2019 (1) TMI 1444 - AT - Customs

Export of Rice - Basmati Rice or Non-Basmati Rice? - Held that - The size of grains were more than the size prescribed by DGFT (6.61mm length & L/B more than 3.5 mm) which is in consonance with law. Policy Circular No. 11 (RE-2012)/2009-14 dated 3/1/2013 issued by the DGFT, categorically states as follows- 2.Since export of non-basmati rice has been made free from 9.09.2011, it has been decided to withdraw with immediate effect both policy circular mentioned in para 1 above, namely, Policy Circular No. 33 (RE-2008) 2004-09 dated 30/09/2008 and Policy Circular No. 28/2009-14 dated 31/03/2010. - Taking judicial notice of the development of law i.e. the goods (rice) were made freely exportable, it is deemed fit to set aside the impugned order - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Determination of whether the exported rice was Basmati Rice or not.

Analysis:
The judgment revolves around the issue of whether the rice exported by the appellant was Basmati Rice as declared in the shipping documents. The appellant had declared the content as "Indian Pusa Basmati Rice" with specific grain length and L/B ratio. However, during customs examination, it was found that a high percentage of grains did not meet the parameters set by the DGFT for defining Basmati Rice. Samples were taken and sent for testing, which confirmed the discrepancy. A show cause notice was issued, leading to the confiscation of goods and imposition of penalties by the Ld. Commissioner.

The appellant argued that the goods were indeed Basmati Rice, citing a test report showing compliance with the prescribed parameters. The appellant also raised concerns about the sampling process, claiming it was not representative due to the small sample size. Reference was made to a policy circular withdrawing provisions for drawing export samples of Basmati rice for variety identification purposes. Additionally, reliance was placed on a previous tribunal decision in a similar case to support the appeal for setting aside the impugned order.

After considering the arguments and perusing the records, the Member (Judicial) noted that the size of grains in the exported rice exceeded the parameters set by the DGFT, aligning with the law. The Member also highlighted a policy circular stating that non-Basmati rice had been made freely exportable from a certain date. Considering the legal developments and the specific circumstances of the case, the impugned order was set aside, and the appeal was allowed, providing consequential relief to the appellant.

In conclusion, the judgment addressed the crucial issue of determining the nature of the exported rice, emphasizing compliance with regulatory parameters and policy changes regarding the export of non-Basmati rice. The decision to set aside the impugned order and allow the appeal was based on a thorough analysis of the facts, legal provisions, and precedents cited during the proceedings.