2016 (7) TMI 1411 - AT - Customs

Export of Basmati Rice - permission to export rice as per Col. No. 5 Entry No. 45A Chapter 10 (Cereals) of Export Licensing Schedule inserted by DGFT Notification No. 39 (Re-2008)2004-2009, dated 16-9-2009, under the Export Policy 2004-09 as amended - Held that - basmati rice has been allowed freely for export in terms of DGFT Notification No. 39 (RE-2008)/2004-09, dated 16-9-2008 in Sr. No. 45AA - There is no dispute that the export goods have satisfied the condition specified for export as above - both the samples were tested in the Regional Agmark Laboratory. The percentage of other rice grain was found to be over 23% in both the samples, which were considered to be beyond the permissible limit for export by the authority below. After considering the N/N. 39 (RE-2008)/2004-09, dated 16-9-2008, the Agmark Specification for basmati rice for export has not been specified as a restriction in the said notification. The question whether the Customs Authority allowing the export consignment of basmati rice was required to examine the same with reference to DGFT Notification only or they also need to look at Agmark Specifications, was examined in detail by the Tribunal in the case of Shree Jagdamba Agrico Export Pvt. Ltd. v. C.C., Kandla 2014 (6) TMI 301 - CESTAT AHMEDABAD . The Tribunal held that the Customs Authority cannot import the conditions from Agmark standards but has to allow export on the basis of the notification issued by DGFT. Inasmuch as the DGFT restrictions prescribed in Notification No. 39 (RE-2008)/2004-09, dated 16-9-2008 have been satisfied, there is no justification to order confiscation of the export goods under Section 113 of the Customs Act and also to impose the penalty under Section 114. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Confiscation of export goods under Customs Act for mis-declaration in shipping bill
- Imposition of redemption fine and penalty on the appellant
- Challenge to impugned order based on lack of test report copies and cross-examination
- Interpretation of Export Policy 2009-14 for export of basmati rice
- Examination of Agmark specifications in relation to DGFT Notification
- Justification for confiscation of export goods and imposition of penalty

Confiscation of Export Goods:
The case involved the confiscation of export goods under Section 113(d) and Section 113(h)(i) of the Customs Act due to mis-declaration in the shipping bill. The original authority confiscated the goods, imposed a redemption fine under Section 125, and a penalty under Section 114(i). The Commissioner of Central Excise (Appeals) upheld the original order, leading to the appeal before the Tribunal.

Challenge to Impugned Order:
The appellant challenged the impugned order on the grounds of not receiving copies of the test reports and being denied the opportunity for cross-examination of the chemical examiner. Additionally, the appellant argued that the export policy only specified parameters related to grain length and ratio, not the presence of other rice. Citing previous cases, the appellant sought to set aside the impugned order.

Interpretation of Export Policy:
The dispute revolved around the Export Policy for basmati rice export during the relevant period. The Tribunal found that the export goods met the conditions specified in the DGFT Notification, allowing basmati rice export. However, the samples tested showed a percentage of other rice grain beyond the permissible limit. The Tribunal examined the Agmark specifications and their relevance to the export policy.

Examination of Agmark Specifications:
The Tribunal analyzed whether the Customs Authority should consider Agmark specifications along with DGFT Notification for basmati rice export. Referring to previous cases, the Tribunal concluded that the Customs Authority must adhere to the conditions set by DGFT and not import standards from Agmark. In this case, the confiscation was based on Agmark standards, not DGFT restrictions, leading to the appeal's allowance.

Justification for Confiscation and Penalty:
Given that the DGFT restrictions were satisfied, the Tribunal found no justification for confiscating the export goods under Section 113 of the Customs Act and imposing a penalty under Section 114. Consequently, the impugned order was set aside, and the appeal was allowed.

This detailed analysis of the judgment highlights the issues, arguments presented, legal interpretations, and the ultimate decision reached by the Appellate Tribunal CESTAT CHANDIGARH.