2014 (3) TMI 168 - AT - Customs

Import of goods declaring as Hydrogenated Vegetable Oils (Vanaspati Ghee) - mis-declaration - reexport - exemption under notification 02/2007-Cus dated 5.1.2007 - Upon testing the sample of the said goods, customs authorities found that the goods imported were not edible oil and did not conform to the standard of vanaspati laid down under PFA Rules, 1955 - Held that - When the imports of both the goods were deliberately imported and mis-declaration was made for unjust enrichment at the cost of exchequer, it cannot be said that the imports were bonafide. It is also surprising to note that in both the case when the offending goods were unfit for human consumption under the PFA Rules, 1955 how such goods were allowed to be re-exported without having regard to the hazardous character thereof. This is not a case to be leniently considered at all when adulteration is harmful to the human consumption. Therefore, re-export ought not have been allowed. Offending goods were hazardous in nature for human life, there is no scope to hold that the imports were stray import. Accordingly quantum of redemption fine and penalty imposed in adjudication should not be interfered. Whatever the quantum of import may be, when the goods become offending goods that contravenes the provisions of law of Customs and causes serious prejudice to public interest under Section 11(u) read with Section 11(k) of customs Act, 1962 which deals with offence relating to human life. Therefore both appeals should be dismissed. Penalty and Redemption fine - Held that - The quantum of import is extremely high and because he brought huge quantity of vegetable oil in appeal No. C/736/07, he found it easier to hide the offending goods in the guise of vegetable oil and attempted to clear such goods availing benefit of exemption notice. Similarly, being an experienced appellant, he could attempt to bring spurious bakery shortening which is covered by appeal No. C/192/08. - Levy of penalty and Redemption fine confirmed.

Summary

Issues:
1. Mis-declaration and import of non-edible oil as edible oil.
2. Mis-declaration and import of Bakery Shortening not conforming to standards.
3. Imposition of penalty and redemption fine.
4. Appeal against waiver of penalty and reduction of redemption fine.
5. Consideration of re-export of offending goods.
6. Applicability of redemption fine and penalty in both cases.

Analysis:
1. The judgment addresses the mis-declaration issue involving the import of non-edible oil as edible oil. The appellant imported goods mis-declared as Hydrogenated Vegetable Oils, which were found to be non-edible and not conforming to standards. The Customs authorities intervened, discovering the mis-declaration and imposing custom duty and penalty under the Customs Act, 1962. The Tribunal upheld the imposition of penalty due to the seriousness of the offense, emphasizing the risk to human life posed by the mis-declaration and the non-edible nature of the imported oil.

2. Another issue discussed in the judgment is the mis-declaration and import of Bakery Shortening that did not conform to the prescribed standards. The Customs authorities found the imported goods unfit for human consumption, leading to the imposition of a penalty and redemption fine. The Tribunal examined the case and reduced the redemption fine in one appeal while setting aside the penalty in another. However, upon appeal by the Revenue, the matter was remanded back to the Tribunal for reevaluation.

3. The judgment also delves into the imposition of penalty and redemption fine in both cases. The Tribunal scrutinized the value of the goods involved, the deliberate mis-declaration, and the risk posed to public health due to the non-conformity with standards. It emphasized the seriousness of the offenses, the deliberate evasion of duty, and the need to deter such actions by imposing appropriate penalties.

4. An appeal was made against the waiver of penalty and reduction of redemption fine in one case. The Tribunal, after thorough examination and consideration of precedents, concluded that the appellant, being an experienced importer, deliberately mis-declared goods for unjust enrichment, contravening the law and evading customs duty. As a result, the Tribunal dismissed the appeals, emphasizing the lack of justification for reducing the redemption fine or penalty in the cases presented.

5. The judgment also raised concerns about the re-export of offending goods. It questioned the leniency shown in allowing the re-export of goods that were hazardous to human life, emphasizing the need for stricter guidelines and penal consequences for dealing with harmful goods in the future. The Tribunal highlighted the importance of considering public health and safety in such cases and recommended stricter measures to prevent such incidents.

6. Overall, the judgment underscores the gravity of mis-declaration, deliberate evasion of duty, and the risks posed to public health by importing non-conforming goods. It emphasizes the need for stringent penalties to deter such actions, especially when the imported goods endanger human life. The Tribunal's decision to dismiss the appeals and uphold the imposition of penalties reflects the commitment to upholding the law and safeguarding public interest in customs matters.