CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 20267 / 2014 Application(s) Involved: C/Early Hearing/29258/2013 in C/27716/2013-DB s) I 2 €/27716/2013-DB [Arising out of Order-in-Appeai No. 08/2013 dated 06/09/2013 passed by the Commissioner of Customs, Central Excise and Service Tax, Guntur] Office of the Commissioner (A.R.) 13 MAR 201, 3f Industries Ltd. Survey No.1604, APIIC-IALA, Epuru-18, Pantapalem Village, Muthukur Mandal - 524 323, SPSR Nellore Dist. Andhra Pradesh Lu f Swatom. Versus Commissioner of Customs, Central Excise and Service Tax Guntur P.B. No. 331, C.R. Building, Kannavarithota, Guntur - 520 004, Andhra Pradesh Respondent(s) Appearance: Mr. A.K.S. Moorthy, Authorized Rep. For the Appellant Mr. A.K. Nigam, AR For the Respondent CORAM: HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 24/02/2014 Date of Decision: 24/02/2014 tbs veOrder Per: B.S.V. MURTHY Even though early hearing application has been listed for hearing and the stay application filed by the appellants earlier had been rejected by this Tribunal vide Miscellaneous Order No, 27391 & 27393/2013 dated 26.09.2013, we Proposed to take up the appeal Itself for final hearing in view of the submissions by the appellant that appellant had imported 2300 MT’s of Crude Palm Oil on 28.05.2013 and the appellant Is suffering huge amounts as demurrage and storage charges and financial loss and also in view of the decision of the Hon‘ble High Court in the appeal filed by the appellants dated 03.12.2013 wherein the Hon’ble High Court directed the Tribunal to decide the Issue preferably within a period of one month from the date of communication of their order. 2, Heard both the sides. The issue involved is whether the Crude Palm Oil imported by the appellant can be cleared availing exemption under Notification No, 12/2012 dated 17.03.2012. The SI. No. 51(II) (A) covers the item in dispute before us and which reads as under: ‘Chapter or S. | Heading | Description of Standard | Additional | Condition No. | or sub- goods. rate duty-rate No. heading or tariff item 51 15 | heading 1511, Nil - 5The No. 5 written in the last column is the condition for importation. According to this condition, the concessional rate is available “if the Importer follows the procedure set out In the Customs (Import of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 1996". 2.1. The sample of the product imported by the appellant was tested by the Food Analyst and according to him the acid content was 10.14, According to the Prevention of Food Laboratory Act, appellant can get the same tested by Central Good Laboratory if they are not happy with the report of Food Analyst, Accordingly the appellant get this tested by Central Food Laboratory who reported the acid content as 10.06. The Proceedings were Initiated to deny the benefit on the ground that the Product imported by the appellant Is not covered by oll of edible Crude and therefore exemption is not available. For taking a view that appellant is not eligible for the exemption and oll cannot be treated as edible crude, reliance was placed on Food Safety and Standards (Food Products and Food Additive) Regulations 2011. According to 2.2.19 of the regulations, “19, Palm oil means the oil obtained from fleshy mesocarp of fruits of the oi! palm (Elaeis Guinensis ) tree by the method of expression or solvent extraction, It shall be clear, free from rancidity, suspended or other foreign matter, separated water, added colouring and flavouring substances or mineral oil. It shall conform to the following standards, namely:- Butyro-refractometer reading at 50°C 35,5-44.0 or Refractive Index at 50°C 1.4491-1.4552 Melting point (capillary slip method) Not more than 37°C Iodine value (Wij’s method) 45-56 Saponification value 195-205, wyUnsaponifiable matter Not more than 1.2 per cent Acid value Not more than 10.0 Indigenously produced raw Palm Oil obtained by method of expression may be supplied for human consumption as such provided acid value is not more than 6.0. But palm oil imported into the country or produced by solvent extraction shall be refined before it is supplied for human consumption and it shall conform to the standards laid down under regulation 2.2.1 (16). Additionally, it shall have Flash Point (Pensky-Marten Closed Method)-Not less than 250°C Test for argemone oil shall be negative. However, it may contain food additives permitted in these Regulations and Appendices. The oil 0 refined shall not contain Hexane more than 5.00 ppm.” 3. ‘The learned authorized representative on behalf of the assessee- importer submitted that the report of the Chemical Examiner was not at all provided to the appellant even though a request was made and he draws our attention to the record of personal hearing at page No, 168 of the appeal memorandum. The Central Revenue Control Laboratory report was not at all provided to the appellant and after request was made by them during the personal hearing it was provided on 02.07.2011. In the meanwhile since the appellant did not have the CRCL report and report of Food Analyst was against them, the appellant had requested for sample test by the CFL which also ultimately came against them. The original adjudicating authority as well as the appellate authority have relied upon the reports of Food Analyst and CFL and CRCL repot has been ignored. He relied on the decision of this Tribunal in the case of Asst. Commissioner of Cus. & C.E Vs. Nikhil Refineries (P) Ltd. to submit that the Revenue cannot Ignore CRCL report. Further It was also submitted that relying upon the decision of the Hon‘ble High Court of Kolkata in the case of Goku! Refoils Solvents Pvt. Ltd. Vs. Union of India & ors. reported in [2012 (278) E.L.T. 433 (Cal.)j and the decision of the Hon’ble High Court of Gujarat in the case of Cargill India Pvt. Ltd. & Ors. Vs. Union of India reported In [2013 (288) E.L.T. 209 (Guj.)] that even if the acid value be5 is more than 10, the imported oll cannot be treated as non-edible oil since the oil is allowed to be cleared subject to the condition that it should be refined and thereafter only sold. The relevant paragraphs of the decision of the Hon‘ble High Court of Gujarat wherein the regulation under ppm cited above has been considered Is reproduced below: “3.25 Accordingly, in terms of the said provisions under Regulation 2.2.1{16}, it is categorically and ex facie evident that the standards prescribed under the said rules ie. under Regulation 2.2.1 and sub-headings 2.2,1 (1) to 2.2.1(24} are for “edible oils” and that after manufacture of edible oil the requirement of packaging and labelling are also mandatory. In other words, the overall reading of Regulation 2.2.2(19) will clearly show that the imported Palm Oil has necessarily to be refined to conform to the Standards under Regulation 2.2.1(16) and 2.2.1(19} except with regard to Acid Value to be less than 0.5% before the same can be sold for human consumption.” Taking note of the regulations and also taking note of the fact that appellants are expected to refine the oll and thereafter only release the oil into the market and therefore at the stage of Import, the oil cannot be considered as a non-edible crude, Hon’ble High Court of Gujarat as well as the Hon'ble High Court of Kolkata held that exemption benefit under Notification No. 21/2002 has to be allowed. The present notification Is a successor notification of the earlier notification and the conditions remain the same. At this stage the learned AR submits that the fact that it has to be refined and thereafter only it should be released and after refining itself would show that at the time of importation, the oil is not of edible crude and therefore does not become eligible for exemption. We are unable to Consider this submission In view of the decision of the Hon’ble High Court of Gujarat taking a view that exemption would be available under this heading. 4. In view of the above observations, we consider that the appellant is eligible for the benefit of notification and accordingly the appeal is allowed with consequential rellef, if any, to the appellant. At You6 this stage, the authorized representative requests that the order may be issued by Dasti since the appellant has incurred heavy demurrage and suffered heavy financial losses. We consider the request to be reasonable and order the Registry to do so. (Order dictated and pronounced In open court) Quereotands oe (S.K. MOHANTY) JUDICIAL MEMBER