2004 (1) TMI 532 - AT - Customs

Summary

Issues:
1. Confiscation of import consignment of Betamethasone sodium phosphate.
2. Redemption fine.
3. Penalty imposition.
4. Compliance with I.P. standards.
5. Appellant's argument for reprocessing goods.
6. Customs and Drug Control Authorities' roles.
7. Knowledge of import goods being sub-standard.

Confiscation of Import Consignment:
The appeal was against the order confirming the confiscation of the import consignment of Betamethasone sodium phosphate, along with a redemption fine and penalty. The original authority found that the imported goods failed the chemical test for I.P. standards under the Drugs and Cosmetics Act, 1940, read with the Customs Act, 1962. The goods were imported in a non-standard form not conforming to I.P. specifications, although the Drug Control Authorities deemed the deficiency curable through reprocessing by the appellants.

Redemption Fine and Penalty Imposition:
The appellants argued that the goods could be reprocessed in their factory to meet I.P. standards, with necessary permission obtained from the drugs control authorities. Despite this, the adjudicating authority still imposed confiscation, redemption fine, and penalty. The Tribunal noted that while the confiscation was technically justified, taking a practical view was necessary. The Tribunal reduced the redemption fine to Rs. 5,000, as the appellants were not proven to have knowledge of the import goods being sub-standard, making the penalty imposition uncalled for.

Compliance with I.P. Standards and Authorities' Roles:
The goods were not in dispute for not conforming to I.P. specifications upon import. However, the Drug Control Authorities were satisfied that the deficiency was curable and that the appellants could rectify it to meet the standards. The Tribunal highlighted the role of Customs and Drug Control Authorities in monitoring such situations, emphasizing the need for a practical approach despite the technical violation of customs laws.

Knowledge of Import Goods Being Sub-standard:
The Tribunal upheld the order of confiscation but reduced the redemption fine and set aside the penalty imposition. It was concluded that since it was not established that the appellants had knowledge of the import goods being sub-standard, the penalty imposition was deemed unnecessary. The modifications were made to the original order, partly allowing the appeal of the appellants in the specified terms.