Custom, Excise & Service Tax Tribunal
Commissioner Of Customs (Prev) ... vs M/S Ruchi Soya Industries Ltd on 25 April, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad C/CO/64/2010-DB Appeal No.C/384/2009-DB [Arising out of OIA-23/Commr.(A)/JMN/2009 dated 29.06.2009 passed by the C.C. Jamnagar] Commissioner of Customs (Prev) Jamnagar Appellant Vs M/s Ruchi Soya Industries Ltd. Respondent
Represented by:
For Appellant: Mr. Sameer Chitkara (AR) For Respondent: None CORAM:
HONBLE PRESIDENT DR. SATISH CHANDRA HONBLE Mr. C.J. MATHEW, MEMBER (TECHNICAL) Date of Hearing/Decision:25.04.2018 Final Order No. A / 10751 /2018 Per: C J Mathew Appeal lies against order-in-appeal no. 23/Commr(A)/JMN/2009 dated 29th June 2009 of Commissioner of Customs (Appeals), Jamnagar which set aside the order of the original authority denying the benefit of exemption at serial no. 34 in notification no. 21/2002-Cus dated 12th March 2002 on the ground of beta-carotene content in the crude palm oil imported by M/s Ruchi Soya Industries Ltd. (then known as M/s General Food Ltd.) being below the prescribed threshold to disentitle them from the privilege. The first appellate authority has followed a catena of decisions of the Tribunal to discard the test results owing to lapse of time causing depletion of the carotene content in crude palm oil. The dispute on quantity is now settled and is not pressed.
2. The primary difference between crude palm oil and refined palm oil is the purification and bleaching process that renders it fit for human consumption. The distinguishing colour of crude palm oil, derrived from the carotene content; is altered by bleaching during the refining process. Refining of palm oil, being a value addition rendered domestically, the exemption notification incentivizes the import of crude palm oil with lower duties of customs. M/s General Food Ltd had imported 2040 MT of crude palm oil which 1765 MT were cleared against five bills of entry no. F-97/ 06.07.2004, F-98-06.07.2004, F-99-07.07.2004, F-100/13.07.2004 and F-105/15.07.2004. Samples drawn were tested on 3rd July 2004 and 30th July 2004 with the results indicating beta-carotene content of 500-2500 mg/kg and 467-468 mg/kg. According to further test carried out at Central Revenue Control Laboratory on board samples was found to contain 444.5 mg/kg and shore tank sample to contain 445.7 mg/kg of beta carotene following which demand of Rs. 42,42,770/- was proposed by denying the benefit of concessional rate of duty for which beta-carotene in the range of 500-2500 mg/kg was prescribed. The differential demand on this count, as well as on the quantity liable to duty, having been decided in favour of importer in the impugned order, Revenue has preferred this appeal
3. Revenue is aggrieved by the discarding of the last test result despite continuation of the litigation against challenging the order of Tribunal on the basis of depleting carotene content, cited on behalf of the appellant, before the Honble High Court.
4. We have heard Learned Authorized Representative who submitted that the decision in Ruchi Soya Industries Ltd. v. Commissioner of Customs (Prev.) Jamnagar [2006 (206) ELT 827 (Tri. Mum.)] relied upon in the impugned order has not attained finality. We also take note that this order, followed an earlier decision of the Bangalore Bench which had held that:
10.?While dealing with the above contention of the appellants after taking note of the fact that various test results taken at various times showed reduction of carotenoids and after taking into account the opinions given by the experts in the field, the Tribunal concluded that beta carotene level does not remain the same and with lapse of time and temperature variation, there is deterioration of beta carotene content. It was also observed that in deciding the said point, scientific findings given by repute research institute cannot be ignored. For better appreciation, we reproduce Para 5 of the said decision hereinbelow :
5.?The learned Advocate produced a copy of letter from Ministry of Consumer Affairs Food and Public Distribution to Department of Revenue. In the letter, the Chief Director-cum-edible oil Commissioner makes a case for deleting the stipulation of carotenoid content in the crude palm oil for the simple reason that when crude palm oil is refined, carotenoids both alfa and beta are removed. Crude oil is refined prior to hydrogenation. Hence, the Edible Oil Commissioner maintained that there is hardly any need to stipulate the requirement of carotenoid content for import of crude palm oil. In fact, in the letter there is mention that edible oil Commissioner had entrusted RRL Trivendrum to find out the impact of time and temperamre on the carotenoid content during the transit period of import of crude palmoline from Indonesia to India. The learned Advocate produced a copy of RRL Trivendrums letter to edible oil Commissioner, The extract of the letter is given below :-
COUNCIL Of SCIENTIFIC & INDUSTRIAL RESAERCH REGIONAL RESEARCH LABORATORY THIRUVANANTHAPURAM. KERALA - INDIA :
Dr. C. ARUMUGHAN Dr. R. A. Khan Chief Director & Edible Oil Commissioner Department of Food & Public Distribution Directorate of Vanaspati, Vegtable Oil & Fats New Delhi.
