Custom, Excise & Service Tax Tribunal
Cc, Vijayawada vs Foods, Fats & Fertilizers Ltd on 22 January, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. C/814/2008 (Arising out of Order-in-Appeal No. 57/2008 (V-II) Cus, dated 24.09.2008 passed by CC&CE (Appeals), Visakhapatnam) CC, Vijayawada ..Appellant(s) Vs. Foods, Fats & Fertilizers Ltd. ..Respondent(s)
Appearance Shri Dora Reddy, Asst. Commissioner/AR for the Appellant. None for the Respondent. Coram:
Honble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Honble Mr. MADHU MOHAN DAMODHAR, MEMBER(TECHNICAL) Date of Hearing: 22.01.2018 Date of Decision: 22.01.2018 FINAL ORDER No. A/30020/2018 [Order per: M.V. Ravindran]
1. This appeal is filed by Revenue against Order-in-Appeal No: 57/2008(V-II)Cus, dated 24.09.2008.
2. None appeared on behalf of Respondent despite notice. Since the appeal is of 2008, the same is taken up for disposal, even in the absence of any representation.
3. Heard Ld. DR and perused the records.
4. The issue that falls for consideration is regarding the correct classification of the goods imported i.e. Palm Stearin. Adjudicating authority vide speaking order classified the goods imported under chapter 38.23 as against the claim of the Respondent before him being covered under chapter 15.11. Aggrieved by such an order, an appeal was preferred by Revenue before the first appellate authority. The first appellate authority after considering numerous judicial pronouncements and also CBEC circular and the Chemical Examiners comments, held that classification of the product needs to be classified under chapter 15.11, giving to such a conclusion he had set aside the impugned order before him.
5. We find that Ld. DR is correct in stating that the issue is now covered by the decision of Honble Apex Court in the case of Commissioner of Central Excise, Customs & Service Tax Visakhapatnam vs. Jocil Ltd [2011(263) E.L.T 9 (SC)] on an identical issue i.e. classification of imported palm stearin oil. Their Lordships in paras 9 & 10 held as under:
9. Heading 15.11 covers palm oil and its fractions, whether or not refined, but not chemically modified. According to the Harmonized Commodity Description and Coding System (for short "HSN") Explanatory Notes developed by the World Customs Organization, Chapter 15 covers vegetable or animal fats and oils and their fractions when used as foodstuffs or for technical or industrial purposes. The CESTAT, in deciding the issue of classification, has relied upon the opinion of the Customs and Central Revenue Control Laboratory (CRCL) and a Central Board of Excise and Customs (CBEC) Circular dated 03.12.2002 to fortify its conclusions. The CRCL opinion advised that heading 15.11 covers palm oil and its fractions, which include the constituent elements like triglycerides of fatty acids and point fractions obtained by the process of fractionation. The CBEC Circular had distinguished between triglycerides of fatty acids and free fatty acids and went on to state that palm stearin was basically a triglyceride (ester) of fatty acids. Based on this ground, and also on the fact that the report of the Chemical Examiner merely looked at the free fatty acid content and not the ester values to indicate the presence of triglycerides, the CESTAT ruled in favour of the respondent.
10. We are of the considered opinion that the import of the CRCL opinion and the CBEC Circular needs to be understood in proper perspective. The mere fact that the CRCL opinion and the CBEC Circular (No. 81/2002 - dated 03.12.2002) affirm the chemical composition of palm stearin cannot make a case for its classification under Ch. Sub Heading No. 15 11 90 90. The essential conclusion to be drawn from these two reference documents is that palm stearin, which is obtained from the fractionation of palm oil, is comprised mainly of triglycerides of fatty acids. The question then arises as to whether it would be appropriate to categorize the triglycerides present in the oil, viz. Palm Stearin, under Chapter 15, while bracketing the free carboxylic acids derived during the refining process under Chapter 38.
6. After recording the factual position as reproduced, we find that their Lordships in para 15 to 18 held as under and settled the law that the classification of Palm Stearin Oil will be under chapter 38.22.
15.Referring to the essential characteristics of the subject matter would not only be applying contorted logic in arriving at the correct classification but would also amount to ignoring the express identification offered in Chapter 38 of the First Schedule of the Customs Tariff Act, 1975.
16. We are of the opinion that the CBEC Circular needs to be thus harmonized with the Eight-digit First Schedule introduced vide the Customs Tariff (Amendment) Ordinance, 2003. As mentioned before, the Circular had been issued prior to the coming into force of the amended Tariff Schedule and consequently, did not have the latter as its reference point. The goods, which were imported between August 2003 and November 2004, would undoubtedly be classified under the Eight Digit Tariff Schedule and on account of the aforementioned reasons, the subject matter in question will be classifiable under Chapter 38 of the same.
17.Having held thus, it is also important to note that the interpretive powers of this Court are significantly curtailed by the presence of a specific enumeration in Chapter 38 of the Tariff Schedule. This Court, while deciding an issue of classification, can only adjudicate along the lines of settled norms and precedents drawn from statutory interpretation and judicial precedents.
18.For the reasons mentioned hereinabove, we are in agreement with the contentions raised by the appellant and the appeals are allowed. By this judgment, the order of the CESTAT is set aside, and the decision of the Commissioner (Appeals] affirming the order of the Assistant Commissioner is restored. However, we leave the parties to bear their own costs.
7. Respectfully following the ratio, we hold that the impugned order is liable to be set aside and we do so. Impugned order is set aside and appeal is allowed.
(Order dictated & pronounced in open court) (MADHU MOHAN DAMODHAR) (M.V. RAVINDRAN) MEMBER (TECHNICAL) MEMBER (JUDICIAL) vrg (1) Appeal No. C/814/2008