to be the element of "edible oil". Non-edible industrial grade oil cannot by any stretch of imagination be brought within the ambit of Animal or vegetable "edible oil". However, Rule 3(a) of the General Rules of Interpretation stipulates that the "heading which provides the most specific description shall ....