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TMI Blog2024 (6) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... and looking into the conduct of the appellant, which is still under investigation, re-export may not be permitted. The impugned goods have been tested to be unfit for human consumption as per FSSAI standards. Neither the Adjudicating Authority nor the Appellate Authority has given evidence vis- -vis the Sri Lankan Standards. Moreover, it appears that the said conclusion has been arrived at with the presumption that there are no other uses of areca nuts other than for human consumption. It is found that there are certain industrial uses of the areca nuts - it cannot be presumed that the impugned areca nut, if re-exported, would be used only for human consumption in Sri Lanka and elsewhere. It cannot also be presumed that the consignment will be routed back to India. The ends of justice can be met if suitable redemption fine is imposed in lieu of confiscation and if the appellant is suitably penalized while permitting the re-export of the impugned goods. Indian Authorities should not have any objection if the impugned goods are reexported. In case of such an apprehension, an endorsement can be made on the export documents that the goods are permitted to be re-exported as they were fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad quality and were infested with visible molds inside; the samples did not comply with the grades stipulated and that the areca nuts were a mixture of Indonesian and Sri Lankan origin. Statements of concerned persons from the importers and others were recorded and the imported consignments were seized under Section 110 of Customs Act, 1962 under the reasonable belief that they are liable for confiscation. The appellants request that they may be permitted to re-export the consignments was rejected by the Revenue. Hon ble High Court, vide Order dated 04.12.2023, disposed the Writ Petitions filed by the appellants, directing the Department to decide the representation of the appellants for re-export of goods within ten days. Accordingly, the Adjudicating Authority passed an order rejecting the request of the appellants for re-export of the goods; confiscating the imported goods absolutely and imposing penalty on the appellants. On an appeal filed by the appellants, Appellate Authority passed a common impugned order, including the above imports and imports of M/s Sherry Network Pvt. Ltd, vide Bills of Entry No.7713276 dated 07.09.2023, 8102011 dated 01.10.2023 and 8102013 dated 01.10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m International Vs Commissioner of Customs Tuticorin (2023) 9 Centax 261 (Mad.) Genuine Spices Vs Commissioner of Customs Tuticorin. 2015 (324) ELT 83 (Ker.) Haripriya Traders Vs Union of India 2021 (377) ELT 865 (Tri-Mad) Royal Imports Exports Vs Commissioner of Customs Tuticorin. 2003-TIOL-1525-HC-MAD-CUS Sankar Pandi Vs Union of India 2010-TIOL-147-SC-CUS Union on India Ors Shri Sankar Pandi 2021-TIOL-232-CESTAT-Bang Nitta Gelatin India Ltd. Vs Commissioner of Customs Cochin. 2021 (377) ELT 458 (Tri-Chennai) Selvam Industries Ltd. Vs Commissioner of Customs Tuticorin 4. Learned Counsel for the appellants submits, also, that the appellants are regular importers having imported about 100 consignments of areca nut. In all the previous cases of import, the goods were cleared after testing by the Public Health Officer at the Customs station. In this case, Revenue has recorded a statement of the Public Health Officer stating that he did not know the parameters and standards of areca nut in regards to areca nuts. He further submits that it is not proper on the part of the Revenue to extrapolate the messages exchanged between the appellants and the foreign supplier in the year 2018, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that the investigation could lay their hands on the telephonic messages exchanged by the appellants and the foreign suppliers regarding the quality of the areca nut to be supplied; therefore, it cannot be said that the importer/ appellant has no knowledge and hence mens rea regarding the quality of the imported areca nuts. The Department has reasons to believe that the importer attempted to smuggle in low quality infested areca nuts into the country. As the impugned goods have been declared to be unfit for human consumption, they pose a health hazard to humans and therefore, the request for re-export was rightly rejected by the original and appellate authorities. 8. Learned Authorized Representative submits in addition that the instances of permission of re-export of areca nut by the same Commissionerate, cited by the appellants are not relevant as the imported areca nuts therein were not declared to be unfit for human consumption. The other cases relied upon by the appellants are not relevant as the facts of the cases are different. He relies on the following cases: 2022 (382) ELT 182 (Bom.) Star Impex Vs UOI. 2010 (259) ELT 622 (Tri. Del.) Ritu Agencies 2008 (232) ELT 774 (SC)- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , damaged nut, damaged by mold inspects, lead (as Pb) and copper (as cu) above the maximum prescribed limit. Sample shows presence of Insect Infestation, fungal growth and musty in odor. The sample is thus substandard under section 3(1)(zx) and unsafe under sections 3(1)(zz)(x)(xi)(xii) of the FSS Act 2006. (iii) CRCL Report dated 16.11.2023 The samples do not meet the requirement of betel nut/ areca nut as per FSSAI 2011 and IS 16962:2018. The samples received were broken by molds and insects. 