TaxTMI 
TaxTMI 
2012 (10) TMI 8
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....ant is registered with the Central Excise Authorities. The said unit of the appellant is capable of reducing the free fatty acid up to 0.25% by refining of the Crude Palm Oil. (b) In the usual course of business, the appellant on December 23, 2010 purchased two consignments of Crude Palm Oil (Edible Grade) from Indonesia. Those two consignments were shipped against the Bill of Lading dated December 15, 2010 and on December 22, 2010 the same arrived at the port of Haldia. (c) The Crude Palm Oil being exempted from customs duty when imported for manufacture of refined oil, the appellant furnished a Bond, under the Customs (Import of Goods at Concessional Rate of Duty for the Manufacture of Excisable Goods) Rules, 1996. (d) On learning about the arrival of the said two consignments at the Port of Haldia, the appellant filed Bill of Entry dated December 23, 2010 for the clearance. The appellant declared full particulars of the shipping documents in the said Bill of Entry, which, inter alia, included the Pre-Shipment Certificate of weight and quality dated December 14, 2010. (e) The app....
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....he standards laid down under PFA 1955 and upon such processing to permit the clearance thereof in such time and manner as may be permitted by the said Hon'ble Court; (b) A writ of and/or in the nature of Certiorari directing and commanding the respondents to transmit the records relating to the case to the said Hon'ble Court after certifying the same so that conscionable justice may be administered on the basis thereof; (c) Rule NISI in terms of prayers above; (d) Injunction restraining the Respondents and each of them their officers and subordinates from causing any delay or further delay in allowing the petitioner to process the imported consignment under Bill of Entry No. 2471923 dated 23rd December 2010 to conform to the standards laid down under PFA 1955 and upon such processing in clearance thereof any further in any manner whatsoever; (e) ad-interim order in terms of prayer above; (f) Costs of and incidental to this application be paid to the petitioners by the respondents; (g) Su....
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....dard thereof is laid down. The other part is imported Palm oil. The legislature has specifically excluded the imported palm oil from the 1st portion of 17.19 consciously, but in the proviso thereto provided intentionally that Palm Oil imported into the Country shall be refined before it is supplied for human consumption and the same shall conform to the Standards laid down under A.17.15. The standard under A.17.15 is of Refined Vegetable Oil i.e. Refined bleached and deodorized and the conditions stipulated thereunder are; (a) The name of vegetable oil from which the refined oil has been manufactured has to be clearly shown on the label of the container, and (b) The Standards prescribed under PFA Rules for the specified edible oils shall also apply except for Acid Value which shall not be more than 0.5. Accordingly, in terms of the said provisions under 17.15, it is ex facie evident that the standards prescribed under the said rules i.e. under Schedule 17.A and Subheadings A.17.01 to A.17.26 are for "edible oils" and that after manufacture of edible oil the requirement of packaging and labeling are also mandatory. In ot....
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....) in exercise of power under Foreign Trade (Development and Regulation) Act, 1992 by regulating import of Crude Palm, Oil of description specified under the said Notifications. Crude Palm Oil (Edible Grade) was defined for the first time under Customs Notification No. 120/2003-Cus., dated 1st August, 2003 and the same was brought under Serial No. 30 the Notification No. 21/2002 by another Notification being No. 91/2007 dated 2nd August, 2007. Crude Palm Oil (Edible Grade) has neither been defined nor any standard, thereof has been prescribed under the PFA Rules or any Appendix or Schedule thereof. Under Customs Laws (Notification 21/2002-Cus., dated 1st March 2002 as amended) provides that import of Crude Palm Oil having Acid Value of 4 and above would be permitted import for refining the same and the PFA Rules provides that the refined oil manufactured out of imported Palm Oil has to meet the Standard of edible oil prescribed under 17.15 and 17.19 except in respect of Acid value which should not be more than 0.5. It is pertinent to mention that it is unlikely that the Government would define "Crude Palm Oil (Edible Grade) and prescribe the Standard thereof under the Preve....
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.... petition 3). The unit of the petitioner is capable of bringing down the Acid value from 15% to less than 0.5% as will be evident from the Certificate of Plant manufacturer (at page 45 of the Petition). In the preamble of the Food Safety and Standards Act, 2006 it is admitted by the Central Government that the standard prescribed, under the different food laws are creating confusion and that the standards are often rigid and non-responsive to scientific advancements and modernization, which is detrimental to the growth of the nascent food processing industry and is not conducive to effect fixation of food standards and their enforcement. (Copy enclosed Annexure 2 page nos. 40 to 41 of the written notes). The Food Safety and Standard Act, 2006 has been enacted to consolidate all laws on food and to repeal, inter alia. The Prevention of Food Adulteration Act 1954 as also the Solvent Extracted Oil, De Oiled Meal, and Edible Flour (Control) order, 1967. No standard of any edible oil or crude oil has yet been laid down under the FSS Act, 2006 as yet. There is no standard of Crude Palm Oil laid down in any of the Food Laws of the land. Provisions made under Section 30 of the Foo....
