Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs M/S Gujarat Co-Op. Milk Marketing ... on 20 August, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT:
II
Appeal No.C/213/2010 (Application No.C/EH/1169/2010)
Arising out of: OIO No.03/Commr./ICD-Sabarmati/2010, dt.13.4.10.
Passed by: Commissioner of Customs, Ahmedabad
For approval and signature:
Honble Mrs. Archana Wadhwa, Member (Judicial)
Honble Mr. B.S.V. Murthy, Member (Technical)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the Yes
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant:
M/s Gujarat Co-op. Milk Marketing Federation Lt d.
Respondent:
CC Ahmedabad Represented by:
Shri P.M. Dave, Adv. for the Assessee; Shri Rajendra Nagar, SDR for the Revenue.
CORAM:
MRS. ARCHANA WADHWA, MEMBER (JUDICIAL) MR. B.S.V. MURTHY, MEMBER (TECHNICAL) Date of Hearing:20.08.10 Date of Decision:
ORDER No. /WZB/AHD/2010 Per: Mrs. Archana Wadhwa:
The present appeal stand filed by the appellant against the impugned order of the Commissioner, vide which he has confiscated the re-imported Amul Full cream Milk Powder absolutely and has also imposed penalty of Rs.5,000/- in terms of Section 112 of Customs Act, 1962.
2. As per facts on record, the appellant is engaged in manufacture of various milk products. During the month of Sept. 2008, they exported Amul Full cream Milk Powder to the Gulf Country, to fulfill their export obligations under the Export-Import Promotion Capital Goods scheme. However, due to recession in the Gulf market, the said Amul Full cream Milk Powder was re-imported by them. Accordingly, they filed two Bills of Entry on 24.2.10 for clearance of the said goods, by treating the same as re-imported goods in terms of provisions of Notification No.94/1996-Cus, dt.16.12.96. The said notification permits re-import of the goods exported under Export Promotion Capital goods, subject to the condition that re-importation takes place within a period of 1 year from the date of export or within such extended period not exceeding 1 year as may be allowed by Commissioner on sufficient ground being shown. Though the Commissioner, in his impugned order has observed that the appellant has not filed any application for extension of period, but he has primarily rejected the re-import and clearances on the ground that provisions of Prevention of Food Adulteration Act, 1954 do not stand substantiated by the appellant.
3. On an 100% examination of the re-imported goods by the Customs, it was found that the expiry date was printed on the same as February 2010 or 28.2.10. Accordingly, the Revenue entertained a view that inasmuch as the goods are not fit for consumption as the expiry date was over, they should not be cleared. Accordingly, the verbal query was made to the importer as regards expiry date printed on the tin. The appellant vide their letter dt.9.3.10 clarified that the product is sold with shelf life in different market s as per law set by local Government and as such expiry periods varies from country to country; in any case Full cream Milk Powder is not going to be sold by them in India; that they are not manufacturing Full cream Milk Powder for sale in India and the declarations on packages are also not as per the domestic standard requirement. Since the product is not marketable in Indian market, it will have to be cut open; they are providing food products with high quality and testing each of their products in their own laboratory which is accredited by National Accreditation Board for testing and Technology Laboratory, Department of Science & Technology, Govt. of India.
4. The Revenue drew a sample from the product and sent the same for testing to the Public Analyst, Food & Drugs Laboratory, Vadodara. The said authority vide his letter dt.23.3.10 opined as under:
The sample Amul Full Cream Milk Powder is mis-branded as it do not comply with labeling provisions of Rule 32(e), (f) and (i) of Prevention of Food Adulteration Rules, 1955 and Prevention of Food Adulteration Act, 1954 in respect of Declaration of Lot/Code/Batch Identification, Month and Year of manufacture of Packing and Best before use respectively.
5. As the appellants waived the show cause notice, the Commissioner passed the impugned order. He has referred to Para 8 of Chapter 1A (General Notes regarding Import policy) of ITC(HS) classification of Export and Import Items 2009-14, which provides that import of edible/food products, domestic sale and manufacture of which are governed by Prevention of Food Adulteration Act, 1954, shall be subject to all the conditions laid down in the said Act. Import of all these products will also have to comply with the quality and packaging requirement. He has also referred to Para 13 of said Policy, which is to the effect that all the food products the domestic sale and manufacture of which is governed by Prevention of Food Adulteration Act, 1954, must have a valid shelf life of not less than 60% of its original shelf life. The Commissioner then referred to provisions of Section 5 of Prevention of Food Adulteration Act, 1954 and Rule 32 of Prevention of Food Adulteration Rules, 1955 and Section 25 of Food Safety & Standards Act, 2006. Based upon the same, he concluded as under:
5.4 As seen there-from as per the import policy, import of edible/food products are subject to all the conditions laid down in Prevention of Food Adulteration Act, 1954 and import of all these products will have to comply with the quality and packaging requirement as laid down in the subject Act. It further stipulates that compliance of these conditions are to be ensured before allowing clearance of any consignment which is governed by Prevention of Food Adulteration Act, 1954. It further provides that shelf life of such products should not be less than 60% of its original shelf life. As already mentioned herein before, the shelf life as given on the subject product imported, has already expired in Feb.2010. Furthermore, as per Section 5 of the Prevention of Food Adulteration Act, 1954, no mis-branded food is allowed to be imported into India. As the subject goods do not comply with labeling provisions of Rule 32(e), (f) and (i) of the Prevention of Food Adulteration Rules, 1955 in respect of Declaration of Lot/Code/Batch Identification, Month and Year of manufacture of Packing and Best before use respectively, it is mis-branded as per the Prevention of Food Adulteration Act, 1954 and therefore its import into India is prohibited. The subject imported goods therefore will also fall under the category of prohibited goods as envisaged under Section 2(33) of the Customs Act, 1962. Importers representation for clearance of the imported goods are not supported by any permission granted by the authorities implementing the provisions of the Prevention of Food Adulteration Act, 1954 and in absence of the same, I am afraid that I have no legal backing for accepting such reasons of the importer.
