Bombay Oil Industries v. Collector Of Customs, Bombay

[Order per : H.R. Syiem, Member (T)]. - These 10 appeals had their origin in two orders of the Appellate Collector of Customs, Bombay. One order is S/49-1895/78 R & eight others dated 14-2-1980 and the other S/49-1891/78 R, dated 15-12-1980. The second order is an echo of the first order dated 14-2-1980 and so in effect we can deal only with this (first) order. The order of the Appellate Collector went in favour of the following importers who filed 8 appeals :

M/s. Greaves International Limited

M/s. Dadlani Silk Stores

M/s. Rajendra Oil Mills (two appeals)

M/s. Hyderabad Asbestos Cement Products Limited

M/s. Metro Exporters

M/s. Britannia Biscuits Co. Limited

M/s. Rallis India Limited

2. For the imports by Bombay Oil Industries (2 consignments) the Appellate Collector decided in favour of the Custom House.

3. The Government of India considered that the Appellate Collector was wrong in the decisions he took in favour of the importers. So it issued notices F.No. 380/21/80-Cus.II, dated 4-8-1980 and F. No. 380/155/80-Cus.II, dated 7-8-1981 under Section 131(3) of the Customs Act, 1962 to the importers asking them to show cause why the Appellate Collector’s order should not be annulled or modified.

4. Bombay Oil Industries who had lost their appeals before the Appellate Collector have filed appeals against the order.

5. This is how we have these cases before us. Eight case arise from the notices of review issued by the Government of India and two are appeals filed by Bombay Oil Industries.

6. The companies were concerned with the import of tallow for which they claimed concession of duty under Notification No. 141/76-Cus., dated 2-8-1976. This notification exempted tallow with certain specifications; it is reproduced below : -

“In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts tallow having the specifications mentioned hereunder, and falling under Sub-heading No. 2 of Heading No. 15.01/06 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from payment of so much of that portion of duty of customs leviable thereon which is specified in the said First Schedule as is in excess of 15 per cent ad valorem.

7. When the goods were tested by the Customs they were found to fail in the colour specification under Item (ii) of the notification though they qualified in all the other specifications. As a result, the exemption was denied to the importers and this gave rise to appeals before the Appellate Collector.

8. It needs to be said rightaway that the Appellate Collector decided that the failure of the samples of tallows to meet the colour specification was due not so much to the quality of the tallow as to the fact that the tests had not been carried out by the Custom House in accordance with the procedure he thought should have been adopted. In order to do so, he discussed in a long and very detailed order why the specifications of colour of the Notification No. 141/76 Cus. ought not to have been tested in the way Custom House did. He began by tracing the origin of the specifications in the notification to IS 887. This standard was first published in 1960 and underwent one or two modifications. In the 1968 edition this standard had the following indications for animal tallow -

9.  The 1977 edition carried the following table -

10.  The Appellate Collector noted that the specifications given by Notification No. 141/76-Cus. were word for word and figure for figure lifted from the 1968 IS - 887 for Type-I and this is true enough. In his order he traces the history of IS 887 and, eventually, concludes that Type-I IS 887 1968 which was incorporated in the Notification 141/76 -Cus. was a standard specification for mutton tallow used in the textile industry and Type-II of the same standard was for other mixed animal tallows. This also appears to be accurate enough. The Appellate Collector recorded that sampling was done by the method prescribed in IS 548 in accordance with which no bleaching preceding the test is prescribed for the purpose of testing of colour. The Custom House, he says, followed the drawal of sample and testing of colour in accordance with this standard and this also appears to be correct.

11.  It is because he questions the method of testing and sampling conducted in accordance with IS 548 that doubts began to assail him, for reasons we shall see below.

The main reason is that he said the tallows imported were not mutton tallows. In his own words; “it is very reasonable to assume that goods imported from America and Australia are definitely not pure and simple mutton tallow. It is reasonable to assume that it is largely other than mutton tallow and, at any rate, it is largely beef tallow with small mixture of mutton tallow. It is, in my opinion, therefore, entirely wrong thing to conduct the test as per IS 548 when the goods imported are something other than what IS 887 are, on which, in fact, the notifications specifications are based“. He stated in his order that the major quantity of tallow produced in America and Australia was beef tallow and since the quantity of mutton tallow produced there was small it was generally mixed with beef tallow. But since the tallow imported was not mutton tallow for which the specifications of IS 887 had been designed and since IS 548 which prescribed the method for sampling and testing did not require prior bleaching of the sample before colour testing, he formed the opinion that it was wrong to apply to goods which he had convinced himself were beef tallow, specifications and method of testing meant for mutton tallow. He said that the colour of most of tallows except mutton tallow was too dark to be read on the Lovibond scale and, therefore required prior bleaching.

