Custom, Excise & Service Tax Tribunal
M/S. Girnar Food & Beverages Pvt. Ltd vs Commissioner Of Customs on 26 August, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: C/2281/2012 (Arising out of Order-in-Original No.2/2012 dated 24.5.2012 passed by Commissioner of Customs, Cochin.) For approval and signature: HON'BLE SHRI S.S. GARG, JUDICIAL MEMBER 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? Yes 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 M/s. Girnar Food & Beverages Pvt. Ltd. No.2, Biplabi Trailokya Maharaj Sarani (Brabourne Road) 7th Floor, Kolkata 700 001. WEST BENGAL Appellant(s) versus Commissioner of Customs Cochin Commissionerate, Cochin 682 009. Respondent(s)
Appearance:
Mr. T. Chandran Nair, Advocate For the Appellant Mr. Mohammed Yousuf, Addl. Commissioner (AR) For the Respondent Date of Hearing: 12/08/2016 Date of Decision: 26/08/2016 CORAM:
HON'BLE SHRI S.S. GARG, JUDICIAL MEMBER Final Order No. 20667/ 2016 Per : S.S. GARG The present appeal is directed against order dated 25.5.2012 passed by the Commissioner vide which the Commissioner of Customs imposed redemption fine ofRs.1 lakh under Section 125 of the Customs Act and imposed penalty of Rs.50,000/- under Section 112(a) of the Customs Act. Briefly the facts of the present case are that the appellants are engaged in blending of assorted tea and export thereof. Vide shipping Bill 378373 dated 23.5.2011, appellant exported Indian Tea in bulk from Kolkata to Ukraine and the assorted tea was exported under claim of export benefit under Duty Entitlement Pass Book Scheme (DEPB) but due to quality reasons the buyer in Ukraine rejected 417 pepper sacks x 55 kg net per sack and thereafter the said tea was re-imported due to rejection by the buyer and the appellant paid back the entire export benefits claimed by them. The appellant filed Bill of Entry dated 17.2.2012 for clearance of re-imported tea. The Port Health Officer and Legal Health Authority on 23.2.2012 noted on the bill of entry that inspected bags containing bulk tea samples taken to be sent to RA Lab and they also noted that the sample does not conform to Food Safety and Standards Authority of India (FSSAI). The Legal Health Authority vide letter dated 28.3.2012 informed ACC, Cochin that the sample was unsafe as defined under Section 3(1)(zz)(iii) of Food Safety and Standards Act, 2006. The appellant found re-imported goods were damaged due to water seepage and hence requested the customs authorities for granting permission to de-stuffing at Cargo Warehouse or any other place under customs supervision for checking, repacking the damaged packs and thereafter to re-export it to a buyer situated in Poland. In the aforesaid factual position, a show cause notice dated 14.5.2012 was issued proposing to confiscate the tea exported on the ground that the tea samples do not conform to the FSSAI Standards as per Port Health and Local Health authorities and consequently, the sample is not free from extraneous matter (iron fillings). Thereafter on adjudication, the learned Commissioner vide impugned Order-in-Original dated 24.5.2012 confiscated the 417 packs of Indian tea under Section 111(d) read with Section 25, Section 47(5) and 48 of food Safety and Standards Act, 2006 and Section 3(3) of Foreign Trade (Development and Regulation) Act, 1992 and imposed a fine of Rs.1 lakh under Section 125 of Customs Act and imposed a penalty of Rs.50,000/- under Section 112(a) of Customs Act on the ground that the appellants failed to get clearance from the Health Officers and the sample does not conform to FSSAI Standard and the same was unsafe as the sample is not free from extraneous matter. Aggrieved by the said order, the appellants have filed the present appeal.
