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Britannia Industries Ltd Versus Commissioner of Customs (Export) Mumbai

2016 (11) TMI 848 - CESTAT MUMBAI

Benefit of exemption notification no. 26/03-Cus dated 1st March 2003 - caroteniod content in the imported ‘crude palm oil’ - benefit of concessional rate of duty in terms of sl. no. 34. of customs notification no. 26/03-Cus dated 1st March 2003 - Held that: - ‘Crude palm oil’ does not find ready use and must be subject to an eponymous process of refining, bleaching and deodorizing as a pre-requirement. This process also eliminates the carotenoid presence in the crude oil. It would appear that th .....

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the process of refining, bleaching and deoderizing after import is unavoidable. To the extent that there is no evidence that appellant did not have to carry out the refining process before using it in the manufacture of their baked products, we see no reason for denial of the concessional rate of duty - Benefit of doubt is accorded to the test results at load port owing to lack of credibility attributable to the report of the Customs laboratory and, accepting that the imports were of ‘crude pal .....

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007/MCH/AC/EP/06-07 dated 8th June 2007. Appellant had filed bills of entry no. 20, 22, 23 and 24 dated 5th May 2004 at Mumbai Customs House for clearance of 983.295 metric tons of crude palm oil (edible grade) and, classifying them under heading 15111000 of the First Schedule of the Customs Tariff Act, 1975, claimed the benefit of concessional rate of duty in terms of sl. no. 34. of customs notification no. 26/03-Cus dated 1st March 2003. The said concession is available for 'crude palm oil .....

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report no. 180104-VII dated 6th May 2004, certified the cartenoid content to be 393.3 mg/kg. Consequently, a less charge demand for recovery of ₹ 43,90,845/- was confirmed along with interest thereon vide order dated 6th September 2006. On appeal, the impugned order upheld the decision of the lower authority and, hence, this proceedings. 3. Before the first appellate authority, M/s Britannia Industries Ltd had cited the amending notification no. 7/2005-Cus dated 4th February 2005 which, h .....

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ent, which is a dispute of fact, the appellant questions the manner in which the sample was drawn by customs authorities, the nature of the container in which it was stored and the validation of test conducted thereon. Their request for cross-examination of the officer who drew the sample having been rejected and that for cross-examination of the testing official having been made conditional upon submission of questionnaire, it is the claim of the appellant that the decision was handed down with .....

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ring in the original notification was corrected by a subsequent amendment, the conditions in the original notification, despite being impossible to fulfill, cannot be deviated from. On the propriety of the procedure for drawal and testing of samples, it was held that the lapse of time between shipment and testing was not of such magnitude as to lend credibility to claim of the appellant that reduction of the caroteniod content is a natural phenomenon. The failure of the appellant to take advanta .....

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ing the carotenoid content to be 503 mg/kg and claimed that the test report relied upon by the lower authorities lacks credibility as the samples were not drawn in the presence of the appellant. Casting doubts on compliance with the protocol for testing, it was claimed that denial of cross-examination, and imposition of conditions for subjecting the testing official to cross-examination, indicates the patent unreliability of the test report of the Customs laboratory. He drew attention to the dec .....

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oner of Customs (Prev), Jamnagar [2006 (206) ELT 827 (Tri-Mumbai)]. 6. Learned Authorized Representative reiterated the contents of the order-in-original and order-in-appeal. He relies on the decision of the Tribunal in Oswal Petrochemicals Ltd v. Commissioner of Central Excise, Mumbai [2010 (259) ELT 573 (Tri-Mumbai)]. 7. Having heard both sides and perused the various documents, we find that the determinant in this dispute is a factual one, i.e. the caroteniod content in the imported crude pal .....

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strict construction, merely reiterate the prescription of 500 mg/kg as the minimum. Unfortunately, on this aspect there is no reliable evidence that we can rely upon. The appellant did claim the benefit of notification no. 26/03-Cus dated 1st March 2003 and the assessment was rendered provisional by the proper officer after drawing samples. The responsibility for compliance with the statutory norms of testing rests with the proper officer of Customs and it is for the assessing authority to overc .....

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nefit of exemption notification. Had the importer been placed on notice promptly about the outcome of the test, challenges to establish the credibility of the test, including re-test, was possible. This failure was compounded by the impropriety of disallowing cross-examination to ascertain adherence to the protocols that are essential to the validation of the test report which has been laid down in re Ruchi Soya Industries Ltd. It would appear to us that such an exercise after this lapse of time .....

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al, would meet the norms prescribed for concessional rate of duty. We find nothing on record to controvert that result. And the sole challenge to that can only have been a credible test result from the Deputy Chief Chemist which is now not in the realm of the possible. It is well for Revenue to argue that there can be nothing less than a strict application of the conditions and prescriptions of an exemption notification and we should, normally, concur. Nevertheless, we find ourselves unable to d .....

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