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Regarding scope of the term in loose or bulk form used in the
Notification No. 20/ 99-Cus
Circular No. 14 dated 23rd February 2000
I am directed to refer to the subject mentioned
above and to say that doubts have been expressed in regard to the scope of the
term �vegetable oils (other than coconut oil, RBD Palm Oil, RBD Palm kernel
oil and Palm stearin) of edible grade, [1][1] in loose or bulk form�
used in notification No. 20/ 99-Cus., dated 28/ 2/ 99. This notification, inter
alia, prescribes (at Sl. No. 11) a concessional Basic Customs Duty (BCD) @ 25%
for vegetable oils mentioned therein, of edible grade, if imported in loose or
bulk form.
2. The matter has
been examined. It may be recalled that a similar issue had come up before the
Conference of Commissioners on Tariffs and Allied Matters held in Sep. '95 at
Calcutta. After examination of the issue in all its aspects, the Conference had
felt that the term `bulk form' would refer to oil imported in containers but
such containers should not be of the size which are normally traded in wholesale
or retail. The Conference also recommended that in such cases, the benefit of
the notification would be restricted to the manufacturers with repacking
facility.
3. The matter has
been further examined in Board's office and it has been felt that no clear-cut
guidelines can be laid down with reference to the quantity of liquid which, will
meet the criterion of the term `bulk form' used in the notification. It may be
stated that the threshold will vary from case to case or commodity to commodity.
As for instance, the CEGAT, while examining the import of essential oil in bulk
form under the ITC, (Order No. 62/ 98 dated 23/ 3/ 98) has observed that 5 kgs
of essential oil is being used in the making of 30 tonnes of talcum powder and
hence essential oil in 5 kgs packing should be considered as bulk in commercial
understanding for the said commodity. However, this yardstick will obviously not
apply to the imports of edible oils, for it is common know ledged that a five kg
pack of edible oil has to be considered as a retail pack.
4. It follows from
the above that a clear-cut definition cannot be provided for the term
�vegetable oils ... in loose or bulk form� used in the notification.
However, it may be noted that goods which are sold, or are capable of being
sold, in a packing on an �as is basis� and the packing is sold to the
ultimate consumer on as �as is basis�, may not qualify for the definition of
the term �in loose or bulk form�. At any rate, the decision whether the
goods imported are in `loose or bulk' form has to be taken after considering the
merits of the case. A guiding principle could be whether the packing in which
the oil is imported is of a size that the oil can be sold in retail in that
packing. If it is, a view can be taken that the oil is not eligible to the
concessional rate under the notification.
5. Schedule III to
the Standards of Weights and Measures (Packaged Commodities) Rules, 1977,
provides details in respect of commodities, which are to be packed in specified
quantities. Account may, therefore, be taken of this while deciding the issue as
to whether the products has been imported in loose or bulk form. Generally
speaking, the term �in loose or bulk form� would imply that the nature of
the packing should be such that the goods are,
(a)
Not capable of being sold in retail as such, or
(b)
Repackaged/ refilled by the importer after the import of the goods and
before effecting sale of the goods.
6. Difficulties, if
any, faced in implementing the above instructions may kindly be brought to the
notice of the Board.
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