2013 (1) TMI 228 - AT - Customs

Confiscation of misbranded or unsafe goods - creamy butter peanut rejected on not conforming the standards at the purchasers end - FAA converted absolute confiscation into confiscation directed to the released on payment of redemption fine of Rs.50,000/- - Held that - FAA while disposing the case, has recorded that the appellant had undertaken to reprocess the goods and complete details of processing will be kept and before exporting the goods it will be seen that the reprocessed the products would adhere to the conditions of Food Safety and Standards & Regulations, 2011 and the provisions of Food Safety and Standards Act, 2006 and the rules made there under. Thus FAA has correctly come to the conclusion by allowing the clearance of the consignment with a further order for redemption of the confiscated goods on payment of fine to Rs.50,000/- subject to the condition that the appellant shall furnish a bond with a bonk guarantee of Rs.l0 lakhs, undertaking to clear the impugned goods under the escort of customs officers,to keep the goods of separate place in their factory premises after verification by the Officers, maintain complete account of the process & to re-process the goods under the supervision of the Central Excise Officers, within 3 months to export the re-processed goods only after receipt of test report from the Chemical Examiner FDL, Vadodara & to pay the cost of staff (officers) deployed by the Department as prescribed by the Govt. of India, in advance.

Summary

Issues:
- Confiscation of goods under Section 111(d) of the Customs Act, 1962
- Appeal against the modification of the order in original
- Compliance with Food Safety and Standards regulations
- Re-import of rejected goods
- Bond and bank guarantee conditions for clearance and reprocessing

Confiscation under Section 111(d):
The case involved the confiscation of goods under Section 111(d) of the Customs Act, 1962, with a penalty imposed on the assessee. The first appellate authority modified the order to allow for the release of goods on payment of a redemption fine. The Revenue appealed this decision, arguing that the goods were misbranded or unsafe under food safety regulations, and the importer failed to meet conditions imposed by the DGFT. The Tribunal upheld the first appellate authority's decision, emphasizing the need for adherence to safety standards and the reprocessing of goods to meet regulatory requirements.

Compliance with Food Safety Regulations:
The issue revolved around the re-import of creamy butter peanut rejected for not meeting quality standards. The Revenue contended that due to the goods' shelf life being less than 60%, they should be considered misbranded or unsafe under food safety regulations. However, the first appellate authority allowed the clearance of goods for reprocessing under strict conditions, including supervision by customs and central excise officers, adherence to safety standards, and export only after meeting specified requirements. The Tribunal found the conditions imposed by the first appellate authority appropriate and upheld the decision.

Re-import of Rejected Goods:
The case involved the re-import of goods rejected for quality issues, necessitating reprocessing to meet safety standards. The first appellate authority ordered the confiscation of goods under Section 111(d) but allowed for redemption on payment of a fine, subject to stringent conditions for reprocessing and export. The Tribunal supported the decision, highlighting the importance of fulfilling regulatory requirements and ensuring the quality of reprocessed goods before export.

Bond and Bank Guarantee Conditions:
The Tribunal emphasized the significance of the bond and bank guarantee conditions imposed by the first appellate authority, outlining specific requirements for clearance, reprocessing, and export of the goods. These conditions included escort by customs officers, maintenance of detailed records, reprocessing under supervision, compliance with safety standards, and payment of prescribed costs. The Tribunal found these conditions necessary to ensure compliance with regulations and quality standards, ultimately rejecting the Revenue's appeal for lacking merit.

In conclusion, the Tribunal upheld the decision of the first appellate authority, emphasizing the importance of adhering to food safety regulations, reprocessing goods to meet standards, and fulfilling stringent conditions for clearance and export. The judgment highlighted the need for strict compliance with regulatory requirements to ensure the quality and safety of imported goods.