2017 (6) TMI 190 - AT - Customs

Export of prohibited goods - non-Basmati Rice - The case of the Revenue is that the export goods contained other rice ranging from 21.1% to 22.84%. And hence it has to be considered as Non-Basmati Rice which is not allowed for export - confiscation - redemption fine - penalty - Held that - export goods need to be 100% Basmati Rice. The test of predominance has no relevance here. The goods are freely allowed for export only if they consist of basmati rice entirely. From the test results it is evident that the presence of other rice is of the order of 21% to 22.8%. Since the export goods do not satisfy the terms of the FT policy they are not allowed for export and hence become prohibited goods and hence are liable for confiscation. The samples were drawn in the presence of the representative of the exporter. At the request of the manufacturer duplicate samples have also been tested. However the percentage of their rice is found to be of the order of 21-22%. The exporter or their representative did not seem to have objected to the procedure of the sampling at any stage during the proceeding. Consequently it is not open to the appellant to dispute the procedure at the stage of the appeal. Appeal dismissed - decided against appellant.

Issues: Export of non-Basmati rice under the Customs Act, 1962; Procedure for drawing samples of rice consignment; Compliance with Foreign Trade Policy 2009-2013 regarding export of Basmati Rice.

Analysis:
1. Export of non-Basmati rice under the Customs Act, 1962:
The case involved the export of Basmati Rice where samples indicated the presence of other rice, leading customs authorities to consider the rice as non-Basmati and order confiscation under Sections 113(d) and 113(h) of the Customs Act, 1962. The appellant challenged this decision, arguing that the sample drawn was not representative as only one packet out of 4,000 was tested. The appellant contended that the procedure for drawing samples was not followed, and the rice should be considered Basmati based on predominance. However, the tribunal upheld the confiscation order, emphasizing that the export goods needed to be 100% Basmati Rice as per the Foreign Trade Policy, and the presence of other rice rendered the goods prohibited for export.

2. Procedure for drawing samples of rice consignment:
The appellant raised objections regarding the sampling procedure, claiming it was not strictly followed. However, the tribunal noted that samples were drawn in the presence of the exporter's representative, and duplicate samples were also tested upon the manufacturer's request. The tribunal highlighted that the appellant did not object to the sampling procedure during the proceedings, thereby precluding the appellant from disputing the procedure at the appeal stage. Consequently, the tribunal rejected the appellant's challenge based on the sampling procedure.

3. Compliance with Foreign Trade Policy 2009-2013 regarding export of Basmati Rice:
The tribunal analyzed the Foreign Trade Policy 2009-2013 and the specific conditions for the export of Basmati Rice, including size requirements and price thresholds. The tribunal observed that the policy did not specify a tolerance limit for the presence of other rice in Basmati Rice consignments. Emphasizing the need for 100% Basmati Rice for export under the policy, the tribunal concluded that the goods with 21% to 22.8% other rice content did not meet the policy terms, rendering them prohibited for export. Therefore, the tribunal upheld the confiscation order based on the non-compliance with the Foreign Trade Policy requirements.

In conclusion, the tribunal ruled in favor of the customs authorities, upholding the confiscation order due to the presence of non-Basmati rice in the export consignment, non-compliance with the Foreign Trade Policy conditions, and the lack of objection to the sampling procedure during the proceedings. The judgment underscores the importance of strict adherence to export regulations and policies to avoid confiscation of goods and penalties under the Customs Act, 1962.

← Previous Next →