C.C.E.C. ST., VISHAKHAPATNAM versus JOCIL LTD.

Citation: [2010] 14 S.C.R. 1048 · Decided: 15-12-2010 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
c 
(2010) 14 (ADDL.) S.C.R. 1048 
C.C.E.C. & ST., VISHAKHAPATNAM 
v. 
JOCIL LTD. 
(Civil Appeal Nos. 6979-82 of 2009) 
DECEMBER 15, 2010 
[DR. MUKUNDAKAM SHARMA AND 
ANIL R. DAVE, JJ.] 
Customs Tariff Act, 1975: 
Classification -
Tariff Item No. 38 23 11 12 - Palm 
Stearin imported by respondent during the period August 
2003 and November 2004 - Held: Classifiable under Tariff 
Item No. 38 23 11 12 and not under Tariff Item No. 15 11 90 
0 
90 - The product imported was non-edible - For goods to fall 
into Chapter 15, there has to be the element of "edible oil" -
Non-edible industrial grade oil cannot be brought within the 
ambit of Animal or vegetable "edible oil" falling under Chapter 
15. 
E 
First Schedule; General Rules for Interpretation - Rule 
3(a) - Held: Heading which provides the most specific 
description shall be preferred to headings providing a more 
general description. 
F 
HSN Explanatory Notes - Classification - Held: If the 
goods answer to a description which more clearly identifies 
them, that description is more specific - Interpretation of 
Statutes. 
Interpretation of Statutes: Excise and custom tariff 
G headings - Classification under - Held: The headings are of 
paramount importance - HSN Explanatory Notes state that 
the headings are expected to cover the broad ambit of 
classification since it is impossible to cover all the goods 
H 
1048 
C.C.E.C. & ST., VISHAKHAPATNAM v. JOCIL LTD. 1049 
specifically in titles -
Customs Tariff Act, 1975 - HSN 
A 
Explanatory Notes. 
The question which arose for consideration in the 
instant appeals filed by the revenue was whether the 
CESTAT was justified in holding that the Crude Palm 
8 
Stearin imported by the respondent during the period 
August 2003 and November 2004 was classifiable under· 
Ch. Sub Heading No. 15 11 90 90 and not under Tariff Item · 
No. 38 23 11 12 of the Customs Tariff Act, 1975. 
Allowing the appeals, the Court 
C 
HELD: 1. Chapter 15 of Customs Tariff Act, 1975 · 
covers palm oil and its fractions, which may be refined · 
or unrefined, but the critical condition is that the product · 
must not be chemically modified. The argument that palm · o 
stearin, a fraction of palm oil, being comprised primarily 
of triglycerides of fatty acids should be classified in 
Chapter 15 by way of exclusion from Chapter 38 which 
covers industrial carboxylic acids (or in other words, free 
fatty acids) is compelling, but not decisive. This argument · E 
stems from the interpretation favoured in Rule 3(b) of the 
General Rules for the interpretation of the First Schedule 
to the Customs Tariff Act, 1975, wherein the essential 
character of the subject matter determines its 
classification. [Para 11] [1058-G-H; 1059-A-B] 
F 
2. Rule 1 of the General Rules of Interpretation 
specifically state that "the titles of Sections, Chapters and 
sub-Chapters are provided for ease of reference only; for 
legal purposes, classification shall be determined 
according to the terms of the headings and any relative 
G 
Section or Chapter Notes and, provided such headings 
or Notes do not otherwise require, according to the 
following (subsequent) provision:" The headings are of 
paramount importance, and as the HSN Explanatory 
Notes state, the headings are expected to cover the 
H 
1050 SUPREME COURT REPORTS [2010) 14 (ADDL.) S.C.R. 
A broad ambit of classification since it is impossible to 
cover all the goods specifically in titles. The title of 
Chapter 15 reads "Animal or vegetable fats, oils, waxes, 
etc." For goods to fall into Chapter 15, there has to be the 
element of "edible oil". Non-edible industrial grade oil 
B cannot by any stretch of imagination be brought within 
the ambit of Animal or vegetable "edible oil". However, 
Rule 3(a) of the General Rules of Interpretation stipulates 
that the "heading which provides the most specific 
description shall be preferred to headings providing a 
c more general description". While it is not practicable to 
lay down hard and fast rules to determine which heading 
is more specific, the HSN Explanatory Notes state that if 
the goods answer to a description which more clearly 
identifies them, that description is more specific where 
0 
the identification is less complete. In the case at hand, the 
subject matter in question is specifically identified in Ch. 
Sub Heading No. 38 23 11 as "Palm Stearin", and further 
differentiated as "Crude" and "RBD" in Sub Heading 
Nos. 38 23 11 11 and 38 23 11 12 resp

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