2013 (9) TMI 851 - AT - Customs

Benefit of Notification No. 57/2009-2012 Confiscation of Goods u/s 113 Redemption of Goods Penalty u/s 114 and 114AA of Customs Act Waiver of Pre-Deposit - Revenue was of the view that the price submitted for export was non-Basmati Rice which was prohibited for export during the relevant time - Held that - Under Section 129E of Customs Act there was no requirement of pre-deposit of redemption fine - The detained goods were sufficient security for realising the dues from the order and therefore there was a considerable merit in the argument of the appellants -pre-deposit of penalty for hearing the appeal was waived. The exporter had acted on the basis of notification issued by DGFT and the goods presented conformed to the prescribed standards - the goods cannot be considered as goods prohibited for export and therefore the confiscation of the goods under Section 113(d) of the Customs Act was not maintainable order was set aside regarding confiscating the goods and imposing the penalty - The request of the appellants for taking the goods back to the town without payment of any fine and penalty was accepted.

Summary

Issues:
1. Whether the exported goods met the specifications for Basmati Rice as per DGFT standards?
2. Validity of the confiscation of goods and penalties imposed under the Customs Act.
3. Consideration of waiver for pre-deposit of penalties.
4. Application of AGMARK standards in determining the nature of the exported goods.

Analysis:

1. The appellant exported rice declared as "Indian Basmati White Rice," but Customs officers later doubted if it was actually Basmati Rice. Various reports conflicted on whether the rice met Basmati standards. The Revenue contended that the rice was non-Basmati, prohibited for export at the time.

2. A Show Cause Notice was issued, leading to an adjudication order confiscating the goods and imposing fines and penalties under the Customs Act. The Commissioner (Appeals) upheld the confiscation and penalties on the exporter but set aside the penalty on the proprietor. The appellants appealed against this decision.

3. The appellants argued that the goods met DGFT specifications for export, emphasizing the criteria of grain length and length to breadth ratio. They sought waiver of pre-deposit, citing the high redemption fine preventing them from reclaiming the goods held by Customs for six months.

4. The Tribunal noted that DGFT only prescribed criteria related to grain length and ratio for Basmati Rice, not AGMARK standards. As the goods met DGFT standards, they couldn't be considered prohibited for export. Consequently, the Tribunal set aside the confiscation and penalties imposed.

5. Considering the appellants' request to take the goods back without fines or penalties, the Tribunal granted permission for this without any further financial obligations. The stay petition and appeal were thus disposed of, emphasizing adherence to DGFT standards over AGMARK in determining the nature of the exported goods.