Delay in Drawal of Sample changes level of Carotene in Vegetable Oil, Test Report of Customs Revenue Laboratory cannot be relied on: CESTAT upholds order of Commissioner [Read Order]

The Bangalore bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT)while upholding the order of the Commissioner of Customs held that delay in the drawal of the sample changes the level of carotene in vegetable oil, test report of customs revenue laboratory cannot be relied on.

INU Exports Private Limited, the respondent imported 2667.881 MTs, 4583.252 MTs and 1012.154 MTs of edible oil (palmolein) and filed Into Bond Bills of Entry under the prior entry for clearance. The goods were warehoused in the customs bonded warehouse pending a 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 Palm 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.21/2002Cus. dated 1.3.2002.

A show-cause notices was 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.

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 later upheld by the 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.  A two-member bench of Dr D M Misra, Member (Judicial) and  R Bhagya Devi, Member (Technical) observed that “since there was inordinate delay in drawal of samples and receiving the test reports, the carotene level of vegetable oils reduces with time, hence, the test reports of the Customs Revenue Laboratory cannot rely and accordingly, he has confirmed acceptance of the test report of the goods at the load port by the adjudicating authority.” The Bench upheld the order of the adjudicating authority and dismissed the Revenue’s appeal.

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The Commissioner of Customs vs INU Exports Private Limited , ?2023 TAXSCAN (CESTAT) 1383