2018 (5) TMI 1970 - AT - Customs

Confiscation of imported goods - redemption fine - penalty - classification of imported goods - Mari Gold Seeds - it was certified that the imported goods were contaminated with Quarantine Weed i.e., Viola Arvensis - HELD THAT - The appellant has argued that vide their letter dated 16-11-2011, they have only applied for permission for re-export but did not waive the issue of show cause notice and PH. But the fact remains that the appellant was aware of the fact that the imported consignment has not been cleared by Plant Quarantine authorities. Consequently, the non-issuance of an explicit show cause notice cannot be held to be a serious violation of the principles of natural justice. We have already upheld the order for confiscation of the imported goods. The redemption fine imposed is reasonable and hence, we find no reason to interfere with the imposition of redemption fine of ₹ 30,00,000/- - The appellants appear to have taken of reasonable steps by obtaining Psyto Sanitary Certificates at the Port of Export certifying the seeds to be free of contamination. The penalty imposed on the appellant is not justified. Hence, the penalty is set aside. Appeal allowed in part.

Summary

Issues:
Import of contaminated goods, Confiscation under Customs Act, 1962, Principles of natural justice violation, Redemption fine imposition, Penalty justification

Analysis:
1. The appellant imported goods declared as "Mari Gold Seeds" accompanied by Psyto Sanitary Certificates from China certifying freedom from Quarantine Weed Seeds. However, Plant Quarantine authorities in India found contamination with Quarantine Weed, leading to confiscation under Section 111(d) of the Customs Act, 1962, with an option for re-export on payment of redemption fine and imposition of penalty.

2. The appellant challenged the order on grounds of having obtained the required certificates at the Port of Export, satisfying Plant Quarantine regulations, and claiming no waiver of show cause notice despite requesting re-export. The Tribunal upheld the confiscation, citing the discrepancy in certification between the Port of Export and Import, making the goods ineligible for clearance into India.

3. Regarding the waiver issue, the Tribunal noted the appellant's awareness of the non-clearance by Plant Quarantine authorities, deeming the absence of an explicit show cause notice not a serious violation of natural justice principles. The Tribunal upheld the redemption fine of &8377; 30,00,000, considering it reasonable in the circumstances.

4. The appellant's argument of having taken reasonable steps by obtaining certificates at the Port of Export was acknowledged, leading to the setting aside of the penalty imposed. The Tribunal found the penalty unjustified, given the steps taken by the appellant to ensure compliance with relevant regulations.

5. Ultimately, the Tribunal partially allowed the appeal, upholding the confiscation and redemption fine while setting aside the penalty. The decision was pronounced openly on 29-5-2018, providing clarity on the issues raised and the Tribunal's findings on each aspect of the case.