MANOJ KUMAR SANJAY KUMAR Vs. COMMR. OF CUS. (ICDF)
LAWS(CE)-2015-1-133
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 21,2015

Appellant
VERSUS
Respondents

JUDGEMENT

R.K.SINGH - (1.)SUBSTANTIVE Appeal has been filed against Order -In -Original dated 19 -9 -2008.
(2.)The facts, briefly stated, are as under:
The appellants imported ten containers declaring the description of goods to be vegetable fatty acid and value U.S.$ 420 per MT CIF in the Bill of Entry No. 635823, dated 8 -10 -2007. In respect of nine containers (except container No. TEXU 3337205) the allegation was that they mis -declared the value although the description was found to be correct and in respect of the 10th Container the allegation was that the goods were found to be Crude Vegetable Oil and were also undervalued.

The ld. AR during hearing merely reiterated the findings in the impugned order even as the appellants citing specifics contended that the inferences/conclusions by the adjudicating authority have been drawn without proper appreciation of the evidence on record.

It is seen that the test reports in respect of nine containers categorically found that the goods were correctly declared as vegetable Fatty Acid. These goods were of Oman origin. The chemical examiner in a letter dated 24 -3 -2008 further confirmed that the goods in these nine containers are "Fatty Acid with neutral oil with their chemical constants which merits consideration under chapter sub -heading 38.23" which was the classification declared by the appellants also. However the Adjudicating authority held that although the goods were correctly declared as vegetable fatty acid they were of superior quality as they had neutral oil contents of around 40 -45% which would enable the manufacturer to manufacture superior grade of end products and thus had a value implication. We find that the appellants have rightly contended that there is no basis given in the adjudication order to suspect that the goods were of superior quality and the test reports are not supportive of this inference. They have also rightly contended that there is no legal basis to base the finding on the basis of Palm Oil Refiners Association of Malaysia (PORAM)'s product specifications particularly when the goods were of Oman origin. Further based on PORAM it was held that the goods were PFAD of superior quality. This finding directly flies in the face of the CRCL Report which categorically stated that the goods are Vegetable Fatty Acid. Further for the purpose of valuation the Adjudicating authority proceeded to compare the import data of PFAD and that too from Malaysia and Indonesia and not from Oman. In the impugned order it is clearly noted that the said import data is not valid for the purpose of valuation in terms of Rules 5 and 6 of valuation Rules 1988 and "no further data pertaining to Rule 7/7A was available". Therefore the adjudicating authority went ahead to say that the value is determined under Rule 8 "on the basis of data available in India as discussed in detail in Para 18 to 20 above" which works out to USD 528 PMT CIF. We are unable to fathom as to how this value of US$ 528 PMT CIF has been arrived at as neither the show cause notice nor the adjudication order throws any light as to how under Rule 8 his value has been arrived at. Therefore, the determination of the value of the impugned goods contained in nine containers based on the import data of PFAD (which is not the same as vegetable fatty acid) and that too from countries other than the country of origin and under Rule 8 without giving any methodology is totally without any sustainable legal basis. It is also seen that the goods contained in nine containers were released without any bond or undertaking and therefore, in the wake non -availability of the goods, the redemption fine is not imposable.

(3.)AS regards the tenth container, one sample was sent to SIIR which reported that the sample was found to be Vegetable Oil with FFA 45.8. However the sample sent to CRCL reported the FFA content to be 48.3% and 46.4% adding that the sample is "having characteristic of fatty material, whether it is edible or not is not clear as it is having such a high FFA." The Adjudicating Authority then records that for the products to qualify as Vegetable Fatty Acid FFA should be more than 50% as per the standards prescribed by Palm Oil Refiners Association of Malaysia (PORAM). But PORAM standards relate to palm based oil and so it is not understood as to on what basis legal authority has been accorded to PORAM standards for the purpose of deciding the nature of the impugned goods. No reference has been made to Indian standards in this regard. We agree with the contention of the appellants that PORAM cannot be made a legal basis for such determination particularly when the chemical examination report of CRCL has not given any clear finding in that regard at all. The value of the goods in the 10th container was adopted on the basis of the Tariff Value for Crude Palm Oleic for which again there is no legal justification as the CRCL report about the contents of the 10th containers nowhere stated that the goods are Crude Palm Oleic. We also find that the show cause notice alleged that the declared value was U.S.$ 410 Per MT while in fact the value declared by the importers was U.S.$ 420 PMT. The Adjudicating Authority has recorded that the goods were found to be odorless, off -white in colour and goods were not of Oman Origin although there is no basis whatsoever cited for recording such findings. None of the laboratory reports stated that the goods were odorless and off -white in colour. Indeed the Adjudication Order suffers from severe inadequacy with regard to the quasi -judicial analysis of the evidence and the appellants' contentions. In the light of the foregoing, we do not find the impugned order sustainable and therefore the appeal is allowed.
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