2012 Supreme(Guj) 318

Hon’ble Mr. Acting Chief Justice Bhaskar Bhattacharya &
Hon’ble Mr. Justice J.B. Pardiwala
Cargill India Private Ltd. & Ors.
Versus
Union of India Thro the Secretary & Ors.
Special Civil Application No. 1051 of 20121—Decided on 02/07/2012

Whether the revenue was justified in refusing the benefit of exemption in the facts of the case.

Headnote:Head Note :

       Customs Act, 1962 (Central Act 52 of 1962) — Sections 17, 18, 46, 47 and 50 — Customs (Import of Goods at Confessional Rate of Duty for Manufacture) Rules, 1996 — Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 — Heading 2.2.1 (1) to 2.2.1(19), 2.2.1. (19) — Prevention of Food Adulteration Act, 1954 (Central Act 37 of 1954) — Prevention of Food Adulteration Rules, 1955 — Food Safety and Standards Act, 2006 — Section 3(3) — Customs Tariff Act, 1975 — Chapter 15 Note 1 — Import of crude palm oil (edible grade) from foreign supplier — Detention order of stoppage of deliveries — Ground that the acid value of goods was above 10 beyond prescribed limit — And this was not eligible for exemption/confessional rate of duty as claimed by petitioner — Propriety of — Finding as to — The contention of revenue as that the type of goods is not entitled to exemption under customs notification No. 21 of 2002 as acid value is more than 10 and for that reason it was permitted provisional release of goods on conditions — Court while considering the exemption notification No. 21 of 2002 found that crude oil falling under Heading 1511 having acid value of 4 and above in range of 250 mg/kg to 2500 mg/kg in loose or bulk form for manufacture of refined oil as in the case are fully exempted on condition No. 5 — There is no dispute that consignment in question confirmed to exemption range of 250 mg/kg to 2500 mg/kg — The exemption was refused merely because it has acid value above 10 notwithstanding the fact that in the said notification exemption is available even in cases of crude palm oil falling under Heading 1511 having an acid value of 4 and more — Court held that once the description of goods is given as crude palm oil falling under Heading 1511 having acid value of 4 or more and at the same time the total carotenoid (as beta carotene) in range of 250 mg/kg to 2500 mg/kg as in the case petitioners are entitled to benefit of for full exemption on condition No. 5 — Apart from the aforesaid facts Calcutta High Court have held that consignment in that case having more than 10 acid value is fully exempted from duty — The Committee of Commissioners did not challenge the said decision of Calcutta High Court — Such being the position there is no justification on the part of revenue to take a different view in the consignment involved in the these cases and order detention of goods and issue show cause notices — Court held crude palm oil imported is entitled to get benefit of exemption of duty.

       Held :

       The only question that arises for determination in this application is whether the Revenue was justified in refusing the benefit of exemption Notification No. 21 dated 1st March 2002, Sl. No. 30 as amended simply because on chemical analysis of the sample drawn from the consignment it was observed that the acid value was about 10%.

        [Para 8]

       Court find that crude palm oil falling under Heading 1511 having Acid Value of 4 and above and the total carotenoid (as beta carotene) in the range of 250 mg/kg. to 2500 mg/kg in loose or bulk form for manufacture of refined oil, refined palmolein, vanaspati, bakery shortening or inter-esterified fats are totally exempted on condition No. 5.

        [Para 9]

       There is no dispute that the consignments in question contain total carotenoid (as beta carotene) in the range of 250 mg/kg. to 2500 mg/kg but the only reason for not granting exemption is that the acid value is above 10, notwithstanding the fact that in the said notification exemption is available even in cases of crude palm oil falling under Heading 1511 having an acid value of 4 and more. According to the Revenue, as under the Prevention of Food Adulteration Rule, palm oil containing acid value of 10 or more is not fit as edible, the consignment in question having acid value of more than 10, cannot be termed as edible. [Para 10]

       Once we find that that the description of the goods has been given as crude palm oil falling under Heading 1511 having an acid value of 4 or more, and at the same time the total carotenoid (as beta carotene) in the range of 250 mg/kg. to 2500 mg/kg, the petitioners are entitled to benefit of for full exemption on condition No. 5. The declaration of “crude palm oil (edible grade)” given by the petitioner is in conformity with the serial No. 30 of exemption notification and thus, no fault can be found from such declaration given by the petitioner. [Para 16]

       Apart from the aforesaid facts, it appears that pursuant to the decision of the Calcutta High Court in the case of Gokul Refoils Solvents Pvt. Ltd. [Supra], the Customs authorities itself have found that the consignment in question having more than 10 acid value is fully exempted from duty. It appears that the Committee of Commissioners has decided not to challenge the said order. Such being the position, there is no justification on the part of the Revenue to take a different view in the consignment involved in these writ-applications. [Para 17]

       Court, therefore, hold that in the cases before us, there was no justification for detention of the goods and issue of show cause notice by the Revenue. We have already pointed out above that in the course of hearing of these writ-applications, the Revenue modified its earlier stance by accepting that they are not claiming that the goods in question is prohibited one but restricted their contention to the question of applicability of the exemption notification only. [Para 23]

       Court, hold that crude palm oil imported, which falls within Serial No. 1511 having acid value of more than 4, is entitled to get benefit of exemption of duty, and such exemption cannot be taken away by adding to the words in the notification as “ between 4 and 10”. [Para 24]

       Law Laid Down :

       The interpretation of an exemption notification should be as far as possible liberal, to the language thereof provided no violence is done to the language employed.