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.... as a food but as crude palm oil for further purification to make it in conformity with the standard of edible oil as provided under the PFA Act and the Rules framed thereunder. 8. Mr. Bharadwaj, the learned counsel appearing on behalf of the Customs Authority, has, on the other hand, opposed the aforesaid contentions of Mr. Banerjee and has supported the order passed by the Customs Authority and the learned Single Judge. 9. According to Mr. Bharadwaj, the appellant had imported crude palm oil of edible grade and filed the bill of entry as prescribed under Section 46 of the Customs Act, 1962 before the proper officer for clearance of goods for home consumption as prescribed under Section 47 of the said Act. The description of the goods as per bill of entry dated 23rd December, 2010 (page 85 of the application) is as follows - Tariff Item No. "15111000 CRUDE PALM OIL (EDIBLE GRADE) IN BULK (CAROTENE CONTENTS 250 - 2500) ACID VALUE 4 - 10". 10 Mr. Bharadwaj points out that according to Chapter 13 of Section III of the Customs Tariff Act, 1975, the rate of duty of crude palm oil (edible grade) is as follows : (a) Butyro-refractometer reading at 50°C....
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....d that the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer shall make an order permitting clearance of the goods for home consumption. Therefore, according to Mr. Bharadwaj, if the proper officer finds that the goods are prohibited goods he will not refer the matter to the assessing officer to initiate the proceeding for assessment of the imported goods. 15. Mr. Bharadwaj, in this connection, refers to the provisions contained in Section 2(33) of the Customs Act defining "prohibited goods" to mean any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with and according to Mr. Bharadwaj, the goods in question clearly come within that prohibition. 16. Mr. Bharadwaj, in this connection also refers to the provisions contained in Section 11A(a) of the Customs Act according to which "illegal import" means the import of any goods in contravention of t....
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....etable oil conforms to the standard as prescribed under the Prevention of Food Adulteration Rules, 1955 and consequently, the authorized officer followed the rules and standards as prescribed under the Prevention of Food Adulteration Rules, 1955, as no rules and standards has been formulated yet under the Food Safety and Standards Act, 2006. 18. In this connection, Mr. Bharadwaj strongly relies upon Rule 5 of the Prevention of Food Adulteration Rules which is quoted below : "Rule 5. Standards of quality of the various articles of food specified in Appendices B, C and D to these rules are as defined in those Appendices. Appendix B A.17.15 - Refined Vegetable oil means any vegetable oil which is obtained by expression or solvent extraction of vegetable oil bearing materials, deacidified with alkali and/or physical refining and/or by miscellane refining using permitted food grade solvents followed by bleaching with absorbent earth and/or carbon and deodourised with steam. No other chemical agent shall be used. The name of the vegetable oil from which the refined oil has been manufactured shall be clearly specified on the label of the container. In addition to the unde....
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.... (at page no. 109 of the application,) stating that "It is to inform to you that the Crude palm Oil sample collected on 4-1-2011 by the official of the Authorized Officer, (Haldia Sea Port) from the import consignment vide Bill of Entry Number - 2471693 dated 23-12-2010 is found failed to conform the PFA specification due to High Acid Value (10.96 against the maximum permissible limit of 10.00). This is based on the laboratory received from the authorized laboratory concerned". 20. Mr. Bharadwaj submits that as the certificate issued by the authorized officer showed that palm oil edible grade does not conform to the standard prescribed under Prevention of Food Adulteration Rules, the crude palm oil (edible grade) becomes prohibited goods under the Customs Act and cannot be cleared by the proper officer under Section 47 of the said Act. Mr. Bharadwaj points out that by his letter dated 15th January, 2011, the importer requested the authorized officer for retesting the sample and as the Central Food Laboratory, Kolkata being the appellate authority, the second test was done from the Central Food Laboratory, Kolkata and this time also, the sample was found to be not in conform....
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....Customs Tariff Act if the description of the said item conforms to the description as specified in the chart provided with the General Exemption No. 122 under the heading Description of Goods - Sl. No. Chapter or Heading No. or sub-heading No. Description of goods Stand-ard rate Addi-tional duty rate Condi-tion No. 29. 15 Edible oils falling under headings 15 08, 15 12, 15 13, 15 14, 15 15 or sub-heading 1511 10 85% - - 30. 15 II. The following goods, of edible grade namely,- (A) Crude palm oil falling under heading 151 1, having an acid value of 4 or more and total carotenoid (as beta carotene) in the range of 250 mg/kg. to 2500 mg/kg., in loose or bulk form for manufacture of refined oil, refined palmolein, vanaspati, bakery shortening or inter-esterified fats NIL - 5 24. Thus, Mr. Bharadwaj submits, to avail of the benefit of exception under Customs Tariff Act, the importer/manufacturer has to fulfil two conditions. The Crude palm oil falling under heading 1511, having an acid value of 4 or more and total carotenoid (as beta carotene) in the range of 250 mg/kg. to 2500 mg/kg., in loose or bulk form for....