12.  He quoted with evident approval the recommendation of the American Fats & Oil Association specifications and the testing methods recommended by the American Oil Chemists’ Society, the reason being that since the goods were not Indian tallow for which the IS 887 and IS 548 were designed but foreign tallow and most probably beef tallow, it was reasonable to say that the standard of the tallow should be gauged in accordance with the grades or standards prescribed by the American Fats & Oil Association. He reasoned that the specifications of export grade tallow by American Fats & Oils Association do not attach as much importance to the colour value of tallow as to F.A.C. (Fats Analysis Committee) and other values.

13.  The American Oils Chemists’ Society’s publication the A.O.C.S. Official Method Cc 8d-55, Formerly Cc 8d -53, corrected 1958 defines the method for Refined and Bleached colour, and says “this method determines the colour of the sample after treatment with alkali and a specified bleaching earth ”. It goes on to indicate that it was applicable to tallows and greases intended for soap production. This publication specifies in great details the apparatus and supplies for use, the. preparation of sample, method of determination of the free fatty acids and the actual procedure of testing. For bleaching it prescribes sodium hydroxide solution 0.25 N, accurately standardized and sodium hydroxide 20°Be prepared as directed in A.O.C.S. Official Method Ca 9a 52, B,3 and specially denatured alcohol. The Appellate Collector said that if this method as understood by people who prepare and ship the mutton tallow is not adopted for sampling and testing, the goods are bound to fail to meet the specification of the notification since the notification is designed for different kinds of products. He ordered that the samples should be tested for colour only after refining and bleeching in accordance with the A.O.C.S. Official Method Cc 8d-55. The appeals by Bombay Oil Company were rejected because the Appellate Collector found that they had described their goods as bleachable fancy mutton tallow. From this he concluded that the method of sampling and testing prescribed by IS 548 and 887 were perfectly in order for this importer and since the samples failed to meet the colour test, the goods did not deserve to get the exemption.

14.  Much arguments were put forwarded by the contending parties before this Tribunal. The arguments started off by the learned Counsel for the government, Mr. A.S. Sunder Rajan, saying that it was preferable that he should begin to address as most of the appeals were departmental appeals. The learned Counsels for the importers had no objection to this.

15.  Mr. Sunder Rajan attacked the Appellate Collector’s order by saying that he started out with a pre-conceived mind and had already decided to allow the appeals except the two appeals by M/s Bombay Oils. The Appellate Collector was, therefore, prejudiced. He quoted Writ Petition Nos. 1400 to 1403 of 1976 : Coromandal Fertilizers v. Union of India [1979 (4) E.L.T. (J 501) (A.P.)] in which the High Court of Andhra Pradesh decided that rules and notifications issued under taxing statutes are to be understood strictly.

16. It is the importer who is to prove that he was qualified for exemption, said the learned Counsel, and quoted 1981 ECR 265. None of these parties has produced evidence to prove that their tallow qualified under all the specifications. This Tribunal is not concerned with the history of the notification or of the Indian Standard specifications. It is concerned only with the law as it is before it and the language used in that law. There is no room for any intendment in reading a statute as would be seen from the judgment of the Supreme Court in Hemraj Gordan Das v. Assistant Collector of Central Excise [1978 (2) E.L.T. (J 350) (S.C.)]. He also quoted in support of his argument the Supreme Court’s judgment in Dunlop India and Madras Rubber Factory v. Union of India; Civil Appeal Nos. 1446 and 2746 of 1972 [ (S.C.)]. He said that there was no equity in a taxing statute and this is proved by the ruling of the Delhi High Court in Modi Rubber Limited v. Union of India (C.W.P. 1773 of 1979 with other Civil Writ Petitions of 1981) [ (Del.)]. The learned Counsel said that the parties admit that the colour specification was not satisfied for the tallows. He referred to order of the Tribunal 505 to 515/83-C interpreting Notification No. 115/73.

