Custom, Excise & Service Tax Tribunal
M/S Shri Jalaram Rice Industries vs Cc (Export) Nhavasheva on 31 July, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: C/530/2010
[Arising out of Order-in-Original No: 09/2010-11 dated 18th May
2010 passed by the Commissioner of Customs (Export), Nhava
Sheva.]
Shri Jalaram Rice Industries ... Appellant
versus
Commissioner of Customs (Export)
Nhava Sheva ...Respondent
Appearance:
Shri N D George, Advocate for appellant Ms Trupti Chauhan, Assistant Commissioner (AR) for respondent CORAM:
Hon'ble Shri C J Mathew, Member (Technical) Hon'ble Shri Ajay Sharma, Member (Judicial) Date of hearing: 09/07/2018 Date of decision: 31/07/2018 ORDER NO: A/87009 / 2018 Per: C J Mathew M/s Shri Jalaram Rice Industries is in appeal against order-in- original no. 09/2010-11 dated 18th May 2010 of Commissioner of Customs (Export), JNCH, Nhava Sheva which has confiscated 499350 C/530/2010 2 kgs of non-basmati rice, valued at ` 94,88,300/-, under section 113(d) and 113(i) of Customs Act, 1962 for having contravened notification no. 38/2007 dated 15th October 2007 of the Directorate General of Foreign Trade prohibiting export of such goods but allowed to be redeemed on payment of fine of ` 18,97,660/- besides imposing penalty of ` 9,48,830/- under section 114 of Customs Act, 1962.
2. It is the claim of the Learned Counsel that consignments covered by four shipping bills dated 27th February 2009 and 25th March 2009 were seized on ascertainment of the same, declared as basmati rice, to be non-basmati rice on the basis of test result dated 25th August 2009 on samples drawn on 18th August 2009. Learned Counsel further contends that the prescription by Directorate General of Foreign Trade that, in the event of dispute, the testing was to be carried out by AGMARK had not been complied with. He further placed reliance on the decision of the Tribunal in Chawla Trading Co. v. Commissioner of Customs (Export), Nhava Sheva [2015 (330) ELT 470 (Tri.-Mumbai)].
3. Learned Authorised Representative, on the other hand, places reliance on the admission by the Director of the appellant-exporter that the non-basmati rice had been erroneously stuffed into the container and that he was prepared to pay the fine and penalty as deemed fit. It is also pointed out that the statement of the officers who C/530/2010 3 were directed to supervise the stuffing of the cargo at the premises of the appellant had elaborated on the circumstances in which it had been impossible for them to be present during the entire process. Further, relying upon the statement of the supplier of the rice, Learned Authorised Representative contends that these suffice to demonstrate that the appellant had procured both basmati and non-basmati rice for export.
4. It is seen from the circular of the Director General of the Foreign Trade that even if there was some dispute on the nature of the goods being exported, the consignment was to be allowed for export after drawal of samples. On going through the records of the case, however, we find that, upon detection of the non-basmati rice, the goods were permitted to be taken back without completing the export.
5. For the purpose of record, we reproduce the following contents of circular No. 32/2008 dated 30th September 2008:
'Attention is invited to Notification No. 39 dated 16.9.2008 vide which export of Basmati rice having grain length of more than 7 mm, and grain length to breath ratio of more than 3.6 has been allowed. Attention is also invited to Notification No. 39 dated 16.9.2008 vide which export of PUSA 1121 Non-basmati rice having grain length of more 7 mm, and grain length to breath ratio of more than 4.0 has been allowed.
2.1 Customs shall allow export consignments of C/530/2010 4 Basmati rice and PUSA 1121 Non- basmati rice based on the parameters of grain length, and grain length to breath ratio.
Customs may draw random samples for testing, to ascertain variety identification and send these samples for analysis to AGMARK testing centres. However, Customs will not hold back export consignments / containers for want of test reports, and export will be allowed after drawing samples, wherever required.
2.2 In cases, where test reports of samples are found at variance with the export declaration, Customs will report the matter to the nearest Zonal Joint DGFT (with copy to DGFT at HQs New Delhi) for necessary action and remedial measures to be taken regarding the defaulting exporter.
6. It would appear that the export consignment had to be permitted or subject to testing upon the existence of certain parameters. It would appear from the record that no such preliminaries had been ascertained. Furthermore, it also appears from the statement of the Director of the appellant-exporter that export of non-basmati rice had occurred by oversight following which the export consignment itself had been withdrawn. The test result relied upon by the adjudicating authority had not ascertained whether the goods were those that were other than 'PUSA 1121 non-basmati' which were permissible as export. In the above circumstances, we find that though the confiscation may have been justified from the admission made by the appellant at the time of attempting to export, the imposition of redemption fine and penalty does appear to be excessive.
C/530/2010 5 Accordingly, we reduce the redemption fine to ` 1 lakh and reduce the penalty to ` 50,000/-.
7. Appeal is accordingly disposed off.
(Pronounced in Court on 31/07/2018)
(Ajay Sharma) (C J Mathew)
Member (Judicial) Member (Technical)
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