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A viscous ghost in a foaming coconut oil case

D. Murali

AN OILY case that recently slid through the Customs, Excise and Service Tax Appellate Tribunal, Mumbai, was that of Pushpanjali Floriculture Ltd. The company had imported two consignments of `refined coconut oil' against Duty Free Replenishment Certificate (DFRC) licence, and sought to use the oil as "antifoaming agent and viscosity reducing agent in the manufacture of white sugar."

Rather than relying on olfactory sense to know what the oil was, the Customs officials sent a sample of the consignment to their lab and conducted tests to confirm, "that the goods are refined coconut oil." But there was a hitch: the report by the Deputy Chief Chemist (DyCC) was silent on "whether coconut oil is used as antifoaming/viscosity reducing agent in the sugar industry, for manufacture of white sugar." He had, however, opined that coconut oil is not a separate chemically defined compound.

To crosscheck, the Department took the view of the Chemical Examiner who said that `nowhere in the literature available' it was mentioned that RBD (that is, refined, bleached and deodorised) coconut oil could be used as antifoaming substance in sugar industry. The company submitted a plethora of documents to clear the cloud in the oil. These included: a certificate from the University Department of Chemical Technology, Mumbai; letter of the National Sugar Institute, Kanpur; another letter from IIT, Bombay; an affidavit of a retired professor of polymer technology and Director of Department of Chemical Technology, University of Bombay; letters from the Sugar Technologists Association of India, and the Ministry of Consumer Affairs and Public Distribution; and an extract from a book titled, Defoaming Theory and Industrial Applications.

However, all that was in vain because the Department denied DFRC benefit to Pushpanjali. The company appealed to the Commissioner, and produced supporting proof once again, but the Commissioner rejected the appeal, saying that DyCC's report was very specific on the issue and that he was unable to accept the `fresh materials'.

After hearing the case, the Tribunal was categorical that the Commissioner had `seriously erred' by disregarding evidence produced by the company. They were not `fresh materials', said Mr S. S. Sekhon of the Tribunal, and added, "The Commissioner has not applied his mind to the facts on record." The Commissioner's order was set aside because his reasons exhibited "a total lack of application of knowledge with a preset mind to dismiss an appeal, without having any reason to do so."

On the report of DyCC, Mr Sekhon observed: "The mere fact of the DyCC's inability and ill-equipped library to locate such literature, will not mean, that there is no literature/material at all, which shows the use of coconut oil as antifoaming/viscosity reducing agent."

There was ample evidence in the documents submitted by the company that coconut oil is used as antifoaming/viscosity reducing agent in sugar industry, said Mr Sekhon, and commented: "The Commissioner appears to have not even read the same."

Rejection of the supporting literature came under more severe criticism from the Tribunal thus: "That indicates a timorous conduct and/or a desire not to allow the clearance. The letter of the Dy Commissioner should not have been issued. If he was in doubt, about the eligibility, after delaying the clearance for months, he should have sought instructions/guidance from his Commissioner and/or issued a show-cause notice denying the assessment as sought. The conduct to shuttle Bills of Entry filed without seeking orders from senior officers leaves a doubt in our minds, that a ghost hand guided the Dy Commissioner... That surely is not sound administration of affairs in the Customs House."

The opinion of the DyCC — that coconut oil is not a separate chemically defined compound — was frowned upon by the Tribunal as being irrelevant and extraneous to the issue, and exhibiting `lack of application of mind or lack of access to standard book on chemistry'.

Coconut oil has been assigned CAS (Chemical Abstracts Service) Registration number in Hawley's Condensed Chemical Dictionary, pointed out Mr Sekhon.

From, you can learn about the chemical composition of coconut oil's fatty acids. These are: Lauric, myristic, caprylic, palmitic, capric, oleic, stearic, and linoleic.

It seems "coconut oil also contains 0.6 to 1.5 per cent unsaponifiables rich in delta-tocopherol and sterols." But that's something the Commissioner would have known if the Department had given him Google to search with.

Excise in surgeon's room

The Bangalore CESTAT had to dissect a surgical problem in the Sarvotham Care case. The company manufactured Iteol-3 and claimed that the product was used by surgeons for sterilisation of their hands and instruments, apart from using it as spray to disinfect the sick rooms and floors.

Excise officials classified the product under a head that read "insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants and similar products". Sarvotham protested that their product was `medicament' like Dettol. The Tribunal observed that the product was used for antiseptic purpose, "to destroy infectious germs or micro-organisms".

A case that helped Sarvotham was the apex court decision in ICPA Health Products where skin disinfectants used for painting the skin before surgery were held to be medicaments. Are there any case-icides to arrest the proliferation of litigation?


"I'm worried that the new Commissioner is a soccer fan!"


"Because he would be looking for penalty kicks all the time."

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