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....sp;However, according to Mr. Bharadwaj, the assessing officer could not initiate the assessment proceedings and could not look into this report as the proper officer failed to direct him to initiate assessment proceedings as the no objection certificate to be issued by the authorized officer under the Food Safety and Standards Act was not in his hand and till the proper officer was satisfied that the goods were not prohibited goods, he could not direct the assessing officer to initiate assessment proceedings. Circular No. 58/2001, dated 25-10-2001 and Circular 28/2006-Cus., dated 6th November, 2006 provide guidelines for examination, testing and clearance of food items prior to Customs clearances and those Circulars provide that all the consignments of edible/food products which fail PHO testing shall be re-exported or destroyed. 28. Mr. Bharadwaj submits that in this case, the proper officer of customs after considering the Customs Act, 1962, the Customs Tariff Act, 1975 and the Food Safety and Standards Act, 2006 relevant rules and circulars together, and has come to a conclusion that importation of crude palm oil (edible grade) is bad as the said goods is a prohibited go....
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....- Tariff Item No. "15111000 CRUDE PALM OIL (EDIBLE GRADE) IN BULK (CAROTENE CONTENTS 250 - 2500) ACID VALUE 4 - 10". 34. As pointed out by the Supreme Court in the case of Union of India and another v. V.M. Salgaoncar and Bros. (P) Ltd., reported in AIR 1998 SC 1367 = 1998 (99) E.L.T. 3, the word "consumption" may involve in the narrow sense using the article to such an extent as to reach the stage of its non-existence. But the word "consumption" in fiscal law need not be confined to such a narrow meaning. It has a wider meaning in which any sort of utilization of the commodity would as well amount to consumption of the article, albeit that article retaining its identity even after its use. In the context in which the expression "home consumption" is used in S. 46 of the Customs Act it does not warrant a construction that the commodity should have been completely used up. Even putting the commodity to any type of utility within the territory of India will tantamount to "home consumption". Thus, if the intention of the appellant is to use the crude palm oil as refined vegetable oil after further refining the same, the declaration in the bill of entry for home consumption did....
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....tured shall be clearly specified on the label of the container. In addition to the under-mentioned standards to which refined vegetable oils shall conform to the standards prescribed in these rules for the specified edible oils shall also apply except for acid value which shall not be more than 0.5. Moisture shall not exceed 0.10 per cent by weight. A.17.19 - Palm oil means the oil obtained from fleshy mesocarp of fruits of the oil palm (Elaeis Guineensis) tree by the method of expression or solvent extraction. It shall be clear, free from rancidity, suspended or other foreign matter, separated water, added colouring or flavouring substances or mineral oil. It shall conform to the following standards, namely: (a) Butyro-refractometer reading at 50°C 35.5 - 44.0 OR   Refractive Index at 50°C 1.4491 - 1.4552 (b) Melting point (capillary slip method) Not more than 37°C (c) Iodine value (Wijs method) 45 - 46 (d) Saponification value 195 - 205 (e) Unsaponifiable matter Not more than 1.2 per cent (f) Acid value Not more than 10.0 Indigenously produced Raw Palm Oil obtained by ....
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....as the same imported as a food within the meaning of the Act of 2006. The Appendix B to the Prevention of Foods Adulteration Rules, 1955 quoted above itself permits import of palm oil having more than 0.5% acid contents but puts restriction for further purification if intended to be used as vegetable edible oil, an item of food within the meaning of the Act of 2006. If we accept the contention of Mr. Bharadwaj that import of crude palm oil having more than 0.5% acid contents make it a prohibited goods, the aforesaid observations in the Appendix B of the Prevention of Food Adulteration Rules becomes redundant. 41. Even if we look at the definition of food contained in Section 3(j) of the Act of 2006, the declaration in the bill of entry did not claim it to be a food within the meaning of the said Act. The definition is quoted below : "(j) "food" means any substance, whether processed, partially processed or unprocessed, which is intended for human consumption and includes primary food to the extent defined in clause (zk), genetically modified or engineered food or food containing such ingredients, infant food, packaged drinking water, alcoholic drink, chewing gum, an....
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....declared the item as one intended for immediate use for human consumption in the same form and the same is on examination found to be not in conformity with the guidelines given in the Act of 2006. 46. In the case of International Airport Authority (supra), relied upon by Mr. Bharadwaj, the Customs Department had issued detention certificate and informed International Airport Authority of India ("IAAI") and Central Warehousing Corporation ("CWC") that no demurrage might be charged for the period during which the goods were in custody of IAAI or the CWC due to pendency of adjudication proceedings. But the IAAI or the CWC instead of treating entire period as free period granted rebate and calculated demurrage in accordance with the Rate Schedule framed by them. The amount of demurrage in each case came to be two or three times more than the value of the goods, and therefore, the respondents approached the High Court by way of writ-petitions under Article 226 of the Constitution of India. The petitions were allowed and it was held that the IAAI or the CWC being custodian of the Customs Department could not ignore the detention certificate, therefore, no demurrage could be char....