17.  The learned Counsel criticised the part of Appellate Collector’s order in which he said that the goods should be tested now in accordance with the A.O.C.S. Official method of testing of colour when he knew that the consignments had all been cleared out of charge and he would know, therefore that such an order was no longer capable of implementation.

18.  On behalf of the Greaves International Limited, Dadlani Silk Stores, Rajendra Oil Mills and Refinery and Hyderabad Asbestos Cement Products Limited, their learned Counsel Mr. S.D. Nankani, Advocate, said that the whole confusion arose from taking the specifications with the method of determining the specifications. The notification lays down the specifications but not the method by which the specifications were to be tested. The Custom House followed the method of sampling and testing prescribed by IS 548. This was not contemplated by the notification and there was no warrant for this procedure being adopted. Furthermore, the notification prescribed 1" Lovibond cell. But the Custom House employed a 1/2" cell. The correct method for sampling and testing the colour is the A.O.C.S. method as the most preferable for testing these tallows. The Indian Standard was applicable only to goods produced in India. It cannot be expected that foreign goods would meet the specification of Indian standard. For one thing, the foreign producer would not know of the specifications of the Indian standard. The learned Counsel, therefore, argued that the colour testing should be done only after refining and bleaching as recommended in the A.O.C.S. method. He disputes the Custom House claim that the goods do not conform to the colour of the notification. The colour will be found to conform to the notification specification if the A.O.C.S. method endorsed by the Appellate Collector is adopted. It is not correct to say that refining and bleaching in accordance with the A.O.C.S. method involves removal of colour. They are meant only to remove impurities; there is no bleaching. In any case, in a matter of international trade, the department should follow international testing procedures.

19.  The review notice implicitly admits that if the A.O.C.S. method is adopted the goods would pass the colour test. The government itself has discarded the Indian standard as can be seen from the review notice. The department should accept certificates of analysis from the foreign shippers produced at the time of clearance as the certificate is based on the method of testing in accordance with the known and accepted international standards in export trade. The department says that the Appellate Collector’s order cannot be implemented because the goods have already gone out of charge. But this is not the importers’ problem and they should not be deprived of the exemption because of this difficulty of the department.

20.  The learned Counsel continued his argument to say that the notification was intended to give relief to the assessee; its object should not be frustrated by the quibbling of the Custom House. It was not correct to say that the Appellate Collector had made up his mind in advance. The learned Counsel said that the department’s Counsel had quoted a judgment in which the Tribunal decided that the denial of the notification of exemption was justified in a case in which the consignment of fertilizer did not meet the test relating, among other things, to moisture content. He said that this is hardly an argument because it is not known what method is specified. He quoted the Supreme Court’s ruling in the Dunlop case that trade understanding should be relied upon for the purpose of interpretation. There was ambiguity in the notification and the Appellate Collector had given an order that merely showed a correct and proper interpretation.

21. On behalf of M/s. Rallis Mr. A.N. Haksar, Advocate, said that he would adopt the argument put forward by the learned Mr. Nankani. He said that Notification 141/76-Cus. was silent on the method that should be adopted in testing. Therefore, the method that is best suited to give the most suitable and proper effect to the notification should be adopted. There is no doubt that the method which the Appellate Collector recommended for adoption in the testing for colour, namely, A.O.C.S. (American Oils Chemists’ Society) was such a method. A certificate of analysis had been given by the J.B. Boda Marine & General Survey Agencies Private Limited. It would be seen from this that the colour of their tallow was 34 on the lovibond 1" cell. It would be noted further that the colour was lighter when the sample was tested after refining and bleaching. From 34 expressed as the Y+5R, it came down to a low 5.5 after refining and bleaching. He submitted that Indian standard 548 did not take into account the fact that there might be a buyer and a seller as in the present transaction.

22. On behalf of Metro Exporters, learned Counsel Mr. Venketaraman, Advocate, said that the show cause notice of the Government of India was wrong. The Appellate Collector merely advocated the adoption of A.O.C.S. method. He did not say that the colour should be removed first, but only that colours not necessary for test should be removed before the test as they will darken the yellow and the red. The government is wrong to say that the notification talks only of tallow. The notification, it would be noted, was issued under Heading 15.01/06 of the Customs Tariff and this heading specifies animals’ fats and oils. The A.O.C.S. method is restricted to such tallow and it is, therefore, correct to adopt that procedure.

