Custom, Excise & Service Tax Tribunal
M/S Nitta Gelatin India Ltd vs Central Board Of Indirect Taxes And ... on 5 November, 2024
C/20363/2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT No. 1
Customs Appeal No. 20363 of 2024
(Arising out of Order-in-Appeal No. COC-CUSTOMS-APP-112/2023-24
dated 26.12.2023 passed by the Commissioner of Customs
(Appeals), Cochin.)
M/s. Nitta Gelatin India
Limited,
54/1445, SBT Avenue,
Panampilly Nagar, Appellant(s)
Cochin,
Kerala - 682 036.
Represented by Mr. P. Sahasranaman,
Senior General Manager, (F&A) & CFO.
VERSUS
The Commissioner of Customs,
Custom House, Respondent(s)
Cochin - 682 009.
APPEARANCE:
Mr. M. Balagopal, Advocate for the Appellant Mr. Rajesh Shastry, Superintendent (AR) for the Respondent CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL) HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL) Final Order No. 21234 / 2024 DATE OF HEARING: 05.11.2024 DATE OF DECISION: 05.11.2024 PER : R. BHAGYA DEVI This appeal is directed against Order-in-Appeal No. COC- CUSTM-APP-112/2023-24 dated 26.12.2023 passed by the Commissioner of Customs (Appeals), Cochin.
2. The appellant had imported goods declared as demineralised fish scale from China and filed Bill of Entry No. Page 1 of 7 C/20363/2024 3765981 dated 16.12.2022. The Animal Quarantine Authorities denied the clearance of the imported goods and also it was found that the import was in violation of the provisions of paragraph 7(B) of General Notes regarding the Import Policy to the Foreign Trade Policy 2015-2020. Accordingly, the original authority confiscated the impugned goods and based on the request of the importer allowed them to redeem the goods on payment of redemption fine of Rs.10,00,000/- under Section 125 of the Customs Act, 1962, for the sole purpose of re-export and also imposed penalty of Rs.5,00,000/- on the importer under section 112(a) of the Customs Act, 1962. Appeal filed against this order was confirmed by the Commissioner (Appeals). Hence this appeal.
3. The Learned Counsel submits that the appellant is a regular importer and exporter of identical goods and they take all reasonable precautions and certifications from the load port with respect to the quality of the goods under import from the Veterinary (Health Certificate) issued by the Entry/Exit Inspection and Quarantine Department of the Peoples Republic of China. He submitted that with respect to the subject consignment, it was specifically declared that the product is free from all relevant OIE listed Pathogens for fin fishes. It is also submitted that the import is a natural one which can be damaged during transit due to power fluctuations in the vessel or damage in the packing or on account of temperature variation in the container. Further, it is submitted that since the appellant is a regular importer of identical goods is well aware of the fact that it would be subject to testing prior to the clearance for home consumption, therefore, it is submitted that the confiscation and consequential imposition of redemption fine and penalty are not at all warranted in the facts and circumstances of the case. It is further submitted that the various Tribunals and Hon'ble High Courts have time and again held that no redemption fine or penalty can be imposed, if the goods are ordered to be re-exported. It is also stated that the imposition of Page 2 of 7 C/20363/2024 redemption fine and penalty will depend on the facts and circumstance of each case. The Board also clarified that in cases of bona fide mistakes, the re-exports will be permitted without imposition of penalty or with the nominal penalty. In the present case, as the appellant is a bona fide importer having taken all necessary precautions to see that the laws are not violated, the imposition of fine and penalty was totally unwarranted and therefore, is liable to be set aside. He placed reliance on the following judgments:
• Commissioner of Customs (Chennai-II) Vs. Magal Engg. Tech Pvt. Ltd. 2021 (378) ELT 409 (Mad.) • Zenith Rubber & Plastic Works Vs. Commissioner of Customs (Export), Mumbai 2010 (262) ELT 272 (Tri- Mumbai) • Sankar Pandi Vs. Union of India 2002 (141) ELT 635 (Mad.) • Union of India Vs. Sankar Pandi (2018 (360) ELT A214 (S.C.) • Regal Impex Vs. Commissioner of Customs ICD, TKD, New Delhi (2016 (332) ELT 835 (Tri-Del.)
