2017 (3) TMI 1065 - AT - Customs

Misdeclaration of goods - Pistachio Kernals Oil Stock Feed Grade - importer had specifically declared the item imported as not for human consumption, but on verification it was found that the appellant had misdeclared the goods in respect of use in order to escape the NOC from FSSAI as required for human consumption and that the consignment which is imported would be diverted or mixed with Pistachio for human consumption - whether the said consignment has been misdeclared by the appellant or otherwise? - Held that - Bare perusal of the said certificate of analysis of the samples drawn and sent by the Assistant Commissioner of Customs indicates that the said consignment of Pistachio Kernals feed grade is an animal feed and not for human consumption. On the face of such analytical report, we find that the lower authorities were in error to hold that there was misdeclaration on the part of the appellant - the Directorate of Plant Protection, Quarantine and Storage has also recommended the goods for consumption purposes and the declaration made by the appellant is for consumption as animal feed - FSSAI which gives Food Import Clearance System has specifically recorded that the consignment being declared by the appellant not for human consumption, does not require any FSSAI certificate and hence does not fall under the purview of FSSAI clearances and out of scope - In the absence of any prohibition on import of consignment of Pistachio Kernals not fir for human consumption, we find that the adjudicating authority has erred in absolutely confiscating the consignment - appeal allowed - decided in favor of appellant.

Summary

Issues:
Misdeclaration of imported goods for human consumption, Confiscation under Customs Act, 1962, Provisions of Section 111(d) and 111(m) of the Customs Act, 1962, Prohibition on import of goods, Adjudicating authority's decision, Appeal against order-in-original.

Analysis:
The case involved a dispute regarding the misdeclaration of imported goods meant for animal feed but suspected to be intended for human consumption. The appellant imported Pistachio Kernals Oil Stock Feed Grade declared as "not for human consumption." Customs authorities suspected misdeclaration and potential diversion for human use, leading to confiscation under Section 111(d) and 111(m) of the Customs Act, 1962. The adjudicating authority upheld the confiscation and imposed penalties, which was affirmed by the first appellate authority.

The appellant's counsel argued that the goods were never intended for human consumption and were declared only for animal feed. They presented evidence from analytical laboratories and relevant certificates supporting their claim. The departmental representative contended that the goods were fit for human consumption based on additional clarifications. The core issue was whether the consignment was misdeclared.

Upon reviewing the documents and evidence, the Tribunal found that the goods were correctly declared as animal feed, supported by analytical reports and certificates. The authorities erred in concluding misdeclaration without sufficient evidence. The Tribunal noted recommendations for consumption purposes by relevant authorities and the absence of FSSAI requirements for non-human consumption goods, indicating no violation of import laws.

The Tribunal highlighted Sections 111(d) and 111(m) of the Customs Act, 1962, emphasizing that no prohibition existed for importing the goods as animal feed. The adjudicating authority's decision to confiscate the consignment was deemed erroneous, as there was no misdeclaration or violation of import laws. Consequently, the Tribunal set aside the impugned order and allowed the appeal, ruling in favor of the appellant.

In conclusion, the judgment clarified the correct declaration of goods, absence of prohibition on import, and the legal basis for confiscation under the Customs Act, 1962. The decision emphasized adherence to import regulations and the importance of evidence in determining misdeclaration, ultimately overturning the confiscation order and upholding the appellant's position.