Case Law Details
Commissioner of Customs Vs INU Exports Private Limited (CESTAT Bangalore)
Introduction: The Commissioner of Customs appealed against INU Exports Private Limited in the CESTAT Bangalore. The case revolved around the delayed drawal of samples and its effect on the carotene level in imported vegetable oil. The Customs Revenue Laboratory’s test report was questioned in this context.
Detailed Analysis:
1. Import and Classification: INU Exports Private Limited imported edible oil (palmolein) and filed Into Bond Bills of Entry under prior entry for customs warehouse storage. They claimed classification under Chapter Subheading 15111000 of the Customs Tariff Act, 1975, and sought benefits under Notification No.21/2002.
2. Delay in Sample Testing: The imported goods were warehoused while awaiting a test report from the Customs Revenue Laboratory in Cochin. The delay in obtaining the test report was a critical factor in this case.
3. Test Report Findings: The Customs Revenue Laboratory’s test report, received on 3.12.2004, revealed that the samples contained carotene (as beta carotene) below 500 mg/kg. As a result, the conditions for availing benefits under the specific Notification were not met.
4. Classification Dispute: This discrepancy led to the issuance of show-cause notices proposing a change in the classification of the product. The new classification, which did not allow for the benefits INU Exports had claimed, was argued by the authorities.
5. Appeals and Decision: The adjudicating authority had initially classified the product under CTH 15111000 and allowed benefits under the Notification. The Revenue, unsatisfied with this decision, filed appeals. However, the learned Commissioner (A) rejected the Revenue’s appeals and upheld the original classification and benefit.
6. Delay and Carotene Levels: The Commissioner (A) based the decision on the principle that inordinate delays in the drawal of samples and the receipt of test reports can affect the carotene level in vegetable oils. Drawing from previous case law, the delay in the current case was considered critical.
Conclusion: The CESTAT Bangalore upheld the decision of the Commissioner of Customs. The delay in obtaining and analyzing samples, resulting in changes to the carotene levels in the vegetable oil, was seen as a valid reason to rely on the test reports from the load port and not from the Customs Revenue Laboratory. As a result, the Revenue’s appeals were dismissed as lacking merit.
This case highlights the importance of timely sample analysis in customs assessments and the potential consequences of delayed testing on the classification and benefits claimed by importers.
FULL TEXT OF THE CESTAT BANGALORE ORDER
None present for the respondents.
2. These three appeals are filed against common Order-in-Appeal No.70/2010 dated 31.3.2010 passed by the Commissioner of Customs (Appeals), Bangalore.
3. stated the facts of the case are that the respondent imported 2667.881 MTs, 4583.252 MTs and 1012.154 MTs of edible oil (palmolein) and filed Into Bond Bills of Entry 209403 to 209407 dated 21.10.2004; 209316 to 209318 dated 14.10.2004 and 209133 dated 20.09.2004, respectively under prior entry for The goods were warehoused in the customs bonded warehouse pending test report from the Customs Revenue Laboratory Cochin. The goods were cleared on execution of Bank Guarantee and by filing Ex-bond Bills of Entry claiming its classification under Chapter Subheading 15111000 of Customs Tariff Act, 1975, the benefit at Sl. No.34 of Notification No.21/2002 dated 1.3.2002 as Crude Pal Oil, Edible grade on payment of applicable duty. As per the test report received on 3.12.2004 from the Chemical Examiner, Customs Revenue Laboratory, Cochin Customs House, it was found that the samples were containing carotene (as beta carotene) below 500 mg / kg., hence, the condition of Sl. No.34 of Notification No.21/2002-Cus. dated 1.3.2002, as amended, not satisfied. Consequently, the same is classifiable under subheading 15119090 read with Sl. No.434 of the Notification No.21/2002-Cus. dated 1.3.2002. Accordingly, the show-cause notices were issued to the respondent proposing classification under the aforesaid heading and denial of the benefit of the Notification as claimed by them. On adjudication, the respective Bills of Entry have been assessed by classifying the product under CTH 15111000 extending the benefit under Sl. No.34 of Notification No.21/2002-Cus. dated 1.3.2002 by the Assistant Commissioner of Customs. Aggrieved by the said orders, Revenue filed appeals before the learned Commissioner (A), who in turn rejected the Revenue’s appeals. Hence, the present appeals.
4. The learned Authorised Representative for the Revenue has submitted that both the authorities below erred in applying the judgment of this Tribunal in the case of Ruchi Soya Industries Ltd. vs. CC, Mangalore reported in 2006 (193) ELT 499 (Tri.-Bang.) later upheld by the Hon’ble Karnataka High Court in as much as the delay occurred in the said case was more than three months whereas in the present case, the delay was less than three months.
5. On perusal of the records, we find that the learned Commissioner (A) following the principle of law laid in the above case has observed that since there was inordinate delay in drawal of samples and receiving the test reports, the carotene level of vegetable oils reduces with passage of time, hence, the test reports of the Customs Revenue Laboratory cannot be relied and accordingly, he has confirmed acceptance of the test report of the goods at the load port by the adjudicating authority. Accordingly, he has upheld the order of the adjudicating authority. We do not find any discrepancy in the said reasoning of the learned Commissioner (A). Consequently, the Revenue’s appeals are being devoid of merit, accordingly dismissed.
(Operative portion of the order was pronounced in Open Court.)
