1997 (11) TMI 242 - AT - Customs

Summary

Issues:
1. Confiscation of tea shipment due to non-conformity with declared specifications.
2. Allegation of violation of Customs Act against the exporters.
3. Argument of exporters being victims of fraud by the supplier.
4. Imposition of penalty on exporters for the non-conforming shipment.

Detailed Analysis:

Issue 1: Confiscation of tea shipment due to non-conformity
The judgment revolves around the confiscation of a tea shipment by the Collector of Customs, Calcutta, due to non-conformity with declared specifications. The Customs examination revealed that the tea consisted more of powdered stems and less of leafy matter, not meeting P.F.A. specifications. The Tea Board recommended against export, leading to a show cause notice for confiscation under Customs Act provisions.

Issue 2: Allegation of violation of Customs Act
The exporters argued that they were not at fault as they had sourced the tea from a supplier who provided inferior quality. They claimed innocence and placed responsibility on the supplier for cheating them. Despite personal hearings, the Collector upheld the confiscation order, leading to the appeal before the Tribunal.

Issue 3: Argument of exporters being victims of fraud
The exporters contended that they acted in good faith, entrusting the export job to the supplier. They emphasized their lack of mens rea and asserted they were victims of circumstances. Citing various legal precedents, they argued against the imposition of penalties due to their alleged innocence in the supplier's fraud.

Issue 4: Imposition of penalty on exporters
The Tribunal, after careful consideration, rejected the exporters' arguments. It differentiated the case from cited legal precedents, emphasizing the non-conformity with food standards under the Prevention of Food Adulteration Act. The Tribunal held that exporters cannot evade liability for exporting non-conforming goods, emphasizing their duty to ensure specified quality. Ultimately, the Tribunal upheld the penalty and confiscation, rejecting the appeal.

In conclusion, the judgment underscores the exporters' responsibility to ensure conformity with specified standards, rejecting their plea of innocence based on being misled by the supplier. The case highlights the stringent enforcement of quality standards in exports under relevant legal provisions, leading to the rejection of the appeal against the confiscation and penalty imposed.