2025-VIL-1225-GUJ-CU
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CUSTOMS High Court Cases

Custom – Eligibility to duty exemption to import of Crude Palm Kernel Oil edible grade under Notification No.12/2012-CUS, end-use requirement – Petitioner imported "crude palm kernel oil edible grade" under CTH 15132110, declaring it as Crude Palm Kernel Oil (Edible Grade) and paid NIL rate of duty under Notification No. 12/2012 and earlier Notification No. 21/200 – Dept issued a show cause notice alleging that the petitioners wrongfully availed the exemption as the imported oil was not fit for human consumption without further processing - Whether the petitioners are entitled to the benefit of exemption under Notification No. 12/2012 and earlier Notification No. 21/2002 for import of crude palm kernel oil edible grade, despite the fact that it requires further processing to make it fit for human consumption - HELD - The respondents could not have assumed the jurisdiction to issue the impugned show cause notice on the same subject matter considering the end-use of the goods imported by the petitioners which was struck down by the Court being part of the Circular No. 40/2001 - As per the Supplementary Note 1 to Chapter 15 of the Customs Tariff Act, "edible grade" refers to the standard of quality specified in Appendix B to the Prevention of Food Adulteration Rules, 1955 (now substituted by Regulation 2.2.1(21) of the Food Safety and Standards Regulations, 2011). The test reports submitted by the petitioners showed that the imported crude palm kernel oil conformed to the prescribed standards, and therefore, it qualified as "edible grade" irrespective of whether it required further processing to make it fit for human consumption - The benefit of duty exemption is admissible so long as oil imported is of edible purpose as the term “vegetable oils of edible grade” will cover the vegetable oils which are fit for human consumption at the time of import as also vegetable oils which are not fit for human consumption requiring further processing making fit for human consumption. Therefore, moot question to be considered is as to whether crude palm kernel oil imported by the petitioners was of edible grade or not and it is not material as to whether it requires no process or it requires further process to make it fit for human consumption - The respondents' contention that the exemption notification should be read with the end-use requirement was not tenable, as the exemption notification did not impose any such condition. The clarification issued vide Circular No. 29/97-Cus stated that the term "vegetable oils of edible grade" would cover oils that are fit for human consumption at the time of import, as well as those that require further processing to become fit for human consumption - The impugned SCNs are quashed and the petition is allowed
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