Custom, Excise & Service Tax Tribunal
United Exports vs C.C.-Kandla on 17 July, 2015
In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
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Appeal No : C/11943/2014
(Arising out of OIA-25-26-2014-CUS-COMMR-A--KDL passed by Commissioner of Customs-Kandla)
United Exports : Appellant (s)
Vs
C.C.-Kandla : Respondent (s)
Represented by:
For Appellant (s) : Mrs. Prabjyoti K Chadha (Advocate) For Respondent (s) : Shri S. Shukla (Authorised Representative) For approval and signature: Mr. H.K. Thakur, Honble Member (Technical) 1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Departmental authorities?
Yes
CORAM:
MR. H.K. THAKUR, HONBLE MEMBER (TECHNICAL)
Date of Hearing/Decision: 17/07/2015
Order No. A/11057/2015 Dated 17/07/2015
Per: H.K. Thakur
This appeal has been filed by the appellant against OIA No. 25-26/2014 Cus/Commr(A)/KDL Dated 05/02/2014 passed by Commissioner(Appeals) Kandla as first appellate authority. The issue in the present appeal is whether exported goods were Basmati Rice as per Serial No. 93(RE-2007)/2004-2009 Dated 01/04/2008.
2. Mrs. Prabjyoti k Chadha (Advocate) appealing on behalf of the appellant argued that Basmati Rice, including Pusa Basmati-1121, means rice having grain length of more than 6.61mm and length to breadth ratio of the grain to be more than 3.5. It was her case that the grain size in the existing notification no. 93(RE-2007)/2004-2009 was substituted by notification no. 57/2009-2014 Dated 17/08/2010. Learned advocate strongly argued that getting the samples of Rice Tested from Egg mark Testing Centres is nowhere prescribed under notification no. 93/2004-2009 Dated 01/04/2008. It was therefore strongly argued by her that DGFT Policy Circular No. 37/2004-2009 Dated 13/09/2008, mentioned in para-8.2 of OIA Dated 05/02/2014, has been wrongly relied upon by the first appellate authority. That even as per this circular also the cases where any variation is found the same were required to be intimated to DGFT for necessary action and remedial measures. That if a notification can be varied as per the policy circulars issued by DGFT then there was no necessity of amending the parameters of rice grain under notification no. 57/2009-2014 Dated 17/08/2010. Learned advocate relied upon the following Case Laws where same issue has been decided in favour of other rice exporters:-
(i) Shri Jagdamba Agrico Export Pvt. Ltd. Vs. Commissioner of Customs, Kandla [2014 (307) E.L.T. 764 (Tri.-Ahmd.)
(ii) Global Agro Impex Vs. Commissioner of Customs, Noida [2013 (290) D.L.T. 717 (Tri.-Del.)
(iii) HRMM Agro Overseas Pvt. Ltd. Vs. Commissioner of Customs,Kandla 2013 (292) E.L.T. 68 Tri.-Ahmd.)
3. Shri S. Shukla (Authorised Representative) appearing on behalf of the Revenue argued that similar case based on the test carried out by Eggmark Laboratory was upheld by this bench in the case of Parvaz Overseas Pvt. Ltd. Vs. Commissioner of Customs, Kandla [ 2013(294) E.L.T. 233 (Tri.-Ahmd)].
4. Heard both sides and perused the case records. The issue involved in the present proceedings is whether rice exported by the appellant is Basmati Rice or not as per Serial No. 45 AA, as amended, of notification no. 93/RE-2007/2004-2009 Dated 01/04/2008. The said Serial No. is reproduced below:-
Sl.No. Tariff Item HS Code Unit Item Description Export Policy Nature of Restriction 45AA 10063020 Kg.
Basmati Rice including Pusa Basmati 1121[Dehusked (Brown), semi milled, milled both in either parboiled or raw condition] Free
1. Grain of rice to be exported shall be more than 6.61mm o length and ratio of length to breadth of the grain shall be more than 3.5;
2.
3.
