Custom, Excise & Service Tax Tribunal
Rajesh Maikhuri vs New Delhi Icd Tkd Export on 15 November, 2019
CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Customs Appeal No. 50523 of 2018
[Arising out of the Order-in-Original No. 18/2017 dated 29/09/2017 passed by
The Commissioner of Customs (Exports), ICD, Tughlakabad, New Delhi.]
Shri Rajesh Maikhuri, Director of Appellant
M/s R.U. Imports-Exports Pvt. Ltd.
L-10, 2nd Floor, Mahipalpur Extension,
New Delhi - 110 037.
VERSUS
The Commissioner of Customs (Exports) Respondent
Inland Container Depot, Tughlakabad, New Delhi.
WITH Customs Appeal No. 51595 of 2018 [Arising out of the Order-in-Original No. 18/2017 dated 29/09/2017 passed by The Commissioner of Customs (Exports), ICD, Tughlakabad, New Delhi.] Shri Anand Kadiyan, Proprietor of Appellant M/s Ethan Sales and Services Village Badu Sarai, P.O. Chhawala, New Delhi - 110 071.
VERSUS The Commissioner of Customs (Exports) Respondent Inland Container Depot, Tughlakabad, New Delhi.
Appearance Shri B.L. Garg, Advocate - for the appellants.
Shri Rakesh Kumar, Authorized Representative (DR) - for the Respondent.
CORAM: HON'BLE SHRI C.L. MAHAR, MEMBER (TECHNICAL) HON'BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL) FINAL ORDER NO. 51490/2019 DATE OF HEARING : 21/05/2019.
DATE OF DECISION:15/11/2019.
2 CUS/50523 & 51595 of 2018 C.L. MAHAR :-
The brief facts of the matter are that M/S Ethan Sales & Services, the importer had filed a Bill of Entry No. 2924132 dated 06/08/2013 for certain Dietary supplements classifying the same under CTH 21061000 through CHA M/S R U Imports-Exports Pvt. Ltd. The Consignment was examined by the Inspector on first check basis on the directions of the Superintendent "Please open and examine 10% of the total no. of packages subject to a minimum of 2 packages and check declaration. Please verify that the goods are as per invoice, packing list, B/E and the B/L. Please ensure compliance to CCR/Target Intervention instructions before o/c. Please check NOC from PHO/FSSAI or check previous 5 NOC as per DGFT Circular No. 25/2004 and 37/2004 for PHO waiver." The consignment was examined and cleared with examination report bearing "O/E 10% of the Goods in presence of CHA representative and found to contain Dietary Supplements as per Inv/PL/BL.. Five previous B/E att. for waiver of FSSAI.". The consignment was given out of charge on 14/08/2013 after enhancing the declared value. However, on the request of DRI, Lucknow, the said consignment was put on hold on 14/08/2013 by Deputy Commissioner of Customs, ICD, Tughlakabad for 100% examination in the presence of DRI. The said consignment was examined by DRI on 21/08/2013 under a panchnama dated 21/08/2013 and was detained vide DRI F. No DRI/NCO/EXAM/52/2013 dated 21/08/2013. During examination it was observed the MRP/RSP and other details regarding the importer, stipulated under Rule 6 and Rule 10 of the Legal Metrology (Packaged Commodity) Rules, 2011 have not been declared on the packages of the said goods. The representative samples were also drawn for testing. The test reports received from FSSAI Laboratory, Ghaziabad for 15 items stated " The sample is thus unsafe under Section 3(1)(zz)(v) and mis branded under Section 3(1)(zf) of the FSS Act, 2006" and for other two
3 CUS/50523 & 51595 of 2018 items stated " The sample is mis branded under Section 3(1)(zf) of FSS Act, 2006."
2. Statements of several persons including appellants were recorded and the appellant was not aware of the actual value of the good as the same were negotiated by their Consultant. The purchase and sale of the goods were completely arranged by their Consultant and the profit was to be shared between the importer and his Consultant. For payment of duty the appellant No. 2 took a loan of Rs. 10 Lakhs from M/S Ranbir Finance Company and rest of the four lakhs were arranged by the CHA. He was not aware of the origin of the goods as no certificate of origin was available. That neither his firm was registered with FSSAI nor has obtained NOC prior to customs clearance of the goods. The appellant no. 2 voluntarily deposited Rs. 10 Lakh on account of anticipated adjudication levies. The appellant No. 1 is the Director of CHA firm who has undertaken the clearance work of the consignment that he was aware of requirement of NOC from FSSAI but he did not obtain and instead submitted five previous bills of entry in respect of same goods and same supplier for waiver; he has wrongly mentioned the country of origin as UAE instead of USA in B/E and also filled blank GATT declaration forms having signature of the party on forms only; he did not comply with the requirements of Legal Metrology (Packed Commodity) Rules, 2011, that he knows to Shri Sunny Gujral, the supplier of the consignment and he introduced appellant No. 2 to him for supply of dietary supplements.
3. Show Cause Notice dated 02/02/2014 was issued by Additional Director Directorate of Revenue Intelligence, Lucknow Zonal Unit, Lucknow to the four Noticees for violation of the Section 25 of the FSS Act, 2006, procedure prescribed by CBEC vide circular No. 3/2011 and Rules 6 and Rule 10 of the Legal Metrology (Packaged Commodity) Rules, 2011 which prescribed that every package intended for retail sale, MRP/RSP, name and address etc. of the importer have to be declared. Inspector and 4 CUS/50523 & 51595 of 2018 Superintendent of Customs who were involved in examination of the goods were also issued show cause notice for their failure to draw samples in terms of CBEC Circular No. 03/2011 dated 06/01/2011 and to ensure compliance with the Legal Metrology (Packaged Commodity) Rules, 2011. Penalties were proposed on all the Noticees under section 112(a) of the Customs Act, 1962 for improper importation of the impugned consignment which appeared liable to confiscation under Section 111(d) of the Customs Act being prohibited for import not complying with the Section 25 of FSS Act, 2006 and also follow the prescribed procedure under Circular 03/2011 which read as Section 25 of FSS Act, 2006 "25. All imports of articles of food to be subject to this Act.
