TaxTMI 
TaxTMI 
2026 (6) TMI 121
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....pugned order, learned Commissioner (Appeals) had set aside the assessment order passed by the original authority in denying the benefit import duty exemption on the impugned goods and allowed consequential relief to the respondent importer. 2.1 The brief facts of the case are that the respondent herein had imported various oils viz., 'Peanut (Arachis) Oil refined (edible grade)'; 'Sunflower Oil refined solvent extracted (edible grade)'; 'Walnut Oil refined (edible grade)'; 'Almond Oil refined (edible grade)'; 'Macadamia nut oil (edible grade)' by classifying it under Customs Tariff Item (CTI) 1508 9091/ 1512 1910/ 1512 9091 and 'Candelilla Wax refined in pastilles', declaring classification under CTI 2712 9090 in the Bill of Entry (B/E) No. 3448686 dated 12.05.2024. The goods were imported from M/s Gustav Heess GMBH, Germany and the respondent importer had sought clearance of goods from Customs authorities claiming customs duty exemption under Serial No. 64 and 71 of the Notification No.50/2017-Customs dated 30.06.2017. The self-assessed B/E was scrutinised by Faceless Assessment Group (FAG) at Kandla Port and they had observed that there is big difference in the value of goods,....
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....f Central Governments' litigation policy, he submitted the letter dated 02.07.2025 of the jurisdictional Commissioner stating that the disputed issue involves classification of the imported goods which is recurring in nature, and therefore they continue to pursue the appeal in the present case. 4.1 Learned Advocate appearing for the respondent submitted that the imported goods fulfil all the requisite conditions of the notification dated 30.06.2017. Out of eight items imported under B/Es No. 3448686 dated 12.05.2024 for which they had claimed the duty exemption, seven items viz., peanut oil, walnut oil, almond oil, macadamia nut oil are covered under chapter headings 1508, 1512 and sunflower oil under CTI 1512 1910, vide Sl. No. 64 and 71 of notification dated 30.06.2017. Further, the imported goods have been tested by the government approved laboratory i.e., M/s Doctors' Analytical Laboratories Private Limited, Mumbai and certified to be of confirming to 'edible grade' as per the test parameters in terms of Food Safety and Standards Authority of India (FSSAI) Regulations. These facts have been recorded in the impugned order by the learned Commissioner (Appeals). There is no fur....
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....ade' or 'other technical/industrial grade' for the purpose of determining whether customs duty exemption is available on such imported goods or not. 8.1 Before we consider the submissions made by both sides, it is important to note that the undisputed facts with the respect to the factual matrix of the case are as follows: (i) The representative samples of imported goods i.e., 'peanut oil, walnut oil, almond oil, macadamia nut oil, sunflower oil' were sent for testing to Government approved laboratory and the test reports stated that such goods conform to edible grade as per the tests performed for its composition as per FSSAI Regulations; (ii) Doctors' Analytical Laboratories Private Limited, Mumbai, at which the imported goods were sent for testing is an approved Laboratory by the FSSAI/NABL. (iii) the exporter M/s Gustav Heess GmbH, Germany had vide letter dated 29.05.2024 had stated that they have been supplying the vegetable & carrier oils and Butters through the respondent importer, who is their authorised distributor, for over a decade, and these are 'refined and edible grade' as given under their 'Certificate of Analysis. These goods are for hu....
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....eant to interpret the tariff and they cannot be applied to interpret exemption notifications. The description of the goods in any exemption notification must be interpreted as they are commonly understood. In view of this, I hold that the intent of the notification is to provide concessional rate of duty to the goods intended only for human consumption. Therefore, benefit of 'Edible grade' is not available to the imported goods. xxx xxx xxx xxx 13. To fortify my stand, I also place reliance on the decision of the Hon'ble Supreme Court in the case of Commissioner of Customs (Import) Vs. Dilip Kumar and Company.... 14. In view of the above decision of the Hon'ble Supreme Court, even if there is ambiguity in the exemption notification, it is to be resolved in favour of revenue. The expression "refined and the edible grade" in the exemption notification has to be read as that which is used for human consumption and not for industrial use. 15. Therefore, on the basis of discussions and findings, I find that the impugned goods are not eligible for benefit of Notification No.50/2017-Cus dated 30.06.2017, Sr. No.64 & 71." 8.3 Learned Commissioner (App....
