2010 (8) TMI 781 - AT - Customs

Export of Rice - mis-declaration of description - On examination of the goods, same were found to be non-Basmati Rice instead of Basmati Rice, declared in the shipping bill - Held that - the non-Basmati rice was meant for export under the garb of Basmati rice by all the appellants under a design, thus, inviting confiscation of the same and imposition of penalties on the exporters Redemption fine and penalty reduced to 25%. As regards penalty imposed on M/s Anchor Logistics, CHA, we note that there is no evidence on record to show that he was aware of the quality of the rice being non-Basmati rice instead of Basmati rice, penalty set aside. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues: Confiscation of non-Basmati Rice mis-declared as Indian Basmati Rice, imposition of penalties on exporter and CHA, reduction of redemption fine and penalties.

Confiscation of Non-Basmati Rice: The judgment involves the confiscation of 375 MTs of non-Basmati Rice mis-declared as Indian Basmati Rice by M/s Krish Agro Overseas. The goods were found at the CFS of M/s All Cargo CFS at Mundra and were seized under Section 113 of the Customs Act, 1962. Statements from various individuals, including the partner of the CHA and the exporter, were recorded during the investigation, revealing lack of awareness regarding the quality of the cargo.

Exporter's Explanation: The proprietor of the exporter, M/s Krish Agro Overseas, admitted to the error in declaring non-Basmati Rice as Basmati Rice. He attributed the mistake to human error, stating that the rice was sourced from mills and packed incorrectly without any malafide intention. However, the Tribunal noted that the exporter was aware of the export restrictions on non-Basmati Rice and should have verified the quality before shipment.

Legal Precedent: The judgment referred to a previous case where similar issues were addressed, emphasizing that pleas of human error were not accepted as mitigating circumstances. The Tribunal highlighted that the value of the rice was significant and efforts were lacking to prove payment for Basmati Rice. The Tribunal reduced the redemption fine and penalties imposed based on the earlier case's criteria.

Reduction of Redemption Fine and Penalties: The Tribunal upheld the decision to reduce the redemption fine and penalties to 25% of the amounts initially imposed, following the precedent set in previous cases with similar circumstances. The penalties were reduced for all appellants, including M/s Krish Agro Overseas.

Penalty on CHA: The judgment also addressed the penalty imposed on the CHA, M/s Anchor Logistics. The Tribunal found no evidence implicating the CHA in the misdeclaration of the rice. The CHA claimed lack of awareness regarding the cargo's quality, and the Tribunal, extending the benefit of doubt, set aside the penalty of Rs.5 lakhs imposed on M/s Anchor Logistics.

In conclusion, the judgment confirmed the confiscation of non-Basmati Rice, upheld penalties on the exporter while reducing fines and penalties, and set aside the penalty on the CHA due to lack of evidence implicating them in the misdeclaration. The decision was based on legal precedents and considerations of responsibility and awareness in export transactions.