2010 (10) TMI 260 - AT - Customs

Confiscation - goods are not fit for consumption as the expiry date was over - whether the milk powder which is not fit for human consumption, can be re-treated from the said Full Cream Milk Powder or not - Government has allowed duty free import of 30,000/- MTs of milk powder, to meet the local milk demand as against 60% of the normal rate of Basic Customs Duty - If the appellant would not have come forward with the alternative plea of possibility of retrieving milk out of the powder in question, the decision taken by the Commissioner as regards absolute confiscation of the same on the ground of expiry of shelf life was liable to be upheld - appellant intends to retrieve milk from the re-imported powder, after taking requisite permission of Foods & Drugs authority - Accordingly decided in the favour of the assessee by way of remand

Summary

Issues:
- Appeal against confiscation and penalty imposed under Customs Act, 1962 for re-imported milk powder.
- Compliance with Prevention of Food Adulteration Act, 1954.
- Expiry date and mis-branding concerns.
- Legal requirements for import of food products.
- Expert opinion and permission for re-treating milk powder.

Analysis:
1. The appellant appealed against the confiscation and penalty imposed by the Commissioner under the Customs Act, 1962 for re-importing "Amul Full cream Milk Powder." The appellant exported the milk powder to fulfill export obligations but re-imported it due to market conditions. The re-import was done under specific provisions allowing re-import within a certain period.

2. The Commissioner rejected the re-import primarily due to concerns regarding compliance with the Prevention of Food Adulteration Act, 1954. The Customs examination found the expiry date passed, leading to doubts on the product's suitability for consumption. The appellant clarified that the product was not intended for the Indian market and highlighted their quality control measures.

3. The Revenue found the milk powder mis-branded as it did not comply with labeling provisions. The Commissioner referenced import policy notes requiring compliance with food safety regulations. The Commissioner concluded that the product was mis-branded and prohibited for import under the Prevention of Food Adulteration Act, 1954.

4. The appellant argued that the product was manufactured for export and not intended for the Indian market, hence certain labeling requirements were not met. The appellant proposed retrieving milk from the powder after obtaining necessary permissions. The Tribunal noted the shortage of milk in the country and the potential waste of resources if the goods were destroyed.

5. The Tribunal acknowledged the appellant's intention to retrieve milk from the powder and remanded the matter to the Commissioner for a fresh decision. The Commissioner was directed to consider expert opinions under the Food Prevention Act before making a decision on clearance. The Tribunal emphasized expediting the process after the appellant submitted the required permissions and opinions.

6. Ultimately, the appeal was allowed by way of remand, highlighting the need for expert opinions and permissions before making a final decision on the clearance of the re-imported milk powder.