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TMI Blog2024 (11) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... confiscation of the Areca Nuts imported by the respondents was ordered? - HELD THAT:- CESTAT hears an appeal, and therefore, all the arguments including the submissions relating to decision on Regulation 10 (11) of the Regulations 2017 can be examined by the Tribunal. Scope of Tribunal is wide enough to examine whether the discretion exercised by the authority was legal and proper. It can also take a different view after examining the reasons taken into consideration by the concerned authority. In the present case, the CESTAT found that the Areca Nuts may not be fit for human consumption, but the same are of such a nature which can be used for ancillary and industrial purposes by its original consignee or seller. Having reached to such a conclusion, it decided to direct the authority to allow the re-export of the food items which is provided as one of the option available under Regulation 10 (11) of the Regulations 2017. It, therefore, has interfered with the discretion exercised by the concerned authority and directed for re-export. We also do not find force in the arguments raised by learned counsel for the appellant with regard to reducing of fine of Rs. 2 crores to Rs. 25 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the Revenue that as per the prior intelligence received by DRI, certain importers were engaged in malpractice of mixing consignments of Areca Nuts of Sri Lanka origin with that of shipments originating outside the SAARC territory and paying nil basic customs duty on the basis of notification dated 01.03.2000. It was suspected that the respondents were engaged in such exports and, therefore, the consignments imported by the respondents were put on hold and examined by the customs authority along with the officers of DRI in the presence of the authorized representatives of the respondent-importers. Samples were drawn from the said consignments and sent for testing to three different laboratories, namely, (i) Central Revenue Control Laboratory, New Delhi; (ii) Areca Nut Research and Development Foundation, Mangalore; and (iii) National Food Laboratory, Ghaziabad. It has been stated that as per the examination and testing of the representative samples, it was found that the Areca Nuts were not meeting the requirements as per FSSAI, 2011 and were found to be broken by moulds and insects. As per the report received from the Areca Nut Research and Development Foundation, the quali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods was not liable to be interfered with. 4. Learned counsel for the appellant has taken pain to take this Court to the order dated 14.12.2023 passed by the adjudicating authority to submit that there was no occasion to interfere with the said order by the appellate authority. The request for re-export made by the respondent importers was rejected. The respondents challenged the order in original by filing appeal before the appellate authority. In appeal the order dated 15.04.2024 passed by the adjudicating authority was upheld. 5. It was further submitted by learned counsel for the appellant that the respondents had not requested that the goods to be tested by any other A credited laboratory to prove that the goods were of edible grade. The respondent-importers preferred appeal before the CSTAT, who vide its order dated 07.06.2024 partially allowed the appeal, reducing the penalty to Rs. 10 lacs and setting aside the order of absolute confiscation. It permitted the goods to be re-exported on payment of fine of Rs. 25 lacs in lieu of confiscation of goods. 6. Learned counsel for the appellant further submitted that the CSTAT has wrongly interfered with the discretion available to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while various invoices which have been mentioned in the petition. 9. It is stated that in terms of the Customs Act, 1962 as well as Foreign Trade Policy, whenever any goods namely food items are being imported, the same are subject to Fumigation Certificate as well as Phytosanitary Certificate issued in terms of the requirements of FSSAI Department. The respondents on the basis of the aforesaid documents issued by the exporter filed bill of entries under Section 46 of the Customs Act for the purpose of clearance of goods. Since the imported Areca Nuts having originated from Sri Lanka, the same were subject to exemption from basic customs duty in terms of notification dated 01.03.2023. The respondents claimed the said exemption. It is submitted that the goods accompanied with the E. Country of origin certificate issued by the Sri Lankan Government duly affixed with bar code on the said certificates, which upon verification were linked to the Sri Lankan Website confirming the origin of goods from Sri Lanka. On 17.09.2023, the goods were imported vide bill of entry subject to examination and testing from Port Health Officer, Amritsar, who opined the samples were fit for human consumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that the order passed by the CESTAT does not warrant any interference. 12. We have carefully considered the written submissions as having been filed by both the parties and the judgments cited. We find that the only question which needs to be determined by this Court is whether the Tribunal has erred in setting aside the order in original and order in appeal whereby the absolute confiscation of the Areca Nuts imported by the respondents was ordered. 13. We find that the learned CESTAT while partly allowing the appeal, passed the following order:- 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said report to treat all the Areca Nuts to be of Sri Lankan origin, we find that the Supreme Court in Laltanpuh s case (supra) has held that the report of the Areca Nut Research and Development Foundation, Mangalore, about foreign origin of ceased goods could not be relied upon. At the same time, there is a certificate of origin, duly signed by the Assistant Director of Commerce, Colombo, which has been placed on record as Annexure R-13, which has not been found to be forged by the authorities. The verification of the consignment by the Department of Commerce, Sri Lanka dated 09.10.2023 is also on record. Another certificate of origin of 18,000 kg of Areca Nuts containing Sri Lanka Areca Nuts is also on record. The respondents have also placed on record the gazette notification dated 26.03.2019 issued by the Democratic Socialist Republic of Sri Lanka whereby the import of Black Pepper, Areca nuts, Nutmeg/ Mace, Tamarind and Cinnamon is not permitted in Sri Lanka from any other country. Thus, it is apparent that the alleged allegation of Areca Nuts not being from Sri Lanka origin seems to be doubtful and on messages retrieved between the concerned partner of the respondents and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 re-exported. 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 Imposition of redemption fine of Rs 2 Cr is certainly harsh. We are of the considered opinion that a fine of Rs 25.00 Lakhs would be sufficient to meet the ends of justice and the goods can be permitted to be re-exported on payment of redemption fine. 21. The submission of learned counsel for the Revenue that once the authority has exercised its jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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