4. From the above provisions of the notification specifications of Rice Grain have been specified as per the restriction imposed in the last column of Serial No. 45AA. According to these restrictions grain of rice should be more than 6.61mm of length and ration of length to breadth of the grain shall be more than 3.5. There is no definition of Basmati Rice in the notification and there is also no stipulation that inspite of satisfying the size still the rice can be Non-Basmati Rice. Therefore all the Rice Categories being sold as Basmati Rice in the Commercial Parlance and having the dimension mentioned in the notification will not be covered as a restricted category of Basmati Rice. It is also observed that DGFT Policy Circular Dated 05/02/2014 only talks of drawal of samples of rice after allowing exports for testing by Eggmarks Testing Centre. Para-2.2 of this policy circular Dated 13/09/2008 also directs that where testing reports of samples are found to be at variance with the Export Declaration Customs will report such matters to the nearest joint DGFT for necessary action and remedial measures to be taken against the defaulting exports. Nowhere in this Policy Circular, it is mentioned that if grain size restrictions are satisfied then Eggmark authoritys opinion will be the Final Say on the classification of Basmati Rice. There is no such prescribed clause in the language of Notification No.93/RE-2007/2004-2009 Dated 01/04/2008 as amended. Further notification issued under Section 5, read that Section 3(2) of the foreign trade (Development and Regulation) Act 1992 cannot be interpreted/amended as per a Policy Circular issued by DGFT. It has been held in para-14 by Supreme Court in the case of Balwant Singh Vs. Jagdish Singh [(2010) 260 D.L.T. 16 (SC)] that Provisions of Statute had to be given full effect to Legislative intent to achieve intended objective. Similarly in the case of Global Exim Vs. CC.(Export), Navasheva [2015 (318) E.L.T. 312 (Tri.-Mumbai) in para-27.1 it was held that a notification should be read as per the language of the Notification and no words should be added or excluded from the notification.
5. Similar cases of other appellant has also been allowed by this bench in the case of Shri Jagdamba Agrico Exports Pvt. Ltd. Vs. Commissioner of Customs, Kandla(Supra) by making following observations:-
11. On perusal of the records, we find that it is undisputed that all the consignments which were carted in for export, had conformed to the specification of average length and the ratio of length to breadth as per notifications claimed by the appellant. We find that the said notifications had only the conditions which are reproduced here in a above and does not indicate any other condition to be satisfied for coming to a conclusion whether the consignment of rice is basmati or non-basmati ricfe. It is to be noted that the said notification even does not indicate any admixture to be considered for the purpose of getting benefit of the said notification. On the face of such clear notification the Revenue authorities have held that though the export consignments meet the specification of the length and the ratio of length to breadth has failed the admixture content, as the admixture content is more than limit. We do not find any such condition put in the notification, hence the Revenues argument on point of admixture is incorrect.
12. We find that the co-ordinate Bench of the Tribunal in an identical issue in the case of Global Agro Impex (Supra) has laid down the following ratio:-
7 The lD. AR for Revenue draws our attention to the fact that the circular of C.B.E. & C. prescribes that the goods are t be sent to AGMARK laboratories for testing to find out whether the goods are Basmati Rice. Therefore, he submits that it is clear that the AGMARK standards should be applied to decide whether the goods were Basmati Rice and he submits that two laboratories certified that the goods were in fact not Basmati Rice. However ld. AR is not able to point out any notification from DGFT which prescribes that the AGMARK standards have to be applied to decide whether the goods are Basmati Rice or otherwise. On the contrary the DGFT had prescribed Criteria of only length and the ratio of length to breadth to decide whether the goods are Basmati Rice and if these criteria only are adopted the goods qualified to be exported.
8 Considering the fact that the exporter has acted on the basis of notification issued by DGFT and the goods presented conformed to the prescribed standards, we are of the view that the goods cannot be considered as goods prohibited for export and therefore we are f the view that the confiscation of the goods under Section 113(d) of the Customs Act is not maintainable. Therefore, we set aside the impugned order confiscating the goods and imposing the penalty. It can be noticed from the above reproduced paragraphs, the argument of the ld. Departmental Representative was same as was before the Bench in that case. We are of the considered view that the above reproduced ratio covers the issue squarely in favour of the appellant.
13. Now, we consider the case laws cited by the Id. Departmental Representative in the case of Parvaz Overseas Pvt. Ltd. (supra), Phonix Traders (supra). On perusal of the said case laws, we find that in both the cases, the appellants therein had not claimed the benefit of DGFT notification as was claimed in these cases. Since there was no claim of benefit of said notifications before the Customs authority, the Customs vis-`-vis specification of Basmati rice, as per Agmark standards. The customs authority therein had not referred the samples to the Agmark authorities for testing the same with reference to any notification or conditions of notification. In the cases in hand, we find that the export consignments which are to be exported, were specifically claiming the benefit of Notification Nos. 55 & 57 and samples conformed to the restrictions laid down in the said notification. Due to this difference in the facts, we hold that the case laws cited by ld. Departmental Representative will not carry their case any further.
6. In view of the above observations and the relied upon Case Laws Confiscation/Redemption upheld by the first appellant authority is not justified and order Dated 05/02/2014 is required to be set aside. Appeal filed by the appellant is accordingly allowed, with consequential relief, if any.
(Operative portion of the order pronounced in Court) (H.K. Thakur) Member (Technical) Abhishek ??
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