1991 (8) TMI 227 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction and validity of sample testing.
2. Applicability of the Prevention of Food Adulteration Act (PFA Act) and Customs Act for confiscation.
3. Consideration of reprocessing the adulterated goods.
4. Application of Section 125 of the Customs Act regarding redemption of confiscated goods.

Detailed Analysis:

1. Jurisdiction and Validity of Sample Testing:

The appellants argued that the learned Collector erred in holding that the three samples drawn and sent to the Central Food Laboratory were representative of the entire consignment. They contended that the samples were drawn only from some bags, and the confiscation of all six consignments based on three reports from the Central Food Laboratory on the analysis of three unrepresentative samples is without jurisdiction. The appellants also argued that the Central Food Laboratory must work under the Prevention of Food Adulteration Act framework, and if they had not done their task accordingly, the same should be ignored. The Collector's conclusion that the imported Toor Wholes were adulterated and confiscated the same was based on these reports.

2. Applicability of the PFA Act and Customs Act for Confiscation:

The learned JDR contended that under Section 11 of the Customs Act, 1962, read with Section 111(d) of the Customs Act, the Collector had the power to confiscate the adulterated goods. The imported pulses were adulterated and not fit for human consumption, as per the initial report of the Port Health Organisation and subsequent analysis reports of the Central Food Laboratory. The importation of the same was prohibited under Section 5 of the PFA Act, read with Section 11 of the Customs Act, and were liable for confiscation under Section 111(d) of the Customs Act. The Collector's power to confiscate the goods was within his jurisdiction and could not be called into question.

3. Consideration of Reprocessing the Adulterated Goods:

The appellants argued that the objection raised by the Central Food Laboratory for the clearance of the goods could be cured by reprocessing the same. They relied on Section 11(5) of the PFA Act, 1954, which empowers a Magistrate to order that the articles of food can be returned to the owner on executing a bond if they process the same and make it conforming to the prescribed standard of human consumption after reprocessing under the supervision of an officer. The appellants submitted that this power could be exercised by the Collector in terms of Section 6 of the PFA Act. The CFTRI's report indicated that during the milling process, almost the entire pesticide residues could be removed in the husk fractions, and the resulting dals might be free from contaminating chemicals. The appellants requested the Tribunal to remit the case to the Collector for reconsideration on the basis of samples after processing the goods and testing the same in a specialized laboratory like the Central Food and Technological Research Institute, Mysore.

4. Application of Section 125 of the Customs Act Regarding Redemption of Confiscated Goods:

The Tribunal noted that the learned Collector had not considered Section 125 of the Customs Act, which provides an option to pay a fine in lieu of confiscation. The Supreme Court decision in 1992 (61) E.L.T. 172 (S.C.) emphasized that the Collector should address whether to exercise discretion to allow the owner to redeem the goods on payment of a fine. The Tribunal concluded that the learned Collector should have considered the option to allow the appellants to pay a fine in lieu of confiscation, taking into account all relevant circumstances and provisions of the PFA Act, 1954, including Sections 6, 11, and 18.

Conclusion:

The appeal was allowed by way of remand with a direction to the Collector to consider whether to give the appellants an option to redeem the confiscated goods on payment of a fine. The adjudicating officer should take a decision in accordance with the law after hearing the appellants and considering all relevant circumstances and provisions of the PFA Act, 1954. The adjudicating authority should also consider the fact of release of similar consignments by the Bombay Custom House, subject to the production of evidence in this regard.