2016 (9) TMI 170 - AT - Customs

Imposition of Redemption Fine - re-import of rejected assorted tea exported earlier - Duty Entitlement Pass Book Scheme export rejected due to quality reasons Section 125 of the Customs Act, 1962 - failure to get clearance from the Health Officers and the sample does not conform to FSSAI Standard and the same was unsafe as the sample is not free from extraneous matter - Held that - the import of edible food products require mandatory clearance from the Port Health Officer and Local Health Authority. Such imports would also include the re-import and those food articles found unsafe cannot be allowed to be cleared from home consumption. The unsafe goods being not permitted to be released as per the Food Safety and Standards Act, 2006 are prohibited under the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1092), for not being as per the standards laid down by the Food Authority under the provisions of the Act and the Rules and Regulations made thereunder - reimported goods failed to get clearance from health officers and held as unsafe and was liable to confiscation - imposition of redemption fine upheld. Imposition of penalty - Section 112(a) of the Customs Act, 1962 Held that - no intention of fraud involved penalty not imposable - appeal disposed off partly allowed in favor of appellant.

Summary

Issues:
1. Confiscation of goods under Customs Act and Food Safety and Standards Act.
2. Imposition of redemption fine and penalty under Customs Act.
3. Compliance with FSSAI standards for imported goods.
4. Interpretation of legal provisions related to import of food articles.

Analysis:
1. The appeal was against an order imposing a redemption fine and penalty under the Customs Act for confiscation of tea exported under DEPB scheme, which was re-imported due to quality issues. The Commissioner had confiscated the tea under various provisions of the Food Safety and Standards Act and the Foreign Trade (Development and Regulation) Act, citing non-conformity to FSSAI standards and safety concerns.

2. The appellant argued that the iron fillings in the re-imported tea were below the permitted level, and the tea was not meant for consumption in India but for re-export to Poland. The appellant contended that there was no mens rea for imposing a penalty, citing relevant judgments and standards set by BIS. The appellant challenged the legality of the confiscation order.

3. The Commissioner justified the confiscation based on non-conformity to FSSAI standards and safety regulations. The Commissioner referred to Circulars and legal provisions mandating clearance for imported food products, emphasizing the need for compliance with domestic laws and safety norms. The Commissioner held that the goods were unsafe as per FSSAI standards and thus liable for confiscation under relevant Acts.

4. The Tribunal upheld the confiscation but dropped the penalty, noting the absence of mens rea. The Tribunal agreed with the Commissioner's findings on non-conformity to FSSAI standards but found the penalty unjustified. The Tribunal emphasized the importance of compliance with import regulations and safety standards while allowing the appeal partly, modifying the order by upholding the redemption fine but dropping the penalty.

In conclusion, the Tribunal upheld the confiscation of the tea under relevant Acts due to non-conformity to FSSAI standards but dropped the penalty citing lack of mens rea. The judgment highlighted the significance of compliance with safety regulations and import laws while addressing the appeal against the imposition of redemption fine and penalty under the Customs Act.