2013 (1) TMI 204 - AT - Customs

Import of L-Argenine not for medical use - confiscation of consignment with an option for redemption against payment of a fine of Rs. One lakh and also ordered for re-export of the goods within 30 days and also imposed a penalty of Rs.50,000/- - NOC from the Drugs Control authorities required for release - Held that - Remand the case to the original authority as though the Hon ble High Court by order dated 18.4.2012 in W.P.filed by the respondent directed that their representation dated 7.3.2012 be considered and disposed of on or before 25.4.2012, the Addl. Commissioner of Customs ordered confiscation of the goods and directed its re-export without considering the said representation. The adjudicating authority relied mainly on the letter dated 20.4.2012 sent by the Deputy Drugs Controller to the Customs authorities. That letter projected L Argenine as a product defined under Section 3 of the Drugs and Cosmetics Act, 1940 and also advised against release of the goods to the respondent. The adjudicating authority heavily relied on the contents of the letter. But no copy of the letter was supplied to the respondent. In other words, the principles of natural justice were violated by the adjudicating authority. Though, before the original authority, the respondent relied on case of Drugs Controller General & Anr. Vs. M/s. S.Kesarimal & Ors. 2013 (1) TMI 119 - MADRAS HIGH COURT the judgment was not considered. Letter dated 16.3.2012 of the Deputy Drugs Controller addressed to M/s. K.P. Manish Global Ingredient (P) Ltd. Chennai indicating that NOC was given to the said company to import 2000 kilograms of L Argenine from China for the purpose of sale to actual user for manufacture of health supplement ingredient was not placed before the Original authority and hence could not be considered - Thus set aside the impugned order and allow this appeal by way of remand to the original authority for fresh adjudication giving the party a reasonable opportunity of adducing evidence and of being personally heard.

Summary

Issues:
1. Confiscation of imported goods under Customs Act.
2. Consideration of representation by Customs authorities.
3. Interpretation of Rules regarding import of goods for medical use.
4. Compliance with principles of natural justice in adjudication process.

Analysis:
1. The appeal involved the Department's confiscation of imported goods under the Customs Act due to failure to obtain necessary clearance from Drugs Control authorities before clearance. The importer declared the goods as not for medical use, seeking release based on a High Court judgment and Rule 43 of Drugs and Cosmetics Rules, 1945. The Commissioner of Customs (Appeals) ordered release on payment of duty, citing precedents of similar cases.

2. The appellant contended that the importer misrepresented the goods as not for medical use, relying on a document indicating the goods were intended for manufacturing a drug. The Deputy Drugs Controller's letter advised against release, but the appellant argued that the Deputy Drugs Controller's NOC to another party for a similar product was not considered by the original authority.

3. The respondent argued that the Commissioner (Appeals) considered their representation as per High Court's direction, highlighting the exemption of Schedule D items from the Drugs and Cosmetics Act. The goods were declared not for medical use, aligning with Rule 43 requirements. The respondent emphasized the dual use of the goods and the cancellation of medical use orders.

4. The Tribunal set aside the impugned order, remanding the case for fresh adjudication due to procedural lapses. The Tribunal noted the failure to consider the High Court judgment, violation of natural justice in not providing a copy of the Deputy Drugs Controller's letter to the respondent, and the non-submission of crucial evidence regarding NOC issued to another party. The Tribunal emphasized a fair hearing and timely decision due to the goods' short shelf life.

This detailed analysis of the judgment addresses the issues of confiscation, representation consideration, rule interpretation, and procedural fairness, providing a comprehensive overview of the legal complexities involved in the case.