2018 (8) TMI 1348 - AT - Customs

Confiscation of export goods - Export of prohibited goods - non-basmati rice - Circular No. 32/2008 dated 30th September 2008 - Held that - It is seen from the circular of the Director General of the Foreign Trade that even if there was some dispute on the nature of the goods being exported, the consignment was to be allowed for export after drawal of samples. On going through the records of the case, however, upon detection of the non-basmati rice, the goods were permitted to be taken back without completing the export. The export consignment had to be permitted or subject to testing upon the existence of certain parameters. It would appear from the record that no such preliminaries had been ascertained. Furthermore, it also appears from the statement of the Director of the appellant-exporter that export of non-basmati rice had occurred by oversight following which the export consignment itself had been withdrawn - even though the confiscation may have been justified from the admission made by the appellant at the time of attempting to export, the imposition of redemption fine and penalty does appear to be excessive - the redemption fine reduced to ₹ 1 lakh and reduce the penalty to ₹ 50,000/-. Appeal allowed in part.

Summary

Issues:
Appeal against confiscation of non-basmati rice under Customs Act, 1962 based on contravention of notification no. 38/2007 of DGFT.

Analysis:
1. The appellant, M/s Shri Jalaram Rice Industries, challenged the confiscation of 499350 kgs of non-basmati rice valued at &8377; 94,88,300/- under sections 113(d) and 113(i) of the Customs Act, 1962, along with a fine and penalty imposed under section 114. The appeal was against the order-in-original issued by the Commissioner of Customs (Export), JNCH, Nhava Sheva.

2. The appellant's counsel argued that the rice, initially declared as basmati, was later deemed non-basmati based on a test result, but the testing procedure prescribed by DGFT was not followed. Reference was made to a previous Tribunal decision in a similar case.

3. The Authorized Representative for the respondent highlighted the appellant's admission that non-basmati rice was mistakenly exported and expressed willingness to pay the fines. The statement of officers supervising the cargo stuffing and the rice supplier supported the claim that both basmati and non-basmati rice were procured for export.

4. The Tribunal observed discrepancies in the handling of the export consignment as per DGFT circulars and noted that the goods were allowed to be taken back upon detection of non-basmati rice, without completing the export process.

5. Referring to a specific DGFT circular, the Tribunal emphasized the need for testing based on grain length parameters before export. It was noted that the test results did not conclusively establish the rice variety being exported, leading to a reduction in the redemption fine and penalty imposed on the appellant.

6. Consequently, the Tribunal reduced the redemption fine to &8377; 1 lakh and the penalty to &8377; 50,000, considering the oversight in exporting non-basmati rice and the lack of conclusive testing results. The appeal was disposed of on 31/07/2018.