AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 133
X X X X Extracts X X X X
X X X X Extracts X X X X
....er passed by the Commissioner wherein it has observed that the Ld. Commissioner has erred in not passing the order in respect of rest of the amount of Rs. 2, 39, 24,826/-. 1.1. The Respondent has filed Cross Objection wherein they have contested the demands confirmed in the impugned order by denying the benefit of exemption notification 21/2002. 1.2. As the appeal filed by the Revenue and the issues raised by the Respondent in the Cross Objection has arisen from the same Order-inOriginal, both are taken up together for decision by a common order. 2. Briefly stated facts of the case are that M/s. Ashian Oils Pvt. Ltd., 545/2, National Highway, PO & Vill- Galsi, Burdwan- 713406 (the Respondent herein) has imported "Crude Rice Bran Oil" (hereinafter referred to as 'the said goods') from Bangladesh through Hilli LCS under the Bills of Entry (as Annexed to the Show Cause Notice). The Respondent availed the exemption of duty of Customs (BCD) under erstwhile Notification No. 21/2002-Cus date. 01.03.2002, 42/2008-Cus date 01.04.2008 (sl. No. 33A) and 12/2012-Cus date 17.03.2012 (sl. No. 57) as amended. The Respondent has classified the said goods under the Chapter Heading ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 46 (4) of the Customs Act, 1962 mandates the importer to make and subscribe to a declaration regarding truthfulness of the contents of the filed bills of entry but discrepancy in the tariff heading and other suppression of facts points out that the importer had not been fully truthful and honest. It is only during further scrutiny of the import documents, the short levy of duty was detected. (d) Had the importer requested the proper officer to assess the bill of entries provisionally, it would have been in Section 18 (1) (a) of the Customs Act 1962 but it is not the case. The Bills of Entry (under Annexure B of the instant SCN) had been assessed provisionally as per Section 18 (1) (b) of the Customs Act 1962 because the proper officer deemed it necessary to subject the imported goods to chemical test. It also shows that the importer had no intention to assess the bills of entry provisionally. Had the department not conducted the sample testing, the percentage content of acid value exceeding 20 would have gone unnoticed and consequently the evasion of duty would have escaped. Doing provisional assessment and its finalisation by the Department does not change the nature of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on M/s. Ashian Oils Pvt. Ltd. Revenue has also prayed for passing appropriate order in respect of rest of the amount of Rs. 2, 39, 24,826/-. 4. The Respondent has filed Cross Objections and the points raised by them in the Cross objection are summarized below: (a) Bills of Entry as listed Annexure-B to the SCN were assessed provisionally under Section 18(1)(b) of the Customs Act, 1962, and samples were drawn for testing. After receipt of the Chemical test report, the Bills of Entry were assessed finally and no duty was assessed and recoverable from the importer. After final assessment, department had no authority to initiate recovery proceedings except by reviewing the final assessment order. (b) The crude rice bran oil imported by them from Bangladesh was of edible grade as per Supplementary Note -1 of chapter 15 of the Customs Tariff Act, 1975. (c) The reports of the samples received from the Custom House Laboratory, Kolkata only assigned the value of Acid percentage and conforms to the characteristics of rice bran as per IS 3448 1965 which made it abundantly clear that the imported crude rice bran oil in question was undoubtedly of 'edible ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. 42/2008-Cus. dated 01.03.2008] 57. 1508, 1509, 1510, 1512, 1513, 1514, or 1515 All goods, crude and edible grade Nil - - [Notification No. 12/2012 dated 17.03.2012 - replacing Notification No. 21/2002-Cus. ibid.] 6.2. A perusal of the above two entries in the exemption Notification No. 21/2002-Cus. dated 01.03.2002 clearly indicates that "crude oil of edible grade imported for the purpose of refining and make it edible are eligible for the benefit of the exemption provided under the said Notification. We observe that that there is no dispute in this case that after refining the goods imported were used for edible purpose only. Thus, we observe that the crude oil imported for the purpose of refining and marketing as edible oil are eligible for the benefit of the exemption provided under the Notification No. 21/2002-Cus., as amended. 6.3. In the impugned order, it has been held that the acid content of the crude oil imported is above 16% in respect of seven bills of entry and hence the imported crude oil cannot be considered as of 'edible grade'. We observe that nowhere in the Notification 21/2002-Cus. dated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of Notification No. 8/95-Cus., dated 2-3-1995, and Sr. No. 7 to Notifications No. 36/96-Cus., dated 23-71996. 