2014 (9) TMI 470 - HC - Customs

Release of confiscated goods - tribunal fixed the final date of hearing instead of deciding release of goods as prayed in miscellaneous application - import of Monosodium Glutamate an organic food additive, used as flavouring agent in foods - violation of the provisions of the Prevention of Food Adulteration Act, 1954 - Held that - in view of the fact that the goods imported by the appellant is classified as a food additive , and as they have a limited shelf-life and as they have been found to be fit for human consumption, this Court finds it appropriate to direct the first respondent, to release the goods in question, imported by the appellant, under Bills of Entry Nos. 3618504, dated 26-5-2011, 4324694, dated 10-8-2011 and 4376254, dated 17-8-2011, on the appellant furnishing a Bank Guarantee for a sum of ₹ 30 lakhs, as redemption fine, to the satisfaction of the first respondent, within a period of two weeks from the date of receipt of a copy of this judgment. - On furnishing such Bank Guarantee, the first respondent shall release the goods in question within a period of two weeks thereafter. - Decided in favor of assessee.

Summary

Issues:
- Appeal against the order of Customs, Excise and Service Tax Appellate Tribunal regarding the release of imported goods
- Alleged violation of Prevention of Food Adulteration Act, 1954, and Customs Act, 1962
- Confiscation and penalty imposed on the appellant
- Request for release of goods by furnishing a Bank Guarantee
- Shelf-life and suitability of imported goods for human consumption

Analysis:
1. The appellant imported 'Monosodium Glutamate' from China, and the goods were examined by Directorate of Revenue Intelligence for alleged violations of food safety laws and customs regulations.
2. The officials seized the goods due to non-compliance with labeling requirements and suspected misbranding, estimating the market value at Rs. 444.48 lakhs.
3. Issues raised included the rejection of declared value, re-determination of unit prices, and possible confiscation under relevant laws.
4. Samples were sent for testing to Referral Food Laboratory, Mysore, while the appellant was asked to show cause for various alleged violations.
5. The first respondent imposed a penalty of Rs. 70 lakhs, rejected unit values, and ordered the enforcement of bonds and differential duty payment.
6. The appellant appealed to the Customs Tribunal, which waived the penalty deposit but did not release the goods pending appeal, setting a hearing date.
7. The appellant requested the High Court to direct the release of goods by furnishing a Bank Guarantee equivalent to the redemption fine.
8. The Court considered the goods' classification as 'food additives' with a limited shelf-life, fit for human consumption, and directed the release upon furnishing a Bank Guarantee of Rs. 30 lakhs within two weeks.

Conclusion:
The High Court directed the release of the imported goods upon the appellant providing a Bank Guarantee, considering the nature of the goods and their suitability for consumption. The appeal was disposed of without costs, and the connected Miscellaneous Petition was closed.