2021 (4) TMI 492 - AT - Customs

Import of prohibited goods - Decalcified Fish scale for Collagen (Fish Protein) - Revenue found the item to contain pathogenic Salmonella on testing and directed the importer to move the cargo back to Customs jurisdiction - re-export of goods allowed subject to payment of redemption fine and penalty - HELD THAT - The Commissioner(Appeals) in the impugned order has specifically allowed the benefit to the appellant under Section 74 of the Customs Act, 1962 for reexport of goods as the governing factors under Section 74 for reexport of goods imported have not been violated by the appellant - when the goods allowed to be reexported by the Commissioner(Appeals), then the imposition of redemption fine and penalty is not sustainable in view of the various decisions relied upon by the appellant. Tribunal in the case of Kenda Farben India Pvt. Ltd. 2018 (10) TMI 1571 - CESTAT ALLAHABAD , has held that imposition of redemption fine is not justified when permission was granted to reexport the goods. Thus, imposition of fine and penalty not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Imposition of fine and penalty on appellant for clearance of goods rejected by Animal Quarantine Department.
- Confiscation of goods and allowance for re-export under Section 74 of the Customs Act, 1962.
- Appeal challenging the imposition of fine and penalty.

Analysis:
1. Imposition of Fine and Penalty: The appellant filed a Bill of Entry for clearance of 'Decalcified Fish scale for Collagen' under heading 35040099, which was provisionally assessed and cleared based on NOC from the Animal Quarantine Department. However, the Department later rejected clearance due to the presence of pathogenic Salmonella, directing deportation/destruction of the goods. The appellant sought re-export under Section 74 of the Customs Act, 1962, but the adjudicating authority imposed a fine of ?50,000 and a penalty of ?25,000. The Commissioner(Appeals) modified the order, allowing re-export under Section 74 but upheld the penalty and fine. The appellant challenged this imposition, arguing that once goods are allowed for re-export, fines and penalties are not justified, citing legal precedents.

2. Confiscation and Re-Export: The original authority confiscated the goods but permitted re-export upon payment of redemption fine and penalty. The Commissioner(Appeals) granted the benefit under Section 74 for re-export, finding no violation by the appellant. The Tribunal, considering previous decisions like Kenda Farben India Pvt. Ltd., stated that when goods are permitted for re-export, the imposition of redemption fine and penalty is not sustainable. Citing Siemens Public Communication Networks Ltd., the Tribunal emphasized that fines and penalties cannot be imposed when re-export is allowed, as in the present case. Consequently, the Tribunal set aside the impugned order, allowing the appeal of the appellant and ruling against the imposition of fine and penalty.

In conclusion, the Tribunal found the imposition of fine and penalty unsustainable in law when goods were permitted for re-export under Section 74 of the Customs Act, 1962. By following established legal precedents, the Tribunal set aside the impugned order, providing relief to the appellant in this case.