2011 (8) TMI 718 - AT - Customs

Imported Goods not as Prevention of Food Adulteration Act (PFA) Rules - Confiscation - Redemption fine and penalty - Held That - When duty involved is 4.23 lakh, redemption fine of 9 lakh is not justified. Penalty - Held That - Appellants bonafidely believed on foreign certificate. Even the order of Commissioner also not attributed any knowledge or malafide to the appellant, Penalty not justified.

Summary

Issues:
1. Importation of adulterated goods not conforming to standards under the Prevention of Food Adulteration Act, 1954.
2. Confiscation of goods, imposition of redemption fine, and penalty under section 112(a) of the Act.
3. Justification of redemption fine and penalty imposed on the importer.

Analysis:

1. The appellant imported 10 containers of hydrogenated vegetable oil (vanaspati ghee) which were found adulterated as per the test report from the Central Food Laboratory, not conforming to the standards under the Prevention of Food Adulteration Act, 1954. The Commissioner of Customs initiated proceedings for confiscation of the goods and allowed re-export on payment of a redemption fine of Rs.7 lakh, imposing a penalty of Rs.3 lakh under section 112(a) of the Act.

2. The appellant contended that the importation was based on a certificate from the foreign supplier indicating a melting point within the prescribed range. They did not challenge the report but requested re-export to the supplier, who accepted it. The appellant argued no malafide intent and questioned the justification for the redemption fine and penalty, as they had no role in importing adulterated goods.

3. The Revenue justified the confiscation, redemption fine, and penalty, stating that the goods did not meet the technical standards, warranting confiscation. However, the Tribunal agreed that the importer had no role in the adulteration, reducing the redemption fine to Rs.3.5 lakh. The Tribunal found no malafide intent on the part of the importer and set aside the penalty imposed under section 112(a) of the Act, considering the reliance on the foreign supplier's certificate and the immediate action taken for re-export.

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