TMI Blog2022 (2) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... s reason, undisputedly, the oil imported by the appellant was described as Crude Palmolein oil (edible grade) which is evidently edible oil and not one which is fit only for industrial or other uses. The fact that it needs to be refined being consumed makes no difference and it is still edible such as rice and wheat are edible. It is now a well established legal principle that the Chapter Notes, Section Notes and Rules of Interpretation of the Customs Tariff are meant 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. Of course, if the exemption notification indicates both the Description of goods and the Customs Tariff heading, it needs to be decided if the goods fall under the Customs Tariff heading for which purpose, the Chapter Notes, Section Notes and Rules of Interpretation must be applied. The description of the goods must be taken as are commonly understood. In this case, the documents show that the imported goods were understood to be of edible grade. After assessing the Bill of Entry, a Show Cause Notice demanding du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant was eligible to the benefit of exemption only to the extent of 50% by availing the benefit of DEPB and the remaining 50% had to be paid in cash and confirmed the demand accordingly. This decision was, on appeal, upheld by the Commissioner (Appeals) by the impugned order Order-in-Appeal No. 16/2009 (V-II) Cus DATED 12.08.2009, which is the subject matter of Appeal No. C/622/2009. 2. Similarly, another consignment of 497.586 MT of crude palmolein oil of edible grade was imported by the appellant and warehoused through a Bill of Entry dated 7.12.2007. The appellant filed ex-bond Bill of Entry dated 11.02.2008 to clear 470.264 MT of crude palmolein oil (edible grade), of which half (235.132) was proposed to be cleared on payment of duty in cash and the remaining half claiming the benefit of notification no.89/2005 using the DEPB credit. The original authority passed an order allowing benefit to the extent of only 50% under notification no. 89/2005, which decision was upheld by the Commissioner (Appeals) by Order-in-Appeal No. 17/2009 (V-II) Cus DATED 12.08.2009 which is the subject matter of Appeal No. C/623/2009. 3. The issue in both cases is, thus, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Foreign Trade Policy means Foreign Trade Policy 2004-2009 published in the notification of the Government of India in the Ministry of Commerce and Industry vide No.1/2004, dated the 31 st August, 2004 as amended from time to time; (ii) Licensing Authority means the Director General of Foreign Trade appointed under Section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorized by him to grant a licence under the said Act; (iii) applied rate of duty means the standard rate of duty specified in the First Schedule to the said Customs Tariff Act with respect to the goods specified in column (2) of the said Table, read with any other notification (for the time being in force) issued in respect of such goods under sub-section (1) of section 25 of the said Customs Act; (iv) applied rate of additional duty means the additional duty leviable under section 3 of the said Customs Tariff Act with respect to the goods specified in column (2) of said Table, read with any other notification (for the time being in force) issued in respect of such goods under sub-section (1) of section 25 of the said Customs Act. (F.NO.605/128/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on notification should go in favour of the Revenue and against the appellant. c) As far as half of the quantity cleared on payment of duty in the same Ex-bond Bill of Entry is concerned, it has attained finality and it is not a subject matter of the show cause notice, the order of the original authority or the impugned order. This cannot be reopened and the entire quantity cleared under the same ex-bond Bill of Entry be considered as one lot and the benefit of exemption extended to the entire quantity. 8. We have considered these submissions. The appellant submits that Crude Palm Oil (edible grade) is not edible oil because it is not fit to be consumed. Edible must be something which is fit to be consumed. We find it difficult to accept this submission because it would mean edible whose plain meaning is fit to be eaten or consumed should be read as fit to be eaten or consumed as such . If this argument is accepted, vast majority of things which are edible will become inedible. Edible oils will be an oxymoron because, with few exceptions (such as olive oil), oils cannot be consumed as such but must be cooked with other things such as, vegetables. Rice and wheat are not ed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (FSSAI Act) defines food as follows: Section 3. Definitions (j) Food means any substance, whether processed, partially processed or unprocessed, which is intended for human consumption and includes primary food to the extent defined in clause (zk), genetically modified or engineered food or food containing such ingredients, infant food, packaged drinking water, alcoholic drink, chewing gum , and any substance, including water used into the food during its manufacture, preparation or treatment but does not include any animal feed, live animals unless they are prepared or processed for placing on the market for human consumption, plants, prior to harvesting, drugs and medicinal products, cosmetics, narcotic or psychotropic substances: 12. Thus, the term food includes water, alcoholic drinks and chewing gum, none of which are commonly known as food. If an exemption notification, for instance covers food, the above definition under FSSAI Act cannot be applied to extend it to chewing gum, etc. The description of goods in any exemption notification must be understood as they are commonly understood. 13. The argument of the appellant what they have not paid in cash ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by issuing a notice under section 28 of the Customs Act. Thus, the appellant would be entitled to get benefit of the exemption notification for the entire quantity of the goods imported in the Ex- bond Bills of Entry which are the subject matter of these two appeals. As half the duty has already been paid in cash and debit in respect of the remaining half has already been made in the DEPB account, the demand of duty and interest cannot be sustained. 16. We answer the questions formulated in paragraph 4 above as follows: (i) The Crude Palmolein Oil (edible grade) is edible oil as per the notification. (ii) The appellant is eligible for exemption to the extent of 50% under the notification. (iii) As the assessed Bill of Entry has been reopened by the Revenue by issuing a notice under Section 28 of the Customs Act, the appellant s prayer to treat the entire quantity of goods cleared through this Bill of Entry as one lot and the benefit of the exemption notification extended to it, needs to be accepted. (iv) Consequently, the demand of duty along with interest upheld in the impugned order cannot survive. 17. In view of the above, the impugned orders cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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