Custom, Excise & Service Tax Tribunal
M/S. Hak Agrofoods vs Commissioner Of Customs(Import). ... on 26 December, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. C/86115/13 [Arising out of Order-in- Appeal No. 707(Gr. I)/2012(JNCH)/IMP-591 dtd. 30/11/2012 passed by the Commissioner of Customs (Appeals), Mumbai II] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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M/s. Hak Agrofoods
:
Appellant
VS
Commissioner of Customs(Import). Nhava Sheva
:
Respondent
Appearance
Shri. C. K. Chaturvedi, Consultant for the Appellants
Shri. M.S. Reddy, Addl. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 26/12/2014
Date of decision 26/12/2014
ORDER NO.
Per : Ramesh Nair
The appeal is directed against Order-in- Appeal No. 707(Gr. I)/2012(JNCH)/IMP-591 dtd. 30/11/2012 passed by the Commissioner of Customs (Appeals), Mumbai II, wherein the Ld. Commissioner (Appeals) upheld the order-in-original No. 6846/2009(AM) dated 17/12/2009 and rejected the appeal filed by the appellant. The fact of the case is that M/s. Hak Agrofoods imported consignment of Fresh Frozen Green Peas vide bill of entry no. 698841 dated 29/9/2009. As per the Customs Authority the appellant required to obtain NOC from the Plant & Quarantine Authority in terms of Plant and Quarantine (Regulations) Order and PHO. The Plant and Quarantine department advised the Custom department vide letter dated 16/11/2009 to deport back to the supplier or destroy the goods as there is bio-security risk. In view of the observation of plant and quarantine authority, the goods were confiscated by the lower authority. The lower authority passed the order for confiscation of goods for violation of the Plant and Quarantine(Regulation) order 2003 read with Section 5 of the Foreign(Development and Regulation) Act 1992 under Section 111(d) of the Customs Act 1962. The adjudicating authority allowed the redemption of the goods for re-export only on payment of fine of Rs. 75,000/- and penalty of Rs. 40,000/- under Section 112(a) of Customs Act 1962. Aggrieved by the order-in-original, the appellant filed appeal before the Commissioner of Customs(Appeals). The Commissioner(Appeals) in his interim order in appeal no. 752(Gr-I)/2002 (JNCH)/IMP-357 dated 21/12/2009 allowed the plea of the appellant to get sample of goods tested by the recognized laboratory. Meanwhile, the Revenue challenged the said interim order before this Tribunal by filing the appeal, this Tribunal vide order no. A-442/11/CSTB/C-1 dated 30/9/2011 dismissed the appeal as not maintainable. In compliance to the interim order the appellant vide letter dated 21/12/2009, 22/12/2009 and 19/1/2009(through their advocate) requested to Chief Commissioner of Customs, JNCH, Commissioner(Appeals), JNCH and the Commissioner of Customs(Imports), JNCH for drawing of the representative sample and conducting the test. No response was received by the appellant. Thereafter, the Commissioner (Appeals) passed the final order wherein the order-in-original dated 17/12/2009 was upheld and the appeal of the appellant was rejected. Hence the appellant is before me.
2. Shri. C. K. Chaturvedi, Ld consultant for the appellant submits that the Commissioner (Appeals) has gravely erred in rejecting the appeal of the appellant despite holding stand that conclusion can not be drawn before carrying out the test of the product, as per the interim order. He submits that despite the repeated request to the Custom authority, the test was not allowed. In this situation, the Commissioner (Appeals) should not have rejected the appeal of the appellant only for the reason that test report did not produce by the appellant. He submits that product imported by the appellant is admittedly Fresh Frozen Green Peas it does not fall under the seed. For this product, in the EDI system, compulsory compliance requirement of production of import permit/Phytosanitary Certificate from Plant & Quarantine Authority / NOC from Local Food(Health) Authority/PHO. He submits that they have made strict compliance of the same producing Phytosanitary Certificate from Entry-Exit Inspection and Quarantine of the Peoples Republic of China i.e. Country of Origin. Thus compulsory compliance has been made by the appellant. He submits that in the order in original the confiscation was made only on the direction of the Plant & Quarantine Authority, who conveyed that import of said goods could not be allowed as there is bio-security threat to the country and advised to issue deportation or destruction order for such consignments. He submits that this was an arbitrary instruction by the Plant Quarantine Authority for the reason, firstly decision taken was not in respect of present appellant whereas in respect of some other importer. Hence it can not be generalized and can not be applied to the appellants case also. It is his submission that the final test was to be made by PRA Team which in this case was not done. It is his submission that in their case as per the test of said item by Municipal Corporation of Greater Mumbai, Public Health Department, it is clearly certified that the product does not contain fungal and insects. As per the Phytosanitary Certificate, it is certified that it is free from quarantine paste. From this it can be easily concluded that the product in question does not contain any pest and therefore pest risk analysis stand complied with. It is his submission that the Commissioner (Appeals) in the interim order realized that without carrying out the test under PRA, the charge made against appellant can not be established. Since, after all the efforts by the appellant, Custom Department itself is not extended cooperation and not allowed the test of the product, the appellant should not be made sufferer in absence of any contradictory report. It is his submission that advise of the Plant and Quarantine Authority is general in respect of the product and without any test therefore the same can not be sole reason for denying the clearance of the goods. He submits that the appellant has submitted an opinion from Shri G.B. Waland, Professor (Plant Pathology) and Principal of International Agree-Business Management Institute, Anand Agricultural University, Anand Gujarat, wherein the professor opined that after the carrying out the process of making Frozen Green Peas, the said product can only be used for home consumption purpose but not for sowing or crop product. For this reason also the advice of Plant & Quarantine Authority regarding deportation of the product is incorrect. He submits that the Fresh Frozen Green peas under import had been processed by blanching which is treatment with heat by subjecting it to temperatures above 95 degrees Centigrade with steam or boiling water. Blanching is a process which all vegetables intended for freezing are subjected to once blanched, the destructive enzymes are dead, and the vegetables are ready to be frozen for long term or to be cooked by conventional methods. Blanched vegetables keep their colours and flavours far more than unblanched vegetables, and they keep in the freezer for much longer. Blanching also helps to destroy microorganism on the surface of the vegetables, for this reason the product does not contain any pest or insect or fungal infection. He submits that even otherwise in the facts and the circumstances of the case the redemption fine and penalty is not warranted in the present case for the reason that the compulsory compliance made in respect of goods i.e. Phytosanitary Certificate had been produced by the appellant and as regard other observation of the Plant and Quarantine Authority is extraneous to compulsory compliance requirement therefore even this extraneous material is required redemption fine and penalty should not have been imposed.