6. As is seen from the above, the denial of export is basically on the ground that the product in question has already expired according to the expiry date printed on the same. Further, the product in question stand held to be mis-branded inasmuch as the same is not complying with various provisions of Prevention of Food Adulteration Act, 1954. The learned advocate appearing for the appellant, submits that inasmuch as the goods were manufactured for export purposes and as such, were printed in accordance with their requirements. The non-printing of the same in accordance with the provisions of Prevention of Food Adulteration Rules, cannot be made the basis as the same is virtually impossible. As regards expiry of shelf life of the milk powder, he submitted that the Full Cream Milk Powder has no market in India and they are not going to sell the same in India. On being questioned as to what is the use of said expired milk powder, the learned advocate submitted that they would be able to retrieve the milk from the same, after taking necessary permission from the Food & Drugs Authority in compliance with the various Acts. However, he fairly agreed that they have not yet approached them and sought their opinion and permission for the said purpose. He submits that certain directions as regards the release of the product and their further processing in the presence and supervision of the authorities working under the specific provisions of Food & Drugs Act & Rules, can be made.
7. We, however, find that the appellant have made no such efforts till date to seek the permission of the authorities under the Prevention of Adulteration Food Act, 1954. We are not technically qualified to opine as to whether the milk powder which is not fit for human consumption, can be re-treated from the said Full Cream Milk Powder or not. The same falls under the domain of authorities working under Prevention of Food Adulteration Rules, 1996 and the Act. As rightly contended by the appellant, the country is already facing a severe shortage of milk and absolute confiscation of the goods in question resulting in destruction of the same over a technical issue which is impossible of adherence, would amount to catastrophic waste of resources available to the country. We note that the Government has allowed duty free import of 30,000/- MTs of milk powder, to meet the local milk demand as against 60% of the normal rate of Basic Customs Duty, as contended by the appellant.
8. We also find merits in the appellants contention that the milk having been exported earlier, have complied with the legal requirements of the imported country. On the re-import of the same, the conditions of Prevention of Food Adulteration Act, 1954 as regards batch number, lot number etc, cannot be fulfilled and the goods cannot be held to be mis-branded. Similarly, the condition of shelf life being not less than 60% of its original self life can be interpreted as being applicable in respect of food products imported for sale in the domestic market. In the present case, admittedly milk powder is not going to be sold by the appellant in the Indian market and admittedly, the shelf life printed on the same has expired. If the appellant would not have come forward with the alternative plea of possibility of retrieving milk out of the powder in question, the decision taken by the Commissioner as regards absolute confiscation of the same on the ground of expiry of shelf life was liable to be upheld. However, the valuable goods worth more than Rs.1 crore cannot be allowed to he drained because of technical objections of the Revenue that too about the conditions which are practically difficult to be followed.
9. In view of the above discussions, we feel that as the appellant intends to retrieve milk from the re-imported powder, after taking requisite permission of Food & Drugs authority, we consider it fit to set aside the impugned order and remand the matter to the Commissioner for fresh decision, after the appellants have placed the experts opinion of appropriate authorities under the Food Prevention Act, before him. The Commissioner may consider the clearance of the goods in question after considering the expert opinion subject to fulfillment of the conditions, which he may deem fit to impose in the facts and circumstances of the case. He may impose the condition of supervision by the appropriate authority as regards conversion of milk powder in milk, in order to ensure that milk powder in question does not come into the market.
10. As a lot of period has already passed, we would like the Commissioner to expedite the matter as early as possible after the appellant have placed on record the permission and opinion from the authorities under Prevention of Food Adulteration Act.
11. Appeal is allowed by way of remand.
(Pronounced in Court on _________________________) (B.S.V. Murthy) (Archana Wadhwa) Member (Technical) Member (Judicial) cbb ??
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