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2. As per facts on records, the respondents, M/s Arani Agro Oil Industries Ltd. have imported 1492.308 Mt. of Crude Palmolein (edible grade) vide WBE No. 273, dated 16.09.2003 declaring the goods under sub-heading No. 15119090 of Customs Tariff Act 75 chargeable to BCD 70% and as per shore ullage, the quantity was 1488.308 Mt.

3. The samples were drawn in presence of the importer by both the Port Health Officer (PHO) as also the Customs officers and goods were assessed provisionally. Vide report dated 18.9.2003, the PHO confirmed the samples as having excess acid value and adulterated. The PHO further informed that the acid value was 9.83 and a sample was also forwarded to the Central Food Laboratory (CFL), Calcutta for further analyses and the Director of CFL vide letter dated 18.11.2003 opined that samples of Crude Palmolein was adulterated. Meanwhile, appellant approached Honble AP High Court and in terms of directive of Honble AP High Court in the Writ petition No. 24003/2003 dated 09.12.2003, the Assistant Commissioner allowed clearance of said goods provisionally on payment of duty vide Ex-bond Bill wherein appellant classified goods under 15111000 of CTA 75. The Honble AP High Court vide final order dated 082.2006, directed the Assistant Commissioner to proceed with finalization of assessment subject to decision of adulteration by the competent authority.

4. Besides, the samples (both on-board & shore tank) were forwarded vide 06 Test memos i.e., 1476 to 1481 of 2003, to the Chemical Examiner-Customs House Laboratory-Vizag revealed the Acid Value ranging between 5.29 to 5.66 and the total Carotenoid Concentration ranging between 363 to 422. Accordingly, observing due principles of natural justice and in consideration of the sample reports furnished by the PHO and Chemical Examiner, the Assistant Commissioner, vide Order No. 5/2008 dated 29.5.2008, finalized assessment by classifying goods as Crude Palmolein (other than Edible Grade) under 15111000 under CTA 75 and demanded duty-BCD @100%, SAD 4% at Tariff rate of $532 Pmt.

4. Vide Para 2 of the Circular No. 40/2001-Cus, dt. 13.07.2001, as per Edible Oils Packaging (Regulation) Order 1998 of Ministry of Food and Consumer Affairs (Dept., of Sugar & Edible Oils), it was spelt out that the term "edible oil means vegetable oils and fats and includes any margarine, vanaspati, bakery shortening and fat spread as specified in the PFA Act 1954 and rules made thereunder for human consumption. The PFA Act 1954 has laid down the standards of Crude Palm Oil and prescribed the maximum limit of the acid value for CPO as 10.0". Thus, the same stand and the standard as prescribed in the PFA Act 1954 apply equally in un-ambiguous terms to the Crude Palmolein in the instant case wherein the Acid Value shall be below 06 with Carotenoid concentration ranging between 500-2500 mg/Kg. Thus, the classification of carried out by the Assistant Commissioner is very much in order and accordingly, the goods are to be tested for the standards to be confirmed at the time of importation only and not after their importation for supply to human consumption after refining, since the same is not contemplated under Customs Act 1962.

5. The standards at A 17.15 of PFA Rules 1954 are applicable for the goods of edible grade and issued for human consumption after refining, in which case also the acid value shall not be more than 0.5 after refining. Thus, the post importation conditions are not relevant to the goods which do not conform to the standards laid down under Appendix B of PFA Rules 1955 and as also the Customs Act 62. Hence for extension of concessional rate of duty under Notification No. 21/2002-Cus, dt. 01.03.2002 the goods shall be of edible grade with Acid value within the prescribed standard and conforming to the prescribed range of Carotenoid concentration.