23.  The Counsel said that the notice was issued under Section 131(3) of the Customs Act, 1962 on the recommendation of the Collector. This proves that the government was not satisfied in terms of the section having depended on the recommendations and report of the Collector. The requirements of Section 131(3) had not been met.

24. Mr. Ranjeet Sawhney on behalf of M/s. Britannia submitted that he would adopt the argument advanced by the previous counsels for other importers if they are not inconsistent in their appeals. There was nothing to show that the sample died conform to the specifications of the exemption notification. The test report said the sample conforms to the specifications for tallow as given in the notification except in respect of the colour. This is no test report. The laboratory chemist should record what he saw during the test. Instead, he has given an opinion. It is for the adjudicating officer to decide and form an opinion and not for the chemist who tested the sample to do so. Therefore, no decision can be based on such a test report. The show cause notice is, therefore, invalid. He said whether the A.O.C.S. method was adopted or not, he would like to adopt Mr. Haksar’s argument. The method which gives the best effect to the notification should be adopted.

25.  The Bench then heard the Advocate for M/s. Bombay Oils. The appeals by Bombay Oils failed because the Appellate Collector, in his order, found that Bombay Oils’ goods were mutton tallow. Since he had come to the conclusion that mutton tallow was to be correctly tested in accordance with IS 548 and that the test showed that Bombay Oils’ tallows did not meet the colour specification he ruled against this firm and held that it could not obtain the exemption.

26.  The learned counsel for the importer M/s. Bombay Oil began by saying that the action of the Assistant Collector was wrong and that they had been denied natural justice. No notice was given to them by the Assistant Collector before he rejected their refund claim. In this way they did not have a full and adequate opportunity to defend themselves and present their case. There was no personal hearing. The Appellate Collector apparently had prejudged the case and made up his mind to reject their claim for refund.

27.  In answer, the learned Counsel for the department agreed and said that the Appellate Collector had prejudged the case but he said that the Assistant Collector could not but reject the claim because the refund was asked by M/s. Bombay Oil under Notification 168/78-Cus., dated 12th September, 1978 and this notification was not applicable because it could not have been applied retrospectively. The Assistant Collector, therefore, had to reject it.

28.  The learned Counsel for Bombay Oils answered that 168/78-Cus. was quoted in the refund claim because the 1976 notification had been shown to be a mistake. But it was the notification which, by amending the 1976 notification placed the exemption in its truest terms, was the correct notification. It was not an amendment but a rectification of an error and must be read as the real notification from the beginning i.e. from 1976. He also said that the only way to make a test for these goods was to take out first the blue and the green. It was only then that true colour test can be made which would meet the technological and scientific specification for tallow. The test report showed nothing about the determination of the colour.

29.  He quoted a number of judgments and decision : AIR 78 Supreme Court 597 : Meneka Gandhi v. Union of India; Order No. A-603/83, dated 1-12-1983 : Food Corporation of India v. Collector of Customs, Bombay; Order No. 362/Cal/83-2203, dated 19-9-1983 : Duncan Agro Inds. v. Collector of Central Excise, Calcutta [ (Tri.)]; Order No. 3/Cal/84-78, dated 7-1-1984 : S.G. Aswani v. Collector of Customs, Calcutta [ (Tri.)]; Order No. 4/1984 B, dated 4-1-1984 : Steel Rolling Mills of Bengal v. Collector of Central Excise, Calcutta [ (Tri.)]; Civil Appeals Nos. 1862 and 1868 of 1967 Supreme Court : Collector of Central Excise, Shillong v. Sanawar Mal Purohit [1979 (4) E.L.T. (J 613) (S.C.)]. These decisions and judgments, said the learned Counsel, would show that natural justice must be fully extended to a citizen in order to enable him to present his side of the case wherever any decision is taken effecting his interest. They also established that the Tribunal in some of these decisions took the view that when there has been a denial of natural justice, the case can be remanded for a fresh look into the matter. They also underlined the need when any evidence is ignored or a cross examination of a vital witness is denied, there can be said to have been denial of natural justice and the matter can be remanded for observing the principles of judicial practice and to afford the affected party a full opportunity. In another judgment, the Tribunal held that since the chemical examiner’s report had not been supplied that report cannot form the basis of findings and that such a report should be excluded. In AIR 78 judgment, the Supreme Court observed that no one shall be judged unheard as this was a part of natural justice. This importer was denied his due rights without hearing by the Assistant Collector and, therefore, all proceedings that were the basis of that decision were afflicted by the sickness of injustice. The learned Counsel argued that there was sufficient case for remanding this matter to the Assistant Collector for a fresh hearing so that the party is afforded full opportunity to present his case. He pointed out that all material evidences in his case were the same as the evidences and details and particulars of the other consignments. Unless he is given the same treatment it would amount to discrimination.