2. Shri. M.S. Reddy, Addl. Commissioner(A.R.) appearing for the Revenue reiterates the findings of the impugned order.
3. I have carefully considered the submissions made by both the sides and perused the record.
4. The product in the present case is Fresh Frozen Green Peas. In connection with the clearance of the said goods EDI system has asked in a EDI system printout for compulsory compliance requirement i.e. Phytosanitary Certificate. The appellant has produced the said certificate of Country of Origin i.e. Republic of China. Accordingly, whatever compulsory compliance was required, the appellant has made good. The Plant and Quarantine Authority though made general observation in respect of product Frozen Green Peas that there is bio-security risk in import of the Frozen Green Peas and advise issued for deportation/destruction for such consignment, however authority has not given any reasoning for the same. Plant and Quarantine Authority after making this general observation also stated that correct position can be ascertained only after evaluation by the Paste Risk Analysis. Ld. Commissioner(Appeals) in his interim order which was upheld by this Tribunal held as under:
I have carefully considered the facts and circumstances of the case and the points raised by the importer. I find that importer has valid point as far as his request for test of the sample is concerned. There is nothing on the record and in Order-in-Original passed by the lower authority that the samples of goods imported were tested and it contains any pests etc. The Adjudicating authority has erred in holding on the basis of P&Q letter dated 16/11/2009 that the goods imported are having bio-risk without even inspecting or testing the goods.
To meet the ends of principles of natural justice the pea of the importer for testing the goods by recognized Laboratory/institution can not be denied to prove that the consignment is pest free.
Considering the fact that the goods are perishable in nature and lying in refrigerated container and incurring the demurrage, I stay the operation of order=-in-original passed by the lower authority. I allow the plea of importer to get the samples of the goods tested by the recognized lab. In the even of Test report indicating absence of pests etc. the assessing authority should consider the provisional clearance of goods subject to the final order.
The appeal will be decided finally after the test report is by the applicant.
From the above clear findings of the ld. Commissioner (Appeals), it could not have been drawn conclusion without test whether goods is free from pest. The appellant made repeated request to the Custom authority vide letters 21/12/2009, 22/12/2009 and 19/1/2009 for carrying out the test, Custom department has not given any heed to the request of the appellant. In such situation without test, the ld. Commissioner (Appeal) should not have drawn conclusion against the appellant. The ld. Commissioner has given findings which is extracted below:-
I have carefully considered the facts and circumstances of the case and the interim order No. 752(Gr.I)/2002(JNCH)/IMP-357 dated 21.12.2009 passed by then Commissioner of Customs(Appeals).
In terms of the interim order, it was ordered that importer to get the samples of the goods tested by the recognized laboratory. But as per information provided by the Deputy Commissioner of Customs, Imprt, Group I & IA, JNCH vide letter F. NO. S/26-Misc-282/2009Gr-I dated 26/4/2012 there is no Test report received from the importer in view of the said interim order. Further, the goods are not permitted to be imported by the Plant & Quarantine Authority as the goods imported involve biio-security risk. As the appellant is failed to produce required Test report after getting sufficient time. Accordingly I pass the following order:
Order I uphold the impugned order-in-original no. 6846/2009(AM) dated 17.12.2009 and reject the appeal no. F.NO. S/49-759/2009-MISC JNCH.
Since the test report is not available, the reference can be made to other documents such as Phytosanitary Certificate of the Country of Origin and report of Public Health Department of Municipal Corporation of Greater Mumbai from which it can be seen that subject goods are free from pests, insects and fungal infection. In the absence of Pest Risk Analysis Report, the aforesaid documents could have been accepted. I am of the view that the appellant has not contravened any of the provision of the Customs Act, 1962 and as per the nature of the product i.e. Frozen Green Peas, requirement of Phytosanitary Certificate was produced, which was the requirement under EDI system. Therefore the appellant can not be held guilty. In view of my above discussions, I am of the view that since the final test as regard Pest Risk Analysis was not carried out, the reliance can be placed on other documents such as Phytosanitary Certificate, report of Public Health Department of Municipal Corporation of Greater Mumbai and also certificate of Quarantine given by the supplier by which it can be ascertained that the product in question if free from Pest, insect and fungal infection. From the above facts and discussion thereon I find that the order of the Commissioner (Appeals) can not be sustained, hence the said order in appeal is set aside. The appeal of the appellant is allowed.
(Dictated in court) Ramesh Nair Member (Judicial) sk 10