PER: M.M. PARTHIBAN

This appeal has been filed by the Commissioner of Customs, Nhava Sheva-I Customs Commissionerate, JNCH, Nhava Sheva (herein after, referred to as ‘the appellant’), pursuant to the directions given by the Committee of Commissioners of Customs consisting of Commissioner of Customs, NS-II and Commissioner of Customs, NS-I directing that in terms of sub-section (2) of Section 129A of the Customs Act, 1962 to file an appeal assailing the Order-in-Appeal No. 1024(Gr.I&IA)/2024(JNCH)/ Appeal dated 31.07.2024 (herein after, referred to as ‘the impugned order’, for short) passed by the Commissioner of Customs (Appeals), JNCH, Nhava Sheva, Mumbai Zone-II. In the impugned order, learned Commissioner (Appeals) had set aside the assessment order passed by the original authority in denying the benefit import duty exemption on the impugned goods and allowed consequential relief to the respondent importer.

The brief facts of the case are that the respondent herein had imported various oils viz., ‘Peanut (Arachis) Oil refined (edible grade)’; ‘Sunflower Oil refined solvent extracted (edible grade)’; ‘Walnut Oil refined (edible grade)’; ‘Almond Oil refined (edible grade)’; ‘Macadamia nut oil (edible grade)’ by classifying it under Customs Tariff Item (CTI) 1508 9091/ 1512 1910/ 1512 9091 and ‘Candelilla Wax refined in pastilles’, declaring classification under CTI 2712 9090 in the Bill of Entry (B/E) No. 3448686 dated 12.05.2024. The goods were imported from M/s Gustav Heess GMBH, Germany and the respondent importer had sought clearance of goods from Customs authorities claiming customs duty exemption under Serial No. 64 and 71 of the Notification No.50/2017-Customs dated 30.06.2017. The self-assessed B/E was scrutinised by Faceless Assessment Group (FAG) at Kandla Port and they had observed that there is big difference in the value of goods, and as per declared use being hair oil, skin care products, there is mis-declaration in the imports and thus forwarded the B/E for scrutiny by Port Assessment Group (PAG), Nhava Sheva Port.

On scrutiny of the import documents, perusal of the submissions made by respondent importer and after providing an opportunity for personal hearing, the Deputy Commissioner of Customs, Appraising Group I & IA, NS-I, JNCH, Nhava Sheva had rejected the self-assessment made by the respondent importer by denying the exemption benefit claimed under Notification No.50/2017-Customs dated 30.06.2017, in passing an order under Section 17 (4) of the Customs Act, 1962. Being aggrieved with the order of the original authority, respondent importer had preferred an appeal before the Commissioner of Customs (Appeals). In the appeal proceedings, learned Commissioner (Appeals) had set aside the order of the original authority and allowed the benefit of customs duty exemption to the respondent importer vide Order-in-Appeal dated 31.07.2024. Feeling aggrieved with the said Order-in-Appeal dated 31.07.2024, which is impugned herein, the appellant department have filed this appeal before the Tribunal.

Learned Authorized Representative (AR) for the department had submitted that the imported goods is required to fulfil two conditions as provided under Serial No. 64 and 71 of the Notification No.50/2017-Customs dated 30.06.2017, in order to claim exemption from payment of Customs duty. He further stated that while the imported goods are covered by the specific chapter heading/CTI mentioned therein, since the goods have been declared by the respondent themselves being “for use in other than food”, the imported goods do not satisfy the essential condition of ‘edible grade’ as defined in the supplementary note to chapter 15 of the First Schedule to the Customs Tariff Act, 1975.

He further stated that in terms of CBEC Circular No.40/2001-Customs dated 13.07.2001, the term ‘edible oil’ means vegetable oils and fats for human consumption, and therefore he claimed that imported oils used for cosmetic, pharmaceutical use will not q