(1) No person shall import into India --
(i) any unsafe or misbranded or sub-standard food or food containing extraneous matter;
(ii) any article of food for the import of which a licence is required under any Act or rules or regulations, except in accordance with the conditions of the licence; and
(iii) any article of food in contravention of any other provision of this Act or of any rule or regulation made there under or any other Act."
Para 7 of CBEC Circular No. 03/2011-Cus
a) consignments of high risk food items, as listed in DGFT Policy Circular No. 39(RF-2003)/2002-2007 dated 14/06/2004 (as may be modified from time to time), shall be referred to Authorised Representative of FSSAI or PHOs,- as the case may be, for testing and clearance shall be allowed only after receipt of the test report as per the instructions contained in the Customs Circular No. 58/2001-Cus, dated 25/10/2001.
b) All consignments of perishable items like fruits, vegetables, meat, fish, cheese etc., will continue to be handled in terms of the guidelines contained in Para 2.3 of the Board's Circular No.58/2001-Customs dated 25/10/2001.
5 CUS/50523 & 51595 of 2018
c) In respect of food items not covered under (a) and (b) above, the following procedure would be adopted in addition to the general checks prescribed under Para 2.1 of the Circular No. 58/2001-Cus, dated 25/102001:
i. Samples would be drawn from the first five consecutive consignments of each food item, imported by a particular importer and referred to Authorised Representative of FSSAI or PHOs, as the case may be, for testing to ascertain the quality and health safety standards of the consignments.
ii. In the event of the samples conforming to the prescribed standards, the Customs would switch to a system of checking 5% -20% of the consignments of these food items on a random basis, for checking conformity to the prescribed standards. The selection of food items for random checking and testing would be done by the Customs taking into consideration factors like the nature of the food products, its source of origin as well as track record of the importers as well as information received from FSSAI from time to time.
iii. In case, a sample drawn fro m a food item in a par ticular consignment ` fails to meet the prescribed standards, the Customs would place the import of the said consignment on alert, discontinue random checking for import of such food items and revert to the procedure of compulsory checking. The system of random sampling for import of such food items would be restored only if the test results of the samples drawn from the 5 consecutive consignments re-establish that the food items are in conformity with the prescribed standards. "
4. Vide impugned order, the learned Commissioner found that the conduct of the Inspector and Superintendent could not be considered sufficient to hold that they had abetted in the offence even though there may be some omissions by these officers and accordingly no penalty was imposed upon them. He imposed penalties equal to value of the seized goods Rs. 2,17,97,466/- on both the appellants. However, he ordered that "no penalty is imposed on Noticee No. 3, as the penalty has been imposed on 6 CUS/50523 & 51595 of 2018 Director of the CHA firm". Against the impugned order present appeals No. C/51595/2018 and C/50523/2018 have been filed by the appellant no. 1 & 2 respectively, Appeal No. C/50196/2018 has been filed by the Revenue for not imposing any penalty against the CHA firm which has been dealt separately.
5. After hearing both the sides, we find that in the appeals filed by both the appellants, no evidence has been adduced which contradicts the facts that the import consignment were of the goods which did not confirm to the standards laid down under Food Safety & Standards Act, 2006. The test report of the samples drawn from the import consignment has categorically mentioned that the samples are unsafe and mis-branded as per the provisions of Section 3 (1) of the FSS Act, 2006. The Commissioner in impugned order-in-original has categorically brought out the role of both the appellants very categorically in his findings given on para 28.1 for Shri Anand Kadiyan, the Proprietor of the importing firm and para 28.2 for Shri Rajesh Maikhuri, Director of the CHA firm. Both the appellants have not adduced any evidences to disapprove the findings of the Adjudicating Authority. It has been submitted by Shri Anand Kadiyan that the penalty under Section 112A of the Customs Act, 1962 should have been equivalent to the declared value of the import consignment rather than the market value of the import consignment. We find that the argument made by the appellant is not legally sustainable as the Customs Act under Section 112A provides that penalty under the Section should not exceed the value of the goods. Since, the import consignment falls under the category of the prohibited goods and it has also been found that the value declared by the importer is not correct. The seizure value of these goods have been taken as market value since as the goods are of prohibited nature, they are certainly to fetch high margin of profit in the domestic market. The Adjudicating Authority has accordingly taken the market value of such goods as prevailing in the local market for imposition of penalty, we are 7 CUS/50523 & 51595 of 2018 of the opinion that the amount of the penalty imposed on both the appellants is in accordance with the provisions of Section 112A (i) of Customs Act, 1962 and, therefore, we find no reason to interfere with the amount of penalty imposed on both the appellants. We also take note of the fact that the dietary supplements imported by the importer and assisted by Director of the clearing firm namely Shri Rajesh Maikhuri in attempted clearance of the same has not confirmed to the Food Safety & Standards Act and by their this Act, they have tried to put the health of several customers of the domestic market under danger only with a motive to earn profit. We are of the firm opinion that deterrent penalty need to be imposed on such importers and their accomplices and thus we do not find any reason to interfere with the amount of penalty imposed by the Adjudicating Authority in the impugned order-in-original.
6. In view of above, both the appeals are hereby dismissed.
(Order pronounced in open court on 15/11/2019.) (C.L. Mahar) Member (Technical) (Rachna Gupta) Member (Judicial) PK