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2024 (12) TMI 1323 - AT - CustomsAuthority and procedure for confiscation and re-export under the Customs Act - Imposition of redemption fine and penalty - compliance with standards for Cocoa Beans under the FSS Act or not - goods were unsafe/substandard or not - HELD THAT - The goods Fermented and dried processed Sumatra Cocoa Beans (dead beans)' were imported vide 4(four) bills of entry and on test by the FSSAI and thereafter by Indian Bureau of Standards as per the directions of the Hon'ble High Court of Kerala the analysis report states that, the sample cocoa beans does not conforms the requirement as laid down in IS 8865 2003 for the above listed parameters . Consequently, the goods were recalled and at the request of the appellant, the Adjudicating Authority has allowed re-export of the goods covered by the 4(four) Bills of Entry on payment of redemption fine of Rs. 15 Lakhs and penalty of Rs. 5 Lakhs. The appellant contended that the goods were tested by BIS after a lapse of 11(eleven) months, therefore the goods being agriculture produce would certainly deteriorate with passage of time, therefore the test results after 11(eleven) months would be different, if they are tested immediately after import. In this case the imports were made in the month of May 2014 and September 2014, therefore the contention of the appellant in that the goods where tested after 11(eleven) is not correct, since 2(two) consignments have come in the month of September 2014. Further, it is found that on import and on examination and testing by FASSI they have found that the goods are not as per the approved standards. The appellant has also contended that they obtained the import permit for import of the impugned goods as per the requirement of Plants, Fruits and Seeds (Regulation of Import into India) Order, 1989, Cocoa Beans being agricultural seed must be imported with a valid permit under the Regulation 3 (1), since they have the import permit from the concerned authority their import is valid and there is no violation of the import policy. The appellant contended that according to foreign supplier's test report, the cocoa beans have fully complied with BIS standards prescribed under IS 8865 2003. On recall of the goods by the Authorised Officer and after the issue of the show cause notice, the Adjudicating Authority as per the request of the appellant permitted re-export of the impugned goods on payment of redemption fine and penalty. The appellant has filed this appeal for waiver of fine and penalty imposed by the Adjudicating Authority, while allowing the re-export the impugned goods - in the facts and circumstances of the case, the redemption fine and penalty imposed by the Adjudicating Authority could be considered for reduction - redemption fine is reduced to Rs. 5,00,000/- and penalty to Rs. 2,00,000/- - appeal allowed.
Issues Involved:
1. Compliance with Food Safety and Standards (FSS) Act and Regulations. 2. Conformity of imported cocoa beans with Bureau of Indian Standards (BIS). 3. Validity of test reports and timing of testing. 4. Authority and procedure for confiscation and re-export under the Customs Act. 5. Imposition and reduction of redemption fine and penalty. Detailed Analysis: 1. Compliance with Food Safety and Standards (FSS) Act and Regulations: The primary issue was whether the imported cocoa beans conformed to the standards prescribed under the FSS Act and its regulations. The appellant argued that no specific standards were set for cocoa beans under the FSS Act, and therefore, the imposition of standards was inappropriate. The High Court of Kerala recognized this and directed that the analysis be based on BIS standards instead. The adjudicating authority, however, maintained that the goods must not be substandard or unsafe, as per the FSSAI's mandate. 2. Conformity of Imported Cocoa Beans with Bureau of Indian Standards (BIS): The imported cocoa beans were tested against BIS standards, specifically IS 8865:2003. The test results indicated that the beans did not meet the required parameters, leading to the recall of the goods. The appellant contended that the beans met the standards of the exporting country, Indonesia, but the adjudicating authority emphasized the necessity of compliance with Indian standards upon import. 3. Validity of Test Reports and Timing of Testing: A significant contention was the timing of the tests conducted by the Export Inspection Agency (EIA), which occurred approximately 11 months after the initial import. The appellant argued that the delay in testing could have led to natural deterioration of the cocoa beans, thus affecting the test results. The tribunal acknowledged the potential impact of this delay but noted that the imports in September 2014 were tested within a more reasonable timeframe. 4. Authority and Procedure for Confiscation and Re-export under the Customs Act: The adjudicating authority ordered the confiscation of the cocoa beans under Section 111(d) of the Customs Act, with an option for re-export upon payment of a redemption fine. The appellant argued that confiscation was not justified as the goods were compliant with the BIS standards at the time of import. The tribunal found that the goods were released based on the High Court's directions, and the subsequent recall and re-export were in accordance with legal procedures. 5. Imposition and Reduction of Redemption Fine and Penalty: The appellant challenged the imposition of a redemption fine and penalty, arguing that they were not warranted given the circumstances. The tribunal considered the facts and circumstances, including the delay in testing and the initial compliance with foreign standards, and decided to reduce the redemption fine from Rs. 15,00,000/- to Rs. 5,00,000/- and the penalty from Rs. 5,00,000/- to Rs. 2,00,000/-. The appeal was partially allowed to this extent, providing some relief to the appellant. In conclusion, the judgment addressed the complexities involved in the importation of goods that lack specific domestic standards, the interplay between different regulatory frameworks, and the procedural aspects of customs enforcement. The tribunal's decision to reduce the financial penalties reflects a balanced consideration of the appellant's arguments and the regulatory requirements.
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