TMI Blog2020 (6) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... s a contradictory stand is not sustainable. The assessing officer cannot hold that the consignment meets standard as per A17.19 while deciding the importability and hold that it does not meet the same standards while deciding the eligibility of the exemption notification. It would have been a different case if the standards prescribed for the exemption notification are different from that for determining the importability but such is not the case - Revenue, having accepted that the consignments meet standards A17.19 and hence are edible and accepting their importability cannot take a stand that the consignments do not meet the same standards and are therefore not edible, while deciding the eligibility of exemption notifications. Appeal allowed - decided in favor of appellant. - Customs Appeal No. 1766, 1767 & 1783 of 2012 AND Customs Appeal No. 1777 of 2012 - FINAL ORDER No. A/30890-30893/2020 - Dated:- 12-6-2020 - HON BLE MR. ANIL CHOUDARY, MEMBER (JUDICIAL) HON BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Appearance Shri Y. Sreenivasa Reddy, Advocate for the Assessee. Shri C. Mallikarjun Reddy, Superintendent for the Revenue. [ORDER PER: P.V. SUB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) (5) (6) 34. 1511 The following goods, namely:- (A) Crude palm oil of edible grade, having an acid value of 4 or more and total carotenoid (as beta carotene) in the range of 250 mg/kg., in loose or bulk form for manufacture of refined oil, refined palmolein, vanaspati, bakery shortening or interesterified fats; 65% - 5 The aforesaid condition no. 5 is as follows: If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. Thus, the requirements with respect to these three bills of entry are that the acid value should be more than 4% and carotenoid value must be in 250 to 2500 per mg. Apparently, the importer has registered himself with the customs under the Customs (Import of Goods on Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 as required. However, in respect of both the notifications, the palm oil has to be of EDIBLE GRADE. 3. The dispute w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not have sent samples to Customs Laboratory at all for testing. Neverthless, the department sent the samples. The test reports were not given to them during the first round of litigation and only in the remand proceedings the test reports were provided to them. Evidently, according to the Customs Laboratory the imported oil is not of edible grade because the acid value exceeds 10. He would assert that the test report of the Port Health Officer must prevail over the test report by the CRCL as he has the authority as far as the testing under the Prevention of Food Adulteration act is concerned. According to the Learned Counsel, this Bench should rely upon the test report of the Port Health Officer and ignore the test report of the Customs Laboratory and give them the benefit of the exemption notification. He relies on the following case laws: 1. Commissioner Order dt.5.7.2013 in the case of Kedia Overseas Ltd., Visakhapatnam and acceptance of the order by the department 2. Cargill India Pvt Ltd., vs UOI [2013 (288) ELT 209 (Guj)] 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Rule (that tax must be paid) and hence it must be strictly considered against the assessee. He would submit that several views were taken by various Judicial fora including by the Hon ble Apex Court as to how an exemption notification should be constructed and interpreted. In view of the conflicting judgments the matter was referred to Five Member Constitutional Bench of the Supreme Court in the case of Dilip Kumar and Company Others [2018 (361) ELT 577 (SC)] and it has been held as follows: 52. To sum up, we answer the reference holding as under - 1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. 2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. 3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled. Thus the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing on the test results/ reports of the chemical Examiner which shows the acid value is more than 10. In the instant case, the Chemical Examiner s report states that the acid value of the subject imported goods is 10.8 which is more than the standard value of 10 as prescribed under A 17.19 of PFA Rules, 1955. I further find that, the subject goods failed to match the description/definition of edible grade as given in the sub-note 1 of supplementary notes to Chapter note of Chapter 15. The Chapter note is relevant for classification of the goods and their eligibility to concessional rate of duty under notification no. 21/2002- Cus, dated 1.3.2002. Hence, the impugned goods cannot be considered as Crude Palm oil of edible grade and having failed to satisfy the foremost inbuilt condition of Sl.No. 34(A) of the notification ibid. And hence, it is a settled law that the benefits of the notification will be available subject to conditions prescribed therein. Hence, the impugned goods are ineligible for the benefit of the concessional rate of duty. Accordingly, I pass the following order. 10. Thus, holding that the imported palm oil is not of edible grade, he denied the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a conflict between two reports that the benefit of doubt must go to the Revenue and this decision has, on appeal, been upheld by the Hon ble Apex Court. However, that case involved only test reports to determine the eligibility of the exemption notification. It had no other implications. 15. The present case is different inasmuch as it involves testing for the purpose of assessment. Assessment by Customs involves determining: a) Classification of the goods; b) Importability of the goods with respect to restrictions under Section 11 of the customs Act, Foreign Trade Policy as well as several other laws framed by various Ministries but enforced by the Customs officers: c) Determining whether licences, permissions, authorisations, etc., if any, required are fulfilled; d) Determining the value of the goods; e) Determining the rate of duty and exemption notifications. 16. It is possible that any consignment may match the requirements with respect to one parameter of, say, importability but not others, say, the exemption notification. Assessments in such a case have to be done accordingly. 17. In this case, there are three issues (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance or quality which it purports or is represented to be; (b) if the article contains any other substance which affects, or if the article is so processed as to affect, injuriously the nature, substance or quality thereof; (c) if any inferior or cheaper substance has been substituted wholly or in part for the article so as to affect injuriously the nature, substance or quality thereof; (d) if any constituent of the article has been wholly or in part abstracted so as to affect injuriously the nature, substance or quality thereof ; (e) if the article had been prepared, packed or kept under insanitary conditions whereby it has become contaminated or injurious to health; (f) if the article consists wholly or in part of any filthy, putrid, , rotten, decomposed or diseased animal or vegetable substance or is insect-infested or is otherwise unfit for human consumption; (g) if the article is obtained from a diseased animal; (h) if the article contains any poisonous or other ingredient which renders it injurious to health; (i) if the container of the article is composed, whether wholly or in part, of any poisonous or deleterious substance wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customs may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of customs who is subordinate to him. (3) Notwithstanding anything contained in this section, Commissioner (Appeals) shall not exercise the powers and discharge the duties conferred or imposed on an officer of customs other than those specified in Chapter XV and section 108. SECTION 110. Seizure of goods, documents and things - (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. -------- SECTION 111. Confiscation of improperly imported goods, etc. - The following goods brought from a place outside India shall be liable to confiscation: - (a)....(c) (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce between the declared value and the value thereof or five thousand rupees, whichever is the highest. 22. From the above, the legal position is evident as follows: a) If the imported food (palm oil in this case) does not meet the standards of A.17.19 it is adulterated as per the Prevention of Food Adulteration Act even if it is not injurious to health; b) Therefore, import of such oil is prohibited under Section 5 of the Prevention of Food Adulteration Act; c) All provisions of the Customs Act apply to such cases and Customs officers are empowered to Act with respect to such imported consignments under Section 6 of the Prevention of Food Adulteration Act; d) In terms of Section 111 (d) of the Customs Act, such oil is liable to be confiscated for being imported in contravention of the prohibition under Section 5 of the Prevention of Food Adulteration Act; e) Such oil can be seized under Section 110 of the Customs Act by the proper officer of Customs f) Any person concerned with such import is also liable for penalty under Section 112 of the Customs Act 23. Thus, determining the importability of the oil in question and if i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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