2011 (8) TMI 165 - AT - Customs

Import - Drogenated vegetable oil (vansapti ghee) - Prevention of Food Adulteration Act, 1954 - penalty under section 112(a) - Since, the appellant relied upon the certificate given by the foreign supplier indicating the melting point as 37.50C. The appellant bonafidely believed the said certificate provided by the foreign supplier - Even the impugned order of the Commissioner has not attributed any knowledge or malafide to the appellant so as to impose penalty upon them - The appellant immediately took up the matter with the foreign suppler who accepted the re-export of the same - In these circumstances, we are of the view that the imposition of penalty upon the importer is not justified - Decided in favour of assessee.

Issues:
1. Importation of adulterated goods not conforming to standards under Prevention of Food Adulteration Act, 1954.
2. Confiscation of goods and imposition of redemption fine and penalty.
3. Justification for the imposition of redemption fine and penalty.
4. Role of importer in importing adulterated goods.
5. Reduction of redemption fine and setting aside of penalty imposition.

Issue 1: Importation of adulterated goods not conforming to standards under Prevention of Food Adulteration Act, 1954
The appellant imported 10 containers of hydrogenated vegetable oil (vanaspati ghee) which were found to be adulterated as per the test report from the Central Food Laboratory, Ghaziabad. The melting point of the goods was above the prescribed limit, rendering them not permissible for import under the Prevention of Food Adulteration Act, 1954.

Issue 2: Confiscation of goods and imposition of redemption fine and penalty
The Commissioner of Customs, New Delhi initiated proceedings for confiscation of the goods and allowed the appellant to re-export the goods on payment of a redemption fine of Rs.7 lakh. Additionally, a penalty of Rs.3 lakh was imposed on the appellant under section 112(a) of the Act.

Issue 3: Justification for the imposition of redemption fine and penalty
The Revenue justified the imposition of the redemption fine and penalty on the grounds that the goods did not conform to the standards under the Prevention of Food Adulteration Act, 1954, and were tainted goods. The higher melting point than the prescribed limit warranted the confiscation and penalties.

Issue 4: Role of importer in importing adulterated goods
The appellant argued that the importation was made based on a certificate from the foreign supplier in Sri Lanka indicating a melting point within the prescribed range. They did not challenge the test report but requested re-export of the goods to the supplier, who accepted it. The importer claimed no malafide intention and argued that they played no role in importing adulterated goods.

Issue 5: Reduction of redemption fine and setting aside of penalty imposition
The Tribunal agreed that the goods were liable for confiscation but noted that no malafide intention was attributed to the importer. Considering the importer's reliance on the foreign supplier's certificate and immediate action for re-export, the Tribunal reduced the redemption fine to Rs.3.5 lakh and set aside the penalty imposition under section 112(a) of the Act.

In conclusion, the Tribunal disposed of the appeal by reducing the redemption fine and setting aside the penalty imposition, considering the circumstances and lack of malafide intention on the part of the importer.

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