2017 (11) TMI 663 - AT - Customs

Whether the learned Commissioner is justified in passing an order of confiscation, in respect of lactose (claimed edible grade) imported by the respondent, which was found to be unfit for human consumption, on being tested, whether allowing redemption without any fine and penalty for re-export under the provisions of Section 125 & Section 112 of the Customs Act, 1962 is proper or redemption fine should have been imposed? Held that - the learned Commissioner have allowed re-export in terms of the CBEC Circular No.100/2003Cus dated 28th November, 2003, wherein the Board have given discretion to allow re-export of goods found not fit for import with or without penalty - there is no error in the impugned order of the Commissioner in his exercising the discretion not to impose penalty. - non imposition of redemption fine was in terms of discretion under Section 125 of the Customs Act, 1962 read with CBEC Circular. Appeal dismissed - decided against Revenue.

Summary

Issues:
Whether the Commissioner was justified in passing an order of confiscation in a case involving imported lactose claimed as edible grade but found unfit for human consumption, and whether allowing redemption without any fine and penalty for re-export under specific provisions of the Customs Act was appropriate.

Analysis:
The appeal before the Appellate Tribunal CESTAT ALLAHABAD revolved around the issue of whether the Commissioner's decision to order confiscation of imported lactose, deemed unfit for human consumption upon testing, was valid. The Commissioner's findings highlighted that the goods were sent for testing to assess their suitability for consumption, as per the guidelines in CBEC Circular No.58/01. Despite lactose not being mandatory under BIS Standards, the Circular specified that if the product failed the test, re-exportation or destruction was necessary. The Commissioner concluded that the goods violated the Prevention of Food Adulteration Act and Customs Act, justifying confiscation under Section 111(d) of the Customs Act, 1962. Notably, there was no evidence of intentional non-compliance by the importer.

During the proceedings, the appellant presented evidence that the goods had been re-exported after the impugned order, in line with the Commissioner's decision under CBEC Circular No.100/2003. The Tribunal noted the Commissioner's discretion in allowing re-export without imposing a penalty, as per the Circular. The appellant argued that lactose did not fall under mandatory BIS Standards or the Prevention of Food Adulteration Act, further supporting the lack of penalty imposition. The Tribunal upheld the Commissioner's decision, emphasizing the discretionary power under Section 125 of the Customs Act, 1962, and the relevant CBEC Circular.

In conclusion, the Appellate Tribunal dismissed the Revenue's appeal, affirming the Commissioner's decision regarding the confiscation and redemption process. The Tribunal found no error in the Commissioner's exercise of discretion in not imposing a penalty, considering the circumstances and applicable Circulars. The judgment highlighted the importance of adherence to regulatory standards and the Commissioner's authority to make informed decisions based on the specific case details and relevant legal provisions.