30. The learned Counsel for the department pointed out that in some cases the goods were actually mutton tallow although this fact is shown only in respect of importation of Bombay Oil. M/s. Britannia, in their revision application to the government, have scored out the word ‘mutton’, evidently thinking that this would help their case. The importation by M/s. Rajendra, similarly, shows that their tallow was mutton tallow. He said that the notification under which these claims for exemption were made expresses the colour in terms of Y + whereas the A.O.C.S. expressed the colour only as ‘R’. There is nothing to connect the one with the other. Indian standard 887 may have been for tallow but IS 548 gave the sampling and IS 887 itself in its specifications table required that the method of testing was to be made with reference to IS 548 and that the sampling also should be drawn as prescribed in IS 548. The parties complain about the colour specification test result but accept the findings of the Custom House for other specifications. This is inconsistent. Except Britannia, we do not know if the certificates of test given in foreign countries were produced; but we are concerned here not with what happened in the foreign countries but with the taxable event and that event took place when the goods were imported into India at the port of Bombay. It is these goods imported at Bombay that must conform to the notification if they want the exemption. The Notification 168/78-Cus. cannot be given retrospective effect. The notice of review issued by the government is not vitiated because it was issued on the Collector’s recommendation.

31. Bombay Oil did not question the test result. It has to be borne in mind always that the Custom House has no duty to test; it is for the importer who claims an exemption to satisfy the custom house that he was qualified for it. As far as the test report and examination of the chemist is concerned - raised by Bombay Oil - if the importers were aggrieved they should have raised the question at the beginning. They have done so only now and it is too late to go into this question. He said that the appeals of the department in respect of all the importers should be allowed while the appeal by M/s. Bombay Oil should be dismissed.

32. Voluminous and learned arguments were advanced by both sides, to say nothing of the long orders of the Appellate Collector. What appears to have been lost sight of by most parties to the dispute is that the Notification No. 141/76-Cus. makes no distinction between mutton tallow, beef tallow and other animal tallow. The Appellate Collector was correct when he said that the notification for tallow agreed in all details with the specifications given by IS 887/968 for Type-I; it does appear, therefore, that standard Type-I specifications were originally meant for mutton tallow. But what he overlooked was that when the customs notification was promulgated in 1976 it did not specify whether it was for mutton tallow or beef tallow or vegetable tallow. It was only tallow that was exempted. The learned Counsel for M/s. Metro Exporter said that the notification was issued under Heading 15.01/06 of the Customs Tariff and this heading covered animal tallow and, therefore, the tallows covered by the exemption notification should be also animal tallow as the notification was issued under this heading. There need not be too much dispute about this and nobody has said that the tallows were anything but animal tallow.

33. The Appellate Collector reasoned, however, that these were beef tallows because he said that the major quantity of tallow, produced in America and Australia was beef tallow and that the quantity of mutton tallow produced in these countries was small, and, at any rate, was mixed with beef tallow. He accordingly, said that “it was very reasonable to assure that the goods imported from America and Australia are definitely not pure and simple mutton tallow. It is reasonable to assume that it is largely other than mutton tallow and, at any rate, it is largely beef tallow with small admixture of mutton tallow”. For these reasons he said that in his opinion it was entirely wrong to conduct the tests as per IS 548 when the goods imported were something other than IS 887 Type-I. He had already come to the conclusion that Type-I of IS 887 referred to mutton tallow for the textile industry. The Appellate’ Collector is evidently quite right in this. The goods, for all we know, may indeed have been largely or even purely beef tallow. But to say as the Appellate Collector did that Notification 141/76-Cus. must cover only mutton tallow, because this type carries the same specifications as the specifications for mutton tallow given in 1968 is in our opinion assuming more than can be justified from the pure terms of the notification. We cannot overlook the fact that the exemption notification speaks only of tallow. Unless we assume that the existence of beef tallow was unknown to the law makers or had not been taken into account by them we cannot arrive at the conclusion that the Appellate Collector did. It is well known that in other countries i.e. European countries and the western hemisphere and Australasia, beef and beef products are common commodities and that they are widely used not only in industrial processes but as food. To proceed as if the only tallow that can come from western countries must be beef or mutton tallow would go against well known habits and practices in those countries. Therefore, when we look into the exemption notification and do not find that it distinguishes between mutton tallow and other kinds of animal tallow, it is safe to hold that it is meant to be the specifications for all tallows whether beef or mutton. The Appellate Collector, in our opinion, was carried away by old history; he did not give sufficient weight to the fact that the notification specifies a number of properties that the tallow needs to have to be given exemption of duty in excess of 15%. It is not that it acts to ban to all tallows - all it does is to provide an exemption to such tallows as qualify and meet the specifications enlisted in it. It may be that some tallows will meet the requirements of exemption notification and some will not. But this is not sufficient to say that all tallows must, so to say, qualify for the exemption.