11. The appellants contend that the samples were tested at their back and no reports were given to them and the procedures laid down under the FSSAI Rules have been violated and the test reports were given to them after the prescribed time limits. However, revenue contends that the appellant was aware of the fact that the imported areca nuts are of inferior quality; this is evident from the submissions of the appellants at the time of personal hearing before the Adjudicating Authority. The appellant does not seem to contest the test reports on merits even at this stage. Their contention is that in case the areca nuts are found to be of inferior quality and unfit for human consumption, they m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions and going through the records of the case, we find that though the appellants allege that the procedures laid down under FSSAI Regulations regarding the testing of samples have not been followed, the reports as such are not challenged by the appellants. Their only request appears to be that they may be permitted to re-export of goods; they contend that their foreign supplier has accepted to take back the goods as they are of inferior quality. Department contends that the importer has not supplied any documentary proof like affidavit, e-mail, SMS etc. to substantiate their claim; looking into the fact that the appellants have not yet transferred the money for the consignment to the foreign supplier and looking into the conduct of the appellant, which is still under investigation, re-export may not be permitted. , 15. Department proposes to rely on the decision of Hon ble Bombay High Court in the case of Star Impex 2022 (382) ELT 182 (Bom.). We find that the facts of the case are different as there was provisional assessment in that case it is not mentioned whether the appellants therein objected to the manner of testing of the samples. We find that to that extent the ratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nintended financial loss to the appellant and would cause wasteful outflow of foreign exchange from the Indian importer to the foreign buyer. The Department contends that no evidence of the foreign buyer accepting the consignment has been given. However, we find that vide letter dated 24.04.2024, M/s DLK Spice Export, Sri Lanka have requested the appellants to make the outstanding payment and to avoid financial strain, immediate action may be taken to re-export the goods. In view of the same, we are of the opinion that benefit of doubt can be given to the appellant as the fact that they are regular importer is not denied. Therefore, we find that ends of justice can be met if suitable redemption fine is imposed in lieu of confiscation and if the appellant is suitably penalized while permitting the re-export of the impugned goods. Indian Authorities should not have any objection if the impugned goods are reexported. In case of such an apprehension, an endorsement can be made on the export documents that the goods are permitted to be re-exported as they were found to be unfit for human consumption as per Indian standards. We find that as the goods are of value of Rs.10 Crore impositio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that Adjudicating Authority has imposed a fine of Rs.2 Crores on the appellants. Having regard to the facts and circumstances of the case a deterrent penalty would be sufficient. Therefore, in view of our discussion as above, we are inclined to reduce the penalty to Rs.10 Lakhs. 19. Appeal No. C/60206/2024 is held to be non-maintainable as no appeal was filed with the First Appellate Authority. 19.1. Accordingly, the appeal No. C/60207/2024 is partially allowed modifying the impugned order in the following terms: i. Absolute confiscation is set aside and the appellants are allowed to re-export the impugned goods on payment of a fine, in lieu of confiscation, of Rs.25 Lakhs (Rupees Twenty-Five Lakhs only). Penalty imposed on the appellants under Section 112 of the Customs Act, 1962 is reduced to Rs.10 Lakhs. ii. The impugned goods are permitted to be re-exported subject to the compliance of the impugned order subject to the above modifications. iii. The appellant shall submit an undertaking that the goods will not be routed back to the country. iv. An endorsement shall be made in the export documents to the extent that the goods are being re-exported for the reason that they are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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