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M/s Liberty Oil Mills Ltd. Versus Commissioner of Customs (Import) , Mumbai

2015 (9) TMI 713 - CESTAT MUMBAI

Import of Crude Palm Oil - Benefit of Exemption notification-21/2002-Cus Drawing and testing of sample Appellant, to claim benefit of exemption notification no. 21/2002-Cus, produced test-report of load port issued by internationally acclaimed independent test laboratory Revenue also drew samples in presence of representative from appellant company and found that as per report of private test agency, carotenoid content was above 500 mg/kg, whereas Dy. Chief Chemist found carotenoid content .....

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elay in testing, ranging from 25 days to 82 days, placing reliance on technical literature referred to hereinabove, which provides that carotene is unstable characteristic, which changes with exposure to light, air and atmosphere Therefore, appellants have fulfilled condition of Notification No. 21/2002 (as amended) and they are accordingly entitled to exemption Appeals allowed in favour of importer-assessee Decided in favour of Assesse. - Appeal No. C/343 & 344/10, C/85205-85207, 85530 & .....

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No. Order-in-Appeal No. & Date Passed by 1. C/343 & 344/ 10 18 & 19/2010/MCH/AC/ Gr.I/2010 dated 11.1.2010 Commissioner of Customs (Appeals), Mumbai-I 2. C/85530 & 85531/13 762 & 763/Gr.I/2012 (JNCH)/ IMP-628 & 629 dated 27.12.2010 Commissioner of Customs (Appeals), Mumbai-II 3. C/855205 to 855207/13 864 to 866/MCH/AC/Gr.VIIA/ 2012 dated 15.10.2012 Commissioner of Customs (Appeals), Mumbai-I 2. The issue involved in the present appeals is whether the appellants are eligi .....

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ding 15111000 of the Schedule to the Customs Tariff Act, which the appellant imports. Sometime in May, 2004, consignments of CPO was imported by the appellant vide various Bills of Entry for clearance of the said goods, under claim for exemption in terms of Entry No. 34 in the Table annexed to Notification No. 21/2002 as amended by Notification No. 120/2003. The said entry 34 in the exemption notification is reproduced hereunder for ready reference: - Chapter Description of goods Sta. Rate Addl. .....

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solid particles only mechanical force, such as gravity, pressure or centrifugal force, has been employed, excluding any adsorption filtering process, fractionalization or any other physical or chemical process. If obtained by extraction an oil shall continue to be considered as crude, provided it has undergone no change in colour, odour or taste when compared with corresponding oil obtained by pressure; 65% 2.1 To claim the benefit of exemption notification, the appellant produced test-report o .....

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und the carotenoid content to be lower than 500mg/kg. Hence, exemption was denied. 2.2The appellant preferred appeal before the Commissioner (Appeals) but to no avail and is now before this Tribunal. This Tribunal vide its earlier order dated 23.2.2007, in the earlier round of litigation in the same matter, had remanded the matter back to the adjudicating authority with a direction that he should allow the cross-examination of the Dy. Chief Chemical Examiner and thereafter give an opportunity of .....

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note the date of drawl of samples and date of test as well as the method of drawl of sample and storage of the sample. However, the Commissioner (Appeals) rejected the appeals of the appellant in the second round of litigation giving rise to the present appeals. 3. The learned Counsel for the appellant, among others, urged that the Commissioner (Appeals) has erred in holding that the purpose for having set the standard of 500 mg/kg limit for carotenoid in the said Notification is so that the co .....

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Commissioner (Appeals) has failed to go by the evidence on record and based his findings on his personal opinion, therefore, the findings are perverse. Further, other extraneous premises considered by which went to the Commissioner (Appeals) are evident in his observation - that the temperature in Mumbai have never been so high as to effect the volatile nature of carotenoid. The Commissioner (Appeals) has gone to the extent of observing and declaring that the high humidity in Mumbai is likely to .....

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notice of facts on record, being the cross-examination of the Dy. Chief Chemical Examiner, who has admitted and candidly stated that not only is carotenoid not volatile, but is also not sensitive to light and does not deteriorate under normal conditions. The Commissioner (Appeals) further erred in holding that report of the Dy. Chief Chemist, who did not even know of any prescribed method existing, to draw samples for testing, has more credibility than the detailed report of the Geo-Chem labs, .....

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ls) has erred in not considering the ruling in the case of Ruchi Soya Industries Vs. Commissioner of Customs (Prev.) 2006 (206) ELT 827, which is a final order of the Tribunal and relied upon by the assessee. In the case of Ruchi Soya, this Tribunal has held that beta carotene level does not remain the same and with lapse of time and temperature variation, there is a deterioration of beta carotene content. It was also observed by this Tribunal in the Ruchi Soya case that scientific findings give .....