34.  It is not to be overlooked that mutton tallow is produced in western countries and beef tallow is not the only tallow one can find there. What would be the position if one importer imports mutton tallow and another, beef tallow, from America ? That only the mutton tallow should be allowed to pass under the notification because the notification corresponds more closely to specifications for mutton tallow? We think that the more reasonable interpretation would be to say that of the two tallows only the tallow that meets the specifications must pass and the other must not.

35.  The fact of one being mutton and the other beef should not alter this interpretation. To do what the Appellate Collector did would be to substitute one’s judgment for legislation and this can be very dangerous. Even if one thinks there is a serious flaw or mistake in the law, one cannot alter it to fit one’s notions of what it should be or ought to be. We must go only by the words of the law - not more and not less. To do either can yield farreaching and unexpected results. A defect in the law is only for the lawmaker to rectify. But the clear terms and words of the law must be implemented as they are, warts and all. It has been argued by some people that the subsequent amendments to this notification showed that the colour specification was an error and that the error be removed. We are ready to accept the truth of this exposition but we cannot, for that reason, agree to ignore the colour specification when it was a part of the law.

36.  We reiterate our belief that the colour specification could have been satisfied if the tallow had been of the right kind. We cannot say what the right kind should have been. All we need say is that there is and must be a tallow that can satisfy all specifications including the colour specification, as one can see from the A.O.C.S. official method and the Indian standard that tallows can and do conform to, among other things, colour specifications. It all depends of what the colour specification is. According to the Appellate Collector the colour specification for beef tallow should be read as meaning that colour test should be conducted after bleaching as the tallows are too dark to be read on the Lovibond scale. He approves the A.O.C.S. official method Cc 8d-55 saying that the colour of the sample has to be determined after treatment with alkali and a specified bleaching earth and that it was applicable to tallows. This brings us to a contradiction in the Appellate Collector’s dissertation. He reasoned that Type-I of IS 887/68 from which the specifications of the Notification 141/76-Cus. were taken was meant for mutton tallow. He also quoted from IS 887 of 1977 to show that Type-I was meant primarily for the textile industry. It follows that Type-I is meant for mutton tallow for the textile industry and the Appellate Collector was of the opinion that since the mutton tallow imported in these consignments were beef tallows they should receive certain conditioning in order to meet what he thought was the circumscription of Notification l41/76-Cus. The A.O.C.S. official method, which the Appellate Collector thought should be followed since these tallows were, according to him, beef tallows or mixed tallows, required prior treatment before the colour test. But this method which the Appellate Collector favours is a method for testing applicable to tallows and greases intended for shop production. The heading under ‘scope’ says “ Applicable to tallows and greases intended for soap production ”. We have not been able to understand why, because the tallows are beef tallows, they should be colour treated in order to meet the specifications of A.O.C.S. method of testing. We should have thought that whether they are beef tallows or mutton tallows, the only natural conclusion one should arrive at was that they should qualify under the exemption notification only if they pass all the specifications.

