2008 (3) TMI 608 - AT - Central Excise

Summary

Issues:
1. Confiscation of Hydro-generated Vegetable Oil (Vanaspati Ghee) under Customs Act.
2. Compliance with standards under Prevention of Food Adulteration Act and Rules.
3. Imposition of redemption fine and penalty on the importer.
4. Adjudication of penalty based on melting point test results.
5. Comparison with previous Tribunal and High Court decisions.
6. Final decision on the appeal against the confiscation.

Analysis:
1. The appeal was filed against the confiscation of Vanaspati Ghee valued at Rs. 1,46,79,214.30 under Section 111(d) of the Customs Act due to alleged adulteration as per Prevention of Food Adulteration Act and Rules. The Commissioner of Customs ordered its release for re-export upon payment of a redemption fine of Rs. 10 lakhs and imposed a penalty of Rs. 5 lakhs under Section 112(a) of the Customs Act.

2. The appellants argued that the Vanaspati Oil imported from Sri Lanka had a melting point within the acceptable range based on the exporter's quality certificate. However, the Central Food Laboratory test showed a melting point of 41.9^0C, slightly above the prescribed limit of 41^0C. The appellants contended that this marginal difference should not lead to confiscation as the goods had already been re-exported.

3. The Revenue contended that the goods were adulterated as per Customs Act since the melting point exceeded the prescribed limit. They cited a previous Tribunal decision where confiscation was upheld for similar reasons. The Tribunal and Delhi High Court decisions were referenced to support the Revenue's position.

4. The Tribunal noted that the sample tested twice showed a melting point of 42.5^0C, above the permissible limit of 31-41^0C under Prevention of Food Adulteration Rules. Citing the Supreme Court's stance on the seriousness of food adulteration, the Tribunal upheld the confiscation while setting aside the penalty due to the test report indicating a melting point of 40^0C.

5. The Tribunal highlighted the difference in the test report between this case and the previous case, where the penalty was set aside. Since there was no specific report showing a melting point of 40^0C in this instance, the imposition of the penalty was deemed justified. The appeal against the penalty was dismissed based on these grounds.

6. The final decision upheld the confiscation of the imported Vanaspati oil, considering the test results and compliance with the standards under the Prevention of Food Adulteration Act and Rules. The appeal against the confiscation was dismissed based on the findings and legal precedents cited in the judgment.