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....s for these goods as well as the Test Reports issued by the Doctors' Analytical Laboratories Private Limited has confirmed that the impugned goods are refined and of edible grade, thus both the conditions have been fulfilled and therefore, since, the end-use of the goods is not a condition specified, even though these are intended for use in other than foods will be eligible for the exemption. In this regard, I place reliance on the judgement of the Hon'ble CESTAT in the case of M/s Ritika Pharmatech Vs. Commissioner of Customs, New Delhi in Customs Appeal No. 52158 of 2018, wherein the Hon'ble CESTAT has held as under:... The ratio of decision of the above case law is applicable for the impugned the case. In the instant case both the condition of classification and refined and edible grade are fulfilled. Hence, the benefit of notification is admissible for the impugned goods as claimed by the appellant." 8.4 The supplementary note to Chapter 15, reads as under "Supplementary Notes : 1. In this Chapter, "edible grade", in respect of a goods (i.e. edible oil) specified in Appendix B to the Prevention of Food Adulteration Rules, 1955, means the standard ....
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....refined and edible grade. The relevant paragraphs of the said order is extracted below: "5. A glance at the above table provides that for the consignment classification under Chapter sub-heading 1515 only condition required for getting the benefit of exemption notification is that it has to be refined and of the edible grade. Since the appellant's consignment was certainly ultra refined and of edible grade as certified by the supplier, they are fully entitled for benefit of concessional rate of basic customs duty under Notification No. 12/2012 as they met the requirement of products mentioned in S. No. 58 of the said notification. 6. Learned Advocate also has taken us through the reassessment order passed by the Learned Asstt. Commissioner which has classified the imported consignment under Chapter sub-heading 1515 90 91. The classification in the above mentioned sub-heading 1515 90 91 is for edible grade oils only. Thus, the Learned Advocate has tried to impress that even the Assessing Officer is in agreement that classification declared of the imported consignment by the appellant on the Bill of Entry that the imported consignment is of edible grade. The only gr....
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.... both 'refined and edible grade'. Accordingly, we find that impugned order-in-appeal is without any merits and same is set aside. In the result, appeal is allowed." 9.2 Further, we also find that in another case involving similar disputed issue, in respect of Inter Continental (India) (supra), the Hon'ble High Court of Gujarat have held that end use is not a condition and being contrary to the notification, the CBEC Circular is not legally sustainable. The relevant paragraphs of the said order is extracted below: "11. Section 151A of the Act provides for issuance of instructions to officers of Customs. The section requires that if the Board considers it necessary or expedient to issue any orders, instructions and directions to officers of Customs, it would be open to the Board to do so but the necessity or the expediency has to be for the purpose of uniformity in the classification of goods or with respect to the levy of duty on such goods. The said section further provides that all officers and other persons employed in execution of the Act shall observe and follow such orders, instructions and directions of the Board. The Act and the Tariff Act are a composite legisla....
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....relation to this part of the circular that these safeguards have been prescribed so as to uniformly assess persons importing oils for industrial use only and to prevent misuse of imported oils being used for edible purpose after processing, on payment of concessional rate of duty. According to him, in case of a trader, if the goods are sold to 'A' and further 'A' sells those goods to 'B', 'B' to 'C', 'C' to 'D' and so on, the importer-trader shall have to produce the end-use certificate from the last such purchaser in the chain and the certificate shall have to be from the Assistant/Deputy Commissioner of Central Excise having jurisdiction over last such purchaser. It is beyond our comprehension as to how can a trader be expected to follow the goods which he has already sold off and which might change hands in series of transactions. To expect such an importer-trader to produce a certificate of end-use from an officer of Central Excise, having jurisdiction over the purchaser who is the last in the chain of transaction is casting a burden which if not impossible is impracticable to say the least. At least, such a requirement/condition cannot be read in Notification No. 17 by virtue ....
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....r cancel the bonds executed by the petitioners and release the bank guarantees furnished by the petitioners at the time of provisional release of the said goods." 10. On being dissatisfied with the aforesaid order, the department had filed Civil Appeal No.6529 of 2002 before the Hon'ble Supreme Court, and while disposing the case it was held that a new condition to the notification cannot restrict the scope of the exemption already provided in the notification in order to whittle it down. Therefore, the Hon'ble Supreme Court dismissed the appeal filed by the department, by upholding the order of the Hon'ble High Court vide its judgement dated 23.04.2008. 11. In view of the foregoing discussions and analysis, we are of the considered view that the impugned order dated 31.07.2024 is proper and legal and requires no interference insofar it has extended the customs duty exemption under Sl. No. 64 and 71 of Notification No.50/2017-Customs dated 30.06.2017 to the goods imported by the respondent importer, as discussed in detail vide preceding paragraphs 8.1 to 8.4 of this order. 12. In the result, the appeal filed by the Revenue is dismissed. (Order pronounced in the open cou....