Sub : Analytical results and comments of imported CPO received from Dr. Khan.
Please find enclosed the results and my comments. In my opinion the imported CPO are very old may be more than one year old from the date of production. The average values for carotenes should not be less than 600 ppm for fresh CPO. The fact that of most of the samples are showing value less than 400 ppm indicate that they were stored for long time. As shown in our controls CPO shipped with 550-600 ppm carotene the maximum loss would be less than 10% when it is received at the Indian port. It is also suspected that some amount of mixing of stearin with.
CPO. If you need any more clarification, please contact me.
With best regards, Yours sincerely,
-sd-
C. ARUMUGHAN Encl. as above A perusal of the above letter show that the carotene content in crude palm oil varies with time. Moreover, the learned Advocate drew our attention to the decision of the Tribunal in the case of Commissioner of Customs, Cuticorin v. KTP Oil Mills [2005 (182) E.L.T. 376 (Tri. - Chennai)] wherein the Tribunal has held, that Chemical analysis of three months after it is drawn could not serve any purpose. In fact, the above view is only that of Chief Chemists CRCL. In that case also, the item imported was crude palm kernal oil. The above case refers to clarification by CRCL, New Delhi to the effect that any analysis after a period of three months from the date of drawal of sample would not serve any purpose. There is also nothing on record to show that the method adopted by Cochin Customs Lab was defective. The fact is that at the time of import, the goods satisfied the conditions of the notification. Even when we perused the results of CRCL, New Delhi, we find that in respect of 2 samples, the carotene content is as per the requirements the values are 524.3 and 525.8 - In respect of 4 samples, the difference is only marginal values are 194.6, 485.5, 483.1, 475.7 only in respect of remaining three samples, the difference is appreciable. The values are 391.9, 390.5 and 424.1. We are satisfied that over a period of time, the beta carotene content in crude palm oil decreases.
Though that decision is pending in appeal of Revenue before the Honble High Court of Bombay, the substantial question of law was restricted to correctness of discarding of voluminous evidence and submissions that would controvert the decision of the Tribunal which was premised only on carotene content. It would, therefore, appear that the proposition that beta carotene content in crude palm oil diminishes with time is not the primary dispute before the Honble High Court and jeopardize the decision cited as precedent only if Revenue is able to furnish other evidence of non-eligibility for concession rate of duty.
5. It is not in dispute that the palm oil under import was in crude from and requires refining, bleaching and deodorizing before it is released for human consumption. The primary purpose of prescribing a broad range of beta carotene content in the exemption notification is to ensure that it is restricted to palm oil that intended to be subjected to value addition in India. The test result relied upon by Revenue is that of the remnant by the Central Revenue Control Laboratory after testing the samples drawn on board on 6th June 2004 and from shore tank on 9th June 2004 had shown contradictory levels of beta carotene at two different laboratories. The samples of both tested at Kandla on 3rd July 2004 was in favour of importer while samples tested at Vadodara on 30th July 2004 was marginally below the threshold in the notification. The last of the tests conducted at Delhi on 5th October 2004 indicated a content less than that ascertained at Vadodara. From the cited decision in their own case, it is clear that expert opinion holds that carotene content reduces due to lapse of time. This is reflected in the impugned test reports too. The various tests of the samples were effected over a period of four months since arrival of cargo and there is a consistent decline in the distinguishing content. Furthermore, the first test at Kandla passes muster.
6. In these facts and circumstances, the conformity of impugned goods with crude palm oil as per the prescribed parameters at the time of import should not be in doubt. The appeal of Revenue is without merit and is dismissed. Cross-objection is also disposed of.
(Dictated and pronounced in the open court) (Mr. C.J. Mathew) (Dr. Satish Chandra) Member (Technical) President Neha 5 | Page C/384/2009-DB