ORDER
K.C. Mamgain, Member (T)
1. This appeal is filed by M/s. Ruchi Infrastructure Ltd., Kakinada against the Oder-in-Original No. 114/2002-RP, dated 19-3-2003 passed by the Commissioner of Customs and Central Excise, Visakhapatnam.
2. Shri G.L. Rawal, ld. Advocate, appearing for the appellants pleaded that M/s. Ruchi Infrastructure Ltd. imported a quantity of 2,335.844 MT of edible oil in Vessel MT SIAM SUPHA and stored the same in the bonded tanks on 22-2-2002 as per the permission accorded. 3 (three) Bills of Entry Nos. 145/4-3-2002, 154/6-3-2002 and 155/6-3-2002 were filed and imported cargo for home consumption. The said cargo was declared as “Crude Palmolein” of edible grade in bulk by classifying the same under Chapter Heading 1511.10 of the Customs Tariff Act, 1975 and claiming concessional rate of duty, as per S. No. 34 of the Notification No. 21/2002-Cus., dated 1-3-2002 and exemption from payment of Special Additional Duty (SAD) of Customs as per S. No. 7 of Notification No. 23/2002-Cus., dated 1-3-2002. Samples of the cargo were drawn on board the vessel by the Customs Officers and they were sent to the Chemical Examiner for analysis. Based on the previous test reports and earlier consignments imported by them, the Bills of Entry were finally assessed for speedy clearance of imported cargo. The importer pleaded that the Crude Palmolein (edible grade) was imported by them from M/s. Aavanthi Industries Pvt. Ltd., Singapore. The main factor for distinguishing refined/crude palmolein are FFA, Moisture Content, Colour and Rancidity. The statutory requirement for the Port Health Officer to draw the sample and send it for testing is necessary. The Port Health Officer had received the test report and issued certificate stating that the subject material is Crude Palmolein (edible grade) and it shall be refined before it is supplied for human consumption and conform to the Standards laid down under A-17.15 of PFA Rules for refined vegetable oil (Para 8 of Show Cause Notice). Show cause notice was issued to the appellants demanding duty on the ground that the Central Revenue Control Laboratory (CRCL), New Delhi had found the sample as under-
“The sample is in form of yellow colour liquid. It is Palmolein conforming to the requirements for the refined grade as laid down in I.S. Specifications 8361-E-1977.”
On the basis of this, the demand was confirmed by the Commissioner and he also ordered payment of interest on differential duty demanded. Ld. Counsel pleaded that the dispute regarding classification of Crude or Refined Palmolein Oil was settled by the Central Board, Customs as per Circular No. 85/2003-Cus., dated 24th September 2003, issued from F. No. 528/21/2003-Cus. (TU) wherein it has been stated in Para 5 that –
“With effect from 1st August, 2003, for the purposes of duty assessment, crude palm oil and its fractions (which includes palmolein) have been a more specific definition vide Notification No. 120/2003-Cus., dated 1-8-2003 which amends Notification No. 21/2002-Cus., dated 1-3-2002). As per this definition, “crude” palm oil/palmolein should have acide value of 2% or more and total carotenoid (as beta carotene) in the range of 500-2500 mg/kg, in loose of bulk form.”
In Para 10 of the Board Circular clarifies that –
“…Bills of entry filed for home consumption prior to 1-8-2003 should be assessed on the basis of test reports of samples drawn by the Port Health Officer (PHO). If the reports mention the item as ‘crude palm oil/palmolein’ or as palm oil/palmolein which needs further processing, the report should be accepted and assessment finalized accordingly. If the test reports indicate the item as RBD palm oil/palmolein, the assessment should be finalized under sub-heading 15119010.”
Ld. Counsel, therefore, pleaded that since Port Health Officer has mentioned their item as crude palmolein oil which needs further processing, this reports should be accepted.
Para 13 of the said Circular states that –
“Action may be taken accordingly in respect of past, pending and future clearances of palm oil/palmolein.”
Since in this case clearances were taken prior to 1-8-2003 and the Port Health Officer has clearly given the test report that the sample is of crude palmolein and it is refined before supply for the home consumption, therefore, the demand confirmed by the Commissioner is liable to be set aside. He relied on Supreme Court decision in case of Ranadey Micro Nutrients v. CCE -1996 (87) E.L.T. 19 (S.C.) and stated that the Supreme Court has held that Board’s Circular are binding on Officers of Revenue Department.
3. Shri L. Narasimha Murthy, SDK appearing for the Revenue fairly concedes that there is no case for the Revenue.
4. We have carefully considered the submissions made by both the sides. We find that the controversy has been settled by the Board as per the above said Circular No. 85/2003-Cus., dated 24-9-2003. In this case, the Port Health Officer has clearly mentioned that crude palmolein sample conform the standard laid down under PFA Rules and it is refined before supply for home consumption. In view of this test result of the Port Health Officer read with Board Circular, it is not necessary to go with the test result of the Central Revenue Control Laboratory. Therefore, we set aside the order of the Commissioner and allow the appeal.