TaxTMI 
TaxTMI 
2018 (7) TMI 279
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....al duty in respect of 27 bills of entry on account of reclassification based on acid value and Beta Carotene content reported in the test report. The assessee was also directed to pay the duty amount under PD Bonds/PD Test Bonds vide his order dated 18.05.2012. 2. Ld. Counsel appearing on behalf of the appellants submits that the bills of entry were filed claiming concessional duty of 65% on the basis of load port analysis certificates certifying that the crude palm oil was having an acid value of 2% or more and total carotene (as beta carotene) was in the range of 500-2500 mg/kg. Ld. Counsel further submits that since department was not taking any action to finalize the provisional assessment during the last 7 years, the appellant moved a Writ Petition before the Hon'ble High Court at Calcutta and the Hon'ble High Court passed a time bound order directing the department to finalise the provisional assessments. Accordingly, a show cause notice dated 21.02.2012 was issued proposing classification of the imported CPO under Heading 1511 9090 against the claimed classification under 1511 1000 and also demanding Rs. 2,73,93,096/- on the plea that as per test reports, the goods have no....
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....fication No.21/2002-Cus (Supra) on imported 27 consignments of crude palm oil. For the purpose of availing exemption, the crude palm oil was tested and benefit extended if acid value is more than 2% and beta carotene content is less than 500-2500 mg/kg. The relevant paras of Tribunal's decision in the case of Ruchi Soya Industries Ltd. vs. Commissioner of Customs, Mangalore (Supra) are as under: "4. We have gone through the records of the case carefully. Nine samples were drawn, one from each tank and were tested by the Custom Lab, Cochin. In each sample, test report indicates the following:- "The carotene content as beta carotene in the range of 500- 2500 Mg per Kg." The Custom Lab report has not given the exact value of beta carotene in the sample. In any case, the Customs Lab report is favourable to the party. The goods were imported on 1-10- 2003 and immediately thereafter they were tested in the Custom Laboratory. The appellants stated that no reasons have been given for discarding the report of the Cochin Custom Lab. We find that the DRI has taken only one sample and sent the same to Mysore. In our view, this sample cannot be representative of entire consignment as the c....
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....received from Industries. Dear Dr. Khan, Please find enclosed the results and my comments. In my opinion the imported CPO are very old may be more than one year old from the date of production. The average values for carotenes should not be less than 600 ppm for fresh CPO. The fact that most of the samples are showing values less than 400 ppm indicate that they were stored for long time. As shown in our controls CPO shipped with 550-600 ppm carotene the maximum loss would be less than 10% when it is received at the Indian port. It is also suspected that some amount of mixing of stearin with CPO. If you need any more clarification, please contact me. With best regards, Yours sincerely, Sd/- C. Arumughan A perusal of the above letter shows that the carotene content in crude palm oil varies with time. Moreover, the learned advocate drew our attention to the decision of the Tribunal in the case of Commissioner of Customs Cuticorin v. KTP Oil Mills, 2005 (182) E.L.T. 376 (Tri-Chennai). wherein the Tribunal has held that Chemical analysis of sample three months after it is drawn could not serve any purpose. In fact, the above view is only that of Chief Chemists CRCL. In that....
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....nch in the case of Gujarat Ambuja Exports v. CC, Kandla [2011(269) ELT 239] on an identical issue of classification of import of crude palmolein, has dealt the issue in depth and discussed the Board's circular and referred to HSN Explanatory Notes and held that imported goods are classifiable under CTH 1511 10 00 and not under CTH 1511 90 90. The relevant paragraph of Tribunal's order is reproduced as under :- "4. We have considered the submissions made by both sides in detail. The competing tariff heading are as under : "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, Deodorized palm oil 1511 90 20 Refined, Bleached, Deodorized pamolein 1411 90 20 Other" 5. We also find that the Commissioner has correctly identified the issue by discussing the tariff headings as under: "There are two sub-divisions of Entry 1511. First is 1511 10 00 which covers Crude Palm Oil and second 1511 90 which covers Palm Oil other than Crude Oil. The second category has been further divided into three sub-categories. First, if the Oil is refined, bleached and deodorized, then it is to ....
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....e that of raw palm oil and not refined palm oil. 8. In view of the fact that tariff heading clearly segregates the crude oil and others between 1511 00 and 1511 90 (divided to further headings), what we have to decide is as to whether the imported palm oil in this case is crude or not. The Chemical Examiner has clearly stated that it was raw oil and he was not in a position to say whether any of the process as which according to HSN, would take the palm oil out of the description of the crude palm oil, have been carried out or not. We find considerable force in the argument advanced by the learned advocate that the imported product has to be classified under CTH 1511 10 00 only. 9. The only ground on the basis of which the Revenue has classified the Crude Palm Oil imported by them in 2003 under CTH 1511 90 90, as the circular issued by the Board on 24-9- 2003. For better appreciation, the circular is reproduced below : Circular No. 85/2003 24th September 2003 F. No. 528/21/2003-CUS(TU) Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Sub: Import of Palm Oil/Palmolein in refined/crude form - reg. I am directed to say that....
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.... specification mentioned above, it will fall under the residuary category of 'other-other', under sub-heading 1511 90 90. 10. The next issue is regarding assessment of imports which have taken place prior to 1-8-2003. It is observed that prior to 1-8-2003, the item "Crude Palm Oil/Palmolein" was neither defined in the tariff nor in any exemption notification. Keeping this in view, it has been decided that Bills of entry filed for home consumption prior to 1-8-2003 should be assessed on the basis of test reports of samples drawn by the Port Health Officer (PHO). If the reports mention the item as 'Crude palm oil/palmolein' or as 'palm oil/palmolein' which needs further processing, the report should be accepted and assessment finalized accordingly. If the test reports indicate the item as RBD palm oil/palmolein, the assessment should be finalized under sub-heading 1511 90 10. 11. However, if the test reports do not contain indications as mentioned above, the matter will have to be examined as to whether provisions of Section 28A of the Customs Act, 1962 can be invoked in this case or not based on the general practice of assessment in the past. For this, a report is being sought s....
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....ssue of circular by the Board. The notification is no doubt valid because being an exemption notification, it can restrict the exemption to a particular class of the goods, whereas the scope of tariff heading can be modified only by adding a chapter note or by changing in the tariff heading. We have to hold that the reliance of the Commissioner on the circular is misplaced and the product imported by the appellant has to be held as Crude Palm Oil only....." 7. The above decision is squarely applicable to the facts of the present case as the department chose to classify the imported goods under Chapter 1511 90 90 based on the acid value and carotenoid content as per description given under Sl. No. 34 of the Notfn. 21/2002 and as per the Board's clarification dated 24-9-2003. In consistent with the above Tribunal's decision, we are of the considered view that classification of imported goods should strictly be made as per the chapter note, section note and the description of specific sub-headings read with HSN Explanatory Notes. Main Chapter Heading 1511 covers palm oil and fractions whether or not refined but not chemically modified. Chapter 1511 10 00 covers "crude oil" and Chapt....