2016 (1) TMI 1002 - AT - Customs

Confiscation and penalty - Re-import of cheese curd which was exported earlier due to quality deficiency - On re-import, the said goods were subjected to mandatory FSSAI test and it was revealed that the goods did not conform to the parameters as specified for the product. - it was held that the goods were liable to confiscation under section 111(d) of the Customs Act, 1962 and the appellant importers were liable to penal action under section 112(a) of the Customs Act, 1962. Held that - Since many of the issues raised and which have not been answered are based on facts as well, I cannot independently deal with it in the Tribunal. Since the order is not a speaking order, it is set aside and the matter is remanded to the Commissioner (Appeals) for giving findings on all the grounds which have been raised before him. - Matter remanded back.

Issues involved:
1. Confiscation of goods under section 111(d) of the Customs Act, 1962 and penal action under section 112(a) of the Customs Act, 1962.
2. Challenge against the order of the Additional Commissioner regarding confiscation and penalty.
3. Classification of goods under the Food Safety and Standards Act (FSS Act) and compliance with standards.
4. Lack of clarity in the impugned order and the need for a speaking order.

Analysis:

Issue 1: Confiscation of goods and penalty under the Customs Act
The appellant, M/s Modern Dairies Ltd., exported 'cheese curd' which was rejected by the buyer due to quality deficiency. On re-import, the goods failed the mandatory FSSAI test, leading to confiscation under section 111(d) and imposition of penalty under section 112(a) of the Customs Act, 1962. The appellant contended that 'cheese curd' is an intermediary product for making mozzarella cheese, requiring further processing to meet standards. They cited expert opinions and legal precedents to support their argument.

Issue 2: Challenge against the Additional Commissioner's order
The Additional Commissioner confiscated the goods, offered release on payment of a fine, imposed a penalty, and allowed reprocessing under certain conditions. The appellant appealed this decision before the Commissioner (Appeals), who upheld the order. Subsequently, the appellants approached the Tribunal seeking relief from the penalties and confiscation.

Issue 3: Classification under the FSS Act and compliance
The appellants argued that the impugned goods did not fall under the definition of 'food' as per the FSS Act, hence not subject to specific standards. They claimed that the deficiency in the FSSAI test, particularly the 'Coliform count,' could be rectified through processing, which was not considered in the impugned order. The lack of clarity regarding the standards under the FSS Act and rules made thereunder was highlighted as a crucial point in the appeal.

Issue 4: Need for a speaking order
The Tribunal noted that the impugned order did not address the key issues raised before the Commissioner (Appeals), rendering it non-speaking. As the issues involved factual considerations, the Tribunal set aside the order and remanded the matter to the Commissioner (Appeals) for a detailed examination and findings on all grounds raised by the appellants.

In conclusion, the judgment highlighted the importance of a comprehensive and reasoned order, especially in cases involving complex legal and factual issues. The Tribunal's decision to remand the matter for further consideration underscores the significance of addressing all relevant arguments and providing clear justifications in legal proceedings.

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