37.  It does appear that the imports were mutton tallow or at least had been described as mutton tallow although in some other cases there is no clear evidence for saying what kind of tallows they were. We are assured only that they are all animal tallows. Some importers claim that they have testing reports from foreign countries to show that their tallows met the international specifications and this should satisfy the Customs. We are unable to follow this argument. It may well be true that the tallows met the international standards of tallow in the trade and that the consignments fully answered the A.O.C.S. standards, but this is not a factor that can have any effect in this dispute because when the importers placed orders they would have known the exemption notification under which they would like the goods to be passed carried certain conditions which had to be fulfilled. If, as things have turned out, their goods did not satisfy one of the exemption notification conditions then the only thing to do is to deny them the exemption. We cannot bend the notification to fit the goods so that they are given the exemption.

38.  A point was made in respect of analytical certificate given by J.B. Boda Marine & General Survey Agencies Private Limited that when the tallow was tested for colour after refining and bleaching it showed a Y + 5R reading of only 5.5 to 6.2 on the Lovibond 1" cell. The unbleached tallow showed a reading of 35-36. It was quite clear from this, so the argument ran, that the colour test was meant to be done after refining and bleaching and was not meant to be done crude. What this argument overlooks is that the unbleached crude tallow on the same Lobinond 1" cell showed a Y + 5R reading only 34 to 36. The Appellate Collector had said that beef tallow was too dark to be read on the Lovibond cell unbleached.

39.  It is worth recording here that all the tallows meet all the specifications of the notification except the colour. This can mean only one thing and that is that they have more things in common with the kind of tallow specified in the notification than otherwise. That they do not meet the colour specification is, however, a fact in respect of all the importations and this has not been disputed by the importers. They merely say that they would have met this colour specification also had the test been made in accordance with what they say was the correct method, that is, the method favoured by the Appellate Collector, viz. The American Oil Chemists’ Society. It is possible that if the samples had been first refined and bleached, they would have shown colour reading of 5 - 6 on the Lovibond 1" cell.

40.  A surprising proposition was made that in the absence of any report saying the goods were not covered by the notification, certificates produced by the importer should be accepted. It is not possible to go into this at this time and stage.

41.  Much was made by the importers’ counsels of the fact that the learned Counsel of the department argued that the samples were no longer available and it would notice possible to test them as directed by the Appellate Collector. The importers said that this was not their fault and they cannot be made to pay for this. But we do not think there is any need to labour this point because we do not favour a retest of the goods on the lines preferred by the Appellate Collector. If there was any dispute on the method of test by the custom house laboratory, the importers should have taken immediate counter-action, but they let it go, evidently because of the relief they obtained in appeal. They cannot agitate the matter now before us.

42.  We are, therefore, of the opinion that the Appellate Collector’s order was wrong and ought to be set aside in respect of the 8 appeals of the importers and we order accordingly.

43.  We also reject Bombay Oil’s two appeals. They wanted remand of the case to the Assistant Collector, but we can see no point for it at this stage. It is not as if the Assistant Collector can retest the goods. It is not as if, this is the only consignment that had not met the colour specification. There were others. Our order in respect of other importers and in respect of Bombay Oil brings all importers on the same footing and there would be no cause for complaining that they had been discriminated against. We agree with the learned Counsel for the department that M/s. Bombay Oils’ argument that they had not presented their case properly and that when they asked for Notification 168/78-Cus. they had vitiated their claims. There was no attempt by M/s. Bombay Oils’ to challenge before the Assistant Collector or to ask for retest when they found that the test report went against them in respect of colour.

44.  Much of the arguments presented before us on behalf of the importers were not really relevant. The procedure prescribed in A.O.C.S, does not, as far as we can see, possess any higher virtue over the procedure adopted by the custom house in testing. The point that has to be constantly borne in mind is that the tests in all the cases showed that the samples agreed with all the specifications but one. It has also to be borne in mind that all the consignments failed in respect of the same specification, i.e. colour. We cannot easily brush aside the custom house finding that the goods did not conform to the specifications in respect of colour. It is remarkable, in fact, that so many consignments should pass in all specifications and fail in the same test, colour. There is no doubt in our minds that the tests were carried properly and were conducted in accordance with scientific principles and that there was nothing wrong in the findings of the laboratory. If anything the convergence of the test results for all the samples enforces our belief that no fault can be found with the manner of testing.

45.  One of the importers argued that the notice of the government to review the Appellate Collector’s finding was improper because it was issued on the recommendation of the Collector. We can see nothing in the procedure to vitiate the notice. The only thing that will vitiate it is evidence that the notice issuing authority was not satisfied in the manner prescribed by law. Such evidence has not been placed before us and we, therefore, reject this argument.