4. The Learned Authorised Representative reiterating the findings of the Commissioner (Appeals) submitted that redemption fine and penalty is rightly imposed in view of the following decisions:
• AK Jewellers Vs Commissioner of Customs Mumbai 2003 (155) ELT 585 (Tri-Mum) • Commissioner of Customs Vs Elephanta Oil and Inds 2003 (152) ELT 257 (SC) • Commercial Vehicles Ltd. Vs. Commissioner of Customs Chennai 2024 (6) TMI 311-ESTAT-Chennai • NL Technologies PL Vs Commissioner of Customs Cochin 2019 (368) ELT 541 (Ker.) • Hemant Bhai R. Patel Vs Commissioner of Customs, Ahmedabad 2003 (153) ELT 226 (Tri-LB)
5. Heard both sides. The only issue to be decided in this appeal is whether redemption fine and penalty is to be imposed when the goods are allowed to be re-exported, in the facts and circumstances, of the present case.
Page 3 of 7C/20363/2024
6. The Larger Bench relied upon by the Revenue in the case of Hemant Bhai R. Patel Vs Commissioner of Customs, Ahmedabad (supra) observed as follows:
'We, therefore, answer the questions referred in the affirmative and hold that it is open to the adjudicating authority to impose redemption fine as well as penalty even when permission is granted for re-exporting the goods'. Thus, the Bench was only answering the question whether redemption fine and penalty can be imposed while ordering for re-export of goods.
6.1 In the case of Commissioner of Customs Vs Elephanta Oil and Inds. (supra), the Hon'ble Supreme Court observed as follows:
"19. In this view of the matter, it is apparent that respondent knowing fully well the import policy imported prohibited goods i.e. import of canalised item namely beef tallow and, therefore, the Collector was fully justified in imposing the penalty under Section 112 of the Customs Act.
6.2 In the case of NL Technologies PL Vs Commissioner of Customs Cochin (supra), the importer had imported electronic waste (e-waste), ordinarily means waste electronics/electrical goods or equipment's, which have become unfit for use. E-waste poses danger to environment as it contains toxic materials. Implementation of an environmentally sound e-waste management process is the object of introducing E-waste (Management) Rules, 2016 (hereinafter referred to as 'the Rules'). The Hon'ble High Court of Kerala observed as follows:
"14. In the instant case, the printers imported by the company were prohibited goods within the meaning of Section 2(33) of the Act as they were goods for which EPR-Authorisation was required under the Rules. Therefore, the customs authority had the power to confiscate them.
15. At this juncture, it is also to be noted that, as per the entry in item No. 4 in Schedule IV of the Rules, customs authority under the Act has the duty to verify the EPR-Authorisation and to inform the Central Pollution Control Board of any illegal traffic for necessary action and also to take action against the importer for violations under the Act".Page 4 of 7
C/20363/2024
7. However, in the present case, the products imported are perishable and have to meet the standards specified by the Animal Quarantine Authority. The order of the original authority clearly held that the Animal Quarantine authority vide letter dated 05.01.2023 on testing the consignment was found to be positive for OIE pathogen, hence, could not be released. It is a fact that at the time of import, the appellant had produced Veterinary Health Certificate from the country of import, which stated that the product is free from all relevant OIE listed pathogens for fin fishes. It is only after testing, it was found that the product is not fit for consumption and hence, the Animal Quarantine Authority rejected the consignment. As rightly claimed by the appellant, since the import was based on the correct specifications, they could not be found fault with and the question of fine and penalty did not arise. The Board Circular No.100/2003-Cus dated 28.11.2003 (reproduced below) clearly states that depending upon the facts and circumstances of the case, the Commissioner has the discretion to impose redemption fine and penalty, thus, implying that it is not necessary that in all cases redemption fine and penalties needs to be imposed. Especially in those cases, where the appellant is forced to re- export when the goods imported are found to be not as per their specifications.