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titution, the condition regarding carotene value would relate back to the date of parent/main notification i.e. Notification No. 21/2002 dated 1.3.2002. As the requirement was modified by way of substitution and/or clarification, under the rules of interpretation, it always relates back to the date of introduction of condition as to the minimum carotene content. In any view of the matter, even if the report of the Dy. Chief Chemist is taken correct for the argument sake, then also the result has .....

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covered by the clarificatory amendment to the exemption Notification in question, as the carotene value was always found above 250 mg/kg by the Govt. Laboratory. Further the goods in question were cleared for home consumption, in accordance with law. 3.3 The learned Sr. Counsel for the appellant also relies on the ruling of the Hon'ble Supreme Court in the case of Govt. of India Vs. Indian Tobacco Association - 2005 (187) ELT 162 (SC), wherein it was held that when the word substitution is u .....

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mean thereby that the substitution have occurred from beginning when the original notification was issued, on 1.3.2002. 3.4 The appellant further draws our attention that the notification of 2005, substituting the Entry 34, nowhere specified that the new condition and/or the substituted condition was not applicable retrospectively, and accordingly, the appellant is entitled to the benefit of the notification. 3.5 It is further urged that all the six test reports, which were issued by Mr. Nitin .....

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rong apparatus for the test i.e. Levi Bond and Tintometer instead of Spectro Photometer as required under BS: 684. 3.6 The contention is further raised that the proviso of Section 164 of the Customs Act which deals with power of drawing samples, which empowers the proper officer while the goods are present in the customs area, to take sample of the said goods in presence of the owner for examination and testing, or for obtaining the report or for any other purpose under the Act. Thus, the proper .....

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f drawing of sample, does not waive the requirement of prescribed standard for drawing of the sample and its storage. 3.7 The appellant further relies on the ruling of the Tribunal in the case of Adani Exports Ltd. Vs. CC 2010 (249) ELT 93 (Tri-Ahmd), wherein it has been held that if the sample is not drawn correctly, the test report is not reliable. In view of the glaring evidence on record that the samples were not drawn in accordance with the IS standards which have also been confirmed by the .....

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pellant had imported the CPO for home consumption in bulk quantity, which was loaded in different tanks in the ship and therefore, sample is required to be drawn from each and every tank and then mixed to arrive at the sample, which was then required to be properly stored and tested as per the prescribed standard. It have further come out in the cross-examination of the Chemist that he was not aware of any prescribed standard for the drawl of sample and that the sample was received for testing i .....

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ene during storage. Further, four test reports out of six are also unreliable for the defective method in test as the Chemist has used the Tintometer instead of Spectrophotometer. Tintometer is used for determination of colours by comparison with levibond glasses of known colour characteristics as explained in para 13 of the IS:518 (Part-I), 1964, whereas Spectrophotometer is used for testing the basic characteristics (carotene content) in oil as illustrated in BS:864, para 5. 3.10 The reference .....

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Customs House, Mumbai relying on which, the lower authorities have drawn erroneous conclusion and further urges that this Tribunal may be pleased to hold that the substitution in the original notification in the year 2005 substitutes the condition with retrospective effect from the date of the original notification and accordingly, the requirement of minimum carotene content value is reduced from 500mg/kg to 250 mg/kg and accordingly, the appellant fulfilled the condition as laid down in the ex .....

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intention appears, such amendment etc., shall not (a) revive anything not in force or existing at the time at which the amendment, repeal, supersession or rescinding takes effect; or (b) affect the previous operation of any rule, regulation, notification or order so amended, repealed, superseded or rescinded or anything duly done or suffered thereunder or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any rule, regulation, notification or order so a .....

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continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the rule, regulation, notification or order, as the case may be, had not been amended, repealed, superseded or rescinded. 4.1 It is further submitted that ruling in the case of Indian Tobacco Association (supra) of the Hon'ble Supreme Court is not applicable. Further, in the said ruling, the Hon'ble Apex Court has held that Foreign Trade Policy is applicable when there is no equivalent law like Sec .....

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dismissed. 4.2 As to the import consignments in the question were imported prior to the substitution made on 4.2.2005, vide Notification No. 7/2005, the provisions are applicable prior to 4.2.2005 will be applicable and the substitution will not have the retrospective effect. Further, as the appellants representative, who was present at the time of drawing the sample did not object, the appellant can later on not be permitted to raise objection of drawing samples or its storage in spite of the f .....

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ntions that the test reports are valid. 5. Having considered the rival contentions and on perusal of the records, we find that the sole ground for denying the exemption is the test report of the Dy. Chief Chemist. For appreciating the test report, the undisputed premises are: - (i) IS:548 (Part-I)-1964 is the relevant standard for drawing of samples in the case of CPO. (ii) The standard is prescribed for drawing of samples and also storage. (iii) British standard: 684, methods for analysis requi .....

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