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"I have carefully considered the arguments. There is considerable force in what the importers have placed before me. in the trade, palm fatty acid and palm stearin fatty acid are differently known.The source from which these materials are derived is also different in that palm fatty acid, is derived from palm oil, while stearin fatty acid is derived from palm stearin, the latter being one of the constituents of the palm oil. In composition also these two materials differ. While palm oil contains palmitic acid to an extent of 41 to 47 per cent, the palmitic acid content in palm stearin is higher, starting from 46 to 74 per cent. Similarly, in terms of oleic acid (unsaturated acid) the palm oil content is nearly 37 to 40 per cent, while palm stearin acids have lower percentage, namely, 15 to 37 per cent. Due to the lower content of oleic acid, the iodine value for palm stearin is 21 to 49 while for palm oil, it is 51 to 55. Also the description in appendix 9 for palm oil is an artificial definition in that the term has been allowed to include even other oils, such as, palm Kernel Oil and also the constituents of palm oil, namely, palm olein and palm stearine. However, this artificial definition cannot be transferred to Appendix 4 where the term used is 'palm fatty acid' without any qualification or addition. This position appears to be a lacuna in the policy. It is a legal avoidance, but not illegal import. In these circumstances, the goods may be released. WREC if necessary may also be issued for the period for which the goods were detained."

(i) It is an admitted fact that the appellants imported Industrial Palm Stearin Fatty Acid. In para 13 of the Adjudication order, the Collector has observed: "Since the goods in question namely Palm Stearin Fatty Acid is not an OGL item ...".

The appellants entered into a contract for import of "3500 M/Tons Industrial Stearin Fatty Acid". In the remarks column of the contract it was stated by the foreign suppliers "we guarantee that goods will be other than Palm Fatty Acid." Palm oil is obtained from palm fruit by extraction process. After palm oil is obtained, the oil never remains to be palm fruit. From palm oil, two products are obtained by fractionation, one is the liquid fraction called palm olein and the other is solid or semisolid fraction known as palm stearin. After this fractionation, palm stearin becomes a completely different product separate from palm oil. It ceases to be palm oil. Palm Stearin Fatty Acid Is obtained from Palm Stearin by hydrolysis process. Therefore, the source of palm stearin fatty acid is palm stearin and not palm oil or palm fruit. Paim Fatty Acid is derived from palm oil directly. This fatty acid is mentioned at Serial No. 50 of the Appendix-4 of Import-Export Policy 1983-84. In Godrej Soaps Ltd. and Ors., the Governmemt of India (Full Bench) in their order-in-review in 08- B of 1980 dated 26.9.1980 reported in 1981 -ELT-72 (GOI), have held that palm olein and palm oil are not identical. Palm oil and palm olein have distinct name and character. ISI specifications for the two are different. Full Bench of the Central Board of Excise & Customs in their Order Nos. 179-A, 189-Aand 190- B of 1982 in the case of OswalAgro Mills Ltd. and os., reported In 1982-ECR-530-D, has held that "palm oil" and "palm stearin" are different items (vide paragraphs 42.1, 42.2 and 42.3. of the order). In the case of Purbachal International and Anr., reported in 1985-(21)-ELT-673 (Cal), Hon'ble Calcutta High Court held that ordinary Portland cement and white cement were two different and distinct commercial commodities. In Oswal Oil Refinery, Madras v. Collector of Customs, Madras (1984-(i8)-ELT-662), Customs, Excise & Gold (Control) Appellate Tribunal also held that palm olein was not palm oil. So, the logical conclusion will be that palm stearin fatty acid is different from palm fatty acid. In the case of Kaplan's Enterprises v. Union of India (AIR 1986-Delhi-221) the Hon'ble Delhi High Court has categorically held that palm fatty acid and palm stearin fatty acid are different commodities.

23.6. By Public Notice in 7/83 dated 11.11.1983, Palm Acid Oil, Palm Fatty Acid, Palm Kernel Oil, Palm Stearin, Palmitic Acid and soap stock were deleted from Appendix- 4. A new paragraph 10 was added to Appendix 9 of the Import Policy 1983-84, with heading "Fatty Acids and Acid Oils". It was stated in that paragraph that import of the following items would be made by the State Trading Corporation of India Limited only under Open General Licence:-

(i) Laurie Acid, (ii) Oleic Acid, (iii) Stearic Acid.

(iv) Palmitic Acid.

(v) Palm Fatty Acid.

(vi) Palm Acid Oil.

(vii) Palm Kernel Oil.

(viii) Palm Stearin.

(ix) Other Fatty Acids, pure or mixed, including acid oil, all types.

(x) Soap Stocks.

"Palm Fatty Acid" appearing at Item (V) of para 10 of amended Appendix-9 includes palm oil fatty acid and palm stearin fatty acid. All palm based products were in Appendix-4 earlier according to the scheme of the Import Policy. "Other Fatty Acids" appearing at Item (IX) of paragraph 10 of Appendix 9 would mean all other Fatty Acids not covered by the group (i) to (viii). After issue of this Public Notice, only those goods could be imported under OGL against item 16 of part III of Schedule to OGL 1/83, which were still O.G.L.items after 11.11.1983. From that date, the items mentioned in paragraph 10 of Appendix-9 could not be imported by any private importer as those were canalised through State Trading Corporation of India. So, the effect of the Public Notice 47/83 was that the appellants were not eligible to import the goods in question under O.G.L 1/83. In Oswal Woollen Mills Ltd. and Anr. v. Union of India and Ors. (1985- (4)-ECC-81), the Punjab and Haryana High Court held that there was no right to import beef tallow under O.G.L. after canalisation of the item.