2. A doubt has arisen regarding scope of the term 'Vegetable oils of edible grade' appearing in the said notification i.e. as to whether this term will cover only those vegetable oils which are fit for human consumption as it is imported or it will also include the vegetable oils which are not fit for human consumption at the time of import but will be fit for human consumption after further processing. 3. The matter has since been examined in consultation with the Ministry of Food, Department of Food, Directorate of Vanaspati, Vegetable Oils and Fats, Ministry of Civil Supplies, Consumers Affairs and Public Distribution and Department of Economic Affairs. It is clarified that the term 'vegetable oils of edible grade' will cover vegetable oils which are fit for human consumption at the time of import as also the vegetable oils which are fit for human consumption after further processing. The benefit of duty exemption is admissible so long as the oil imported is used for edible purposes, even after refining. Pending cases of assessment may be fin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... imported crude palm oil - which showed acid values varying from 13% to 18%, has opined that the samples do not conform to the standards of edible grade palm oil prescribed under PFA rules and is not edible as such. In another case, a chemical examiner relying upon the Board's 1997 Circular, even though the sample had acid values of more than 13%, took the view that it may be considered as edible oil as after processing it could be made fit for human consumption. The discussions with the officers of Department of Food and a critical look at the Board's Circular of 1997 reveals that when the question of extending concessional rate for edible oils was examined in consultation with the Ministry of Food in 1997, for granting concessional rate for edible oils, it is the end use which was finally stressed. The definition of edible oil in "Pulses, Edible Oilseeds and Edible Oils (Storage Control) Order, 1977" also is worth noting in this regard and it says edible oil means any oil used directly or after processing for human consumption and include hydrogenated vegetable oils. 4. It may be observed that this definition does not make every crude palm oil straightway to be terme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 21/2022 as amended, if it is used for edible purpose after refining. Since there is no dispute in this case that after refining the goods imported by the Respondent were used for edible purposes, we hold that the Respondent is eligible for the benefit of the exemption as provided under Serial No.33A of the Notification 21/2002 as amended. Accordingly, we hold that the denial of exemption to the Respondent in the impugned order is legally not sustainable and hence the demand of customs duty confirmed in the impugned order is also not sustainable. 6.8. We observe that this view is supported by the decision of the Tribunal in the case of 3F industries Limited versus Commissioner of Customs reported in 304 ELT 449 (Tribunal Bangalore). The relevant paras of the said decision are reproduced below: 3. The learned authorized representative on behalf of the assessee-importer submitted that the report of the Chemical Examiner was not at all provided to the appellant even though a request was made and he draws our attention to the record of personal hearing at page No. 168 of the appeal memorandum. The Central Revenue Control Laboratory report was not at all provided to the appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Calcutta held that exemption benefit under Notification No. 21/2002 has to be allowed. The present notification is a successor notification of the earlier notification and the conditions remain the same. At this stage the learned AR submits that the fact that it has to be refined and thereafter only it should be released and after refining itself would show that at the time of importation, the oil is not of edible crude and therefore does not become eligible for exemption. We are unable to consider this submission in view of the decision of the Hon'ble High Court of Gujarat taking a view that exemption would be available under this heading. 4. In view of the above observations, we consider that the appellant is eligible for the benefit of notification and accordingly the appeal is allowed with consequential relief, if any, to the appellant. 6.9. In view of the discussions above and by relying on the Board Circulars and the decisions cited above, we hold that the goods imported by the Respondent are eligible for the benefit of Serial number 33A of the Notification 21/2002 as amended. Accordingly, we hold that the demand of differential customs duty confirmed in the im....