2018 (1) TMI 569 - AT - Customs

Prohibited goods - export of non-Basmati Rice - fulfillment of status of Basmati Rice - Held that - the presence of other rice grain including red grain is to the extent of 43.85% when viewed in the light of the specifications laid down in Schedule 2 to Basmati Rice (Export) Grading and Marketing Rules, 1975, the same does not confer status of Basmati Rice to the consignment in question following - In view of the Hon ble Delhi High Court s decision in the case of Orion Enterprises 2015 (9) TMI 144 - DELHI HIGH COURT , it has to be held that the said specifications are applicable and would convert the consignment into that of a Non-Basmati Rice consignment. Quantum of redemption fine reduced - penalty upheld - separate penalty on Director not justifiable - appeal allowed in part.

Summary

Issues:
1. Declaration of goods as Basmati Rice for export.
2. Determination of Basmati Rice authenticity.
3. Imposition of penalties and redemption fine.
4. Applicability of DGFT Notification and Basmati Rice specifications.

Analysis:
1. The appellant filed Shipping Bills declaring goods as "Indian Cream Sella Basmati Rice" brand "Green Falcon" for export. Samples revealed the goods were not Basmati Rice, leading to export prohibition.
2. The consignment was found to contain 43.85% of other rice grains, including red grain, failing Basmati Rice specifications. Proceedings resulted in confiscation of goods and imposition of fines and penalties.
3. The appeals challenged the order, arguing that DGFT criteria only consider length and length to breadth ratio for Basmati Rice determination. However, the Hon'ble Delhi High Court ruled that Basmati Rice specifications from Basmati Rice (Export) Grading and Marketing Rules, 1979 apply, allowing a maximum of 20% other rice content.
4. Considering the High Court's decision, the presence of 43.85% other rice grains disqualifies the consignment as Basmati Rice. The Tribunal's decision was overturned, upholding the redemption fine and penalties imposed by the Original Authorities.

Final Decision:
The Tribunal found no merit in the appeals, reducing the redemption fine to ?13,00,000 based on the consignment value. The penalty on the director was set aside, considering the penalization of the Export Unit. Both appeals were disposed of accordingly.