Circular No. 100/2003-Cus., dated 28-11-2003 F. No. 450/58/2003-Cus. IV Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Requirement of "No Objection Certificate" from RBI for the re-export of the goods shipped contrary to the instructions of the importers - Regarding.
I am directed to refer to the instructions contained in Board's letter F. No. 18/1/59-Cus. (CRC), dated 8-6-1959 on the above mentioned subject wherein it was stated that the goods shipped contrary to the instructions of the importer and the importer intends to re-export the same, the Commissioner may use his discretion and release the goods on payment of a nominal penalty or without any penalty as he deems fit, provided Page 5 of 7 C/20363/2024 that he is satisfied that the goods have been imported as a result of bona fide mistake and contrary to the importer's instructions subject to production of a "no objection certificate" from the Reserve Bank of India for re-shipment of the goods. In this regard, trade has expressed difficulties in obtaining the "NOC" from RBI and stated that, at times, it takes a minimum of one week to obtain the certificate. Therefore, they have requested for allowing re-shipment without insisting on the production of "NOC" from RBI.
2. The matter has been examined in consultation with the Reserve Bank of India who have opined that the "NOC" from RBI need not be insisted for re-export of such imported items. Therefore, the Commissioner may use his discretion and allow re-export without the requirement of a "No Objection Certificate" from the Reserve Bank of India, on payment of a nominal penalty or without any penalty as he deems fit, provided that he is satisfied that the goods have been imported as a result of bona fide mistake and contrary to the importer's instructions.
3. Kindly bring the above instructions to the knowledge of all concerned for strict compliance.
4. Hindi version will follow.
8. In the appellant's own case in similar set of facts for identical goods, this Tribunal held as follows:
"2. Briefly the facts of the present case are that the appellant filed Bill of Entry No.4421415 dt. 15/12/2017 for the clearance of 'Decalcified Fish scale for Collagen' (Fish Protein) under heading 35040099. The Bill of Entry was assessed provisionally under PD Bond and goods were cleared on 29/12/2017 on the basis of provisional clearance/NOC from Animal Quarantine Department. However, the Animal Quarantine & Certificate Services under the Ministry of Agriculture, Department of Animal Husbandry, Dairying & Fisheries, Chennai vide their Final Order in File No.11-17C/2017/AQCS(SR)/2263 dt. 30/01/2018 addressed to the importer, declined clearance to the goods..............
3-5. ..............
6. After considering the submissions of both sides and perusal of the material on record, I find that the original authority has confiscated the Page 6 of 7 C/20363/2024 goods and allowed reexport of the goods subject to payment of redemption fine of Rs.50,000/- under Section 125 and payment of penalty of Rs.25000/- under Section 112 of the Customs Act, 1962. Further I find that the Commissioner(Appeals) in the impugned order has specifically allowed the benefit to the appellant under Section 74 of the Customs Act, 1962 for reexport of goods as the governing factors under Section 74 for reexport of goods imported have not been violated by the appellant. Further I find that when the goods allowed to be reexported by the Commissioner(Appeals), then the imposition of redemption fine and penalty is not sustainable in view of the various decisions relied upon by the appellant cited supra. I find that the Tribunal in the case of Kenda Farben India Pvt. Ltd. cited supra, has held that imposition of redemption fine is not justified when permission was granted to reexport the goods. Similarly in the case of Siemens Public Communication Networks Ltd. cited supra, the Tribunal has held that "redemption fine and penalty cannot be imposed when the Commissioner (Appeals) vide his impugned order has given an option to the appellant to reship the goods back to the supplier, the redemption fine and penalty imposed by him was not justified".
8. In view of the above, we do not find any justifying reasons for imposition of redemption fine and penalty. The impugned order is set aside. Consequently, the Appeal is allowed.
(Operative portion of the order was pronounced in open court on conclusion of hearing.) (D.M. MISRA) MEMBER (JUDICIAL) (R. BHAGYA DEVI) MEMBER (TECHNICAL) rv Page 7 of 7