2. Learned counsel for the appellant submitted that the impugned order of confiscation is not legally sustainable. He further submitted that the Circular dated 5.4.1984 issued by Health Ministry prescribed the upper limit of iron fillings of 250 PPM (Parts Per Million). This Circular has been withdrawn in 1994 by Prevention of Food Adulteration Authorities (PFA). He also submitted that Bureau of Indian Standards has fixed iron fillings of 250 mg/kg as upper limit and as per the units of measurements PPM is equal to mg/kg. He further submitted that in the present case, as per its report dated 9.5.2012 the iron fillings found in the re-imported tea is 16 mg/kg and hence, it is much below the permitted level of 250 PPM. He also submitted that the re-imported tea was not meant for human consumption in India but was meant for repacking the damaged pack and export to Poland where there was no such restriction of presence of iron fillings in tea as per their health and safety standards. Therefore the same cannot be said to be unsafe by the Indian Health Authorities. In support of his submissions, he relied upon the judgment in the case of Gujarat Co-op. Milk Marketing Federation reported in 2011 (265) E.L.T. 369 (T) and also R. L Exim vs. UOI : 2015 (330 ) E.L.T. 869 (Ker.). He also submitted that it is settled proposition of law that for imposing penalty, mens rea which is essential is totally absent in the present case.
3. On the other hand, the learned AR reiterated the findings of the Commissioner and justified the confiscation of the goods and imposition of redemption fine and penalty on the ground as stated in the impugned order.
4. After hearing learned counsels for both the parties and perusing the records, I find that the learned Commissioner in the impugned order has observed in para 21 which is reproduced herein below:
21. Further, I find that the Port Health Officers clearance has not been granted as the sample does not conform to FSSAI Std.. It is further informed that the consignment of food articles was analysed by the Director, CFTRI, Mysore and it was found that the sample is UNSAFE as defined under Section 3(1)(zz)(iii) of Food Safety and Standards Act, 2006 as it does not conform to the standards laid down for TEA under the provision of the Food Safety and Standards (Food Products Standards and Food additives) Regulation 2011 thereof, in that:
(a) Sample is not free from extraneous matter (iron fillings).
In terms of Paragraph 2.2 of the Foreign Trade Policy, all imported goods shall be subject to domestic laws, acts, rules, orders, regulations, technical specifications, environmental and safety norms as applicable to domestically produced goods. Further, as per the General Notes of the Foreign Trade Policy, 2009-14, the import of edible food products require mandatory clearance from the Port Health Officer and Local Health Authority. In this regard the Central Board of Excise and Customs has also issued Circular No(s). 103/2000, dated 15-12-2000; 58/2001, dated 25.10.01, and Circular No(s). 28/2006 dated 6-11-06 and 03/2011, dated 6-1-2011 dealing with provisions for import of food, articles, procedure for import clearances and applicability of Prevention of Food Adulteration Act, 1954 and now Food Safety and Standards Act, 2006, Rules & Regulations made thereunder.
22. Also as per the CHAPTER V, PROVISIONS RELATING TO IMPORT, under the Food Safety and Standards Act, 2006, Section 25 All imports of articles of food are to be subject to this Act. Further, such imports would also include the re-import and those food articles found unsafe cannot be allowed to be cleared from home consumption. The unsafe goods being not permitted to be released as per the Food Safety and Standards Act, 2006 are prohibited under the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1092), for not being as per the standards laid down by the Food Authority under the provisions of the Act and the Rules and Regulations made thereunder. As the mandatory clearance has not been granted by the Port Health Officer and Local Health Authority, the said goods are liable for confiscation under Section 111(d), read with Section 25 and 47(5), 48 of the Food Safety and Standards Act, 2006 and Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992 and the same cannot be released for home consumption as they are declared UNSAFE. Further, as the goods are liable for confiscation the importers are also liable for penalty under Section 112(a), ibid.
Therefore in view of the findings of the learned Commissioner stated above, I am of the opinion that the order of confiscation passed by the Commissioner is justified and does not requires any interference and therefore I uphold the confiscation and consequently, the imposition of redemption fine under Section 125 of the Customs Act. The learned Commissioner has also imposed a penalty of Rs.50,000/- on the importer under Section 112(a) of the Customs Act which in my opinion is not imposable because there was no mens rea which has been brought on record for imposition of penalty. In this case, consequently I drop the penalty and uphold the redemption fine. With this modification, the appeal is partly allowed.
(Order pronounced in Open Court on 26/08/2016.) (S.S.GARG) JUDICIAL MEMBER rv 2