Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs M/S Bansal Overseas, M/S Shri Shankar ... on 21 May, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT - I
Appeal No.C/12316,12599,13866,12505,12918/2013-DB
Arising out of: OIO No.KDL/COMMR/09/2013-14, dt.18.04.2013
OIO No.KDL/COMMR/13/2013-14, dt.29.04.2013
OIO No.KDL/COMMR/29/2013-14, dt.21.08.2013
OIO No.KDL/COMMR/12/2013-14, dt.29.04.2013
OIA No.391/2013/Cus/Commr(A)/KDL, dt.30.05.2013
Passed by: Commissioner of Customs, Kandla.
For approval and signature:
Mr.M.V. Ravindran, Honble Member (Judicial)
Mr. H.K. Thakur, Honble 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 No
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 Shree Jagdamba Agrico Export Pvt.Ltd.,
M/s Bansal Overseas, M/s Shri Shankar Gauri Agro,
M/s D.D. International, M/s Green Village Agros Pvt.Ltd.
Respondent: CC Kandla
Represented by: For Assessee: Shri P.P. Jadeja, Consultant For Revenue: Shri G.P. Thomas, Superintendent (AR) CORAM:
MR.M.V. RAVINDRAN, HONBLE MEMBER (JUDICIAL) MR. H.K. THAKUR, HONBLE MEMBER (TECHNICAL) Date of Hearing: 24.04.2014 Date of Decision: 21.05.2014 Order No. A/10977 10981/2014, dt. 21.05.2014 Per: M.V. Ravindran
1. All these appeals are disposed by a common order as the issue raised is same.
2. We notice that the appeal filed by M/s Green Village Agros Pvt.Ltd. is an appeal filed against Order-in-Appeal while other appeals are filed against Order-in-Original. The relevant facts that arise for consideration in all these appeals is, that all the appellants had filed shipping bills for export of basmati rice/pusa basmati rice. The said consignments were examined by the officers of dock examination and representative samples were drawn and forwarded to Chief Chemist, Regional Agmark Laboratory, Mumbai for analysis to ascertain whether the samples meet specifications of the basmati rice; as the appellant had sought the benefit of DGFT Notification No.55(RE-2008)/2004-2009, dt.05.11.2008 as amended by the Notification No.57/2009/14, dt.17.08.2010. The requirement for analysis arose as the said notification laid down the conditions as to the grain of rice sought to be exported. The samples were analysed and report of the Chief Chemist, Regional Agmark Laboratory, Mumbai indicated that the average length of the grain and the ratio of the length to breadth of the grains of sample sent was within limit as indicated in DGFT notification, but it failed in the admixture i.e. mixture of basmati rice and non-basmati rice. Based upon such report, the adjudicating authority took up the adjudication of all these shipping bills which were allowed export subject to analysis report and held that appellant had mis-declared the goods and hence the goods are liable for confiscation and appellants were also liable for penalty. Coming to such a conclusion, the adjudicating authority has confiscated the goods under the provisions of Section 113 (d) of Customs Act, 1962, imposed fine in lieu of the goods being not available for confiscation, imposed penalties on the exporter under the provisions of Section 114 (i) of Customs Act, 1962. In the case of M/s Green Village Agros Pvt.Ltd, the first appellate authority set aside the confiscation as has been ordered by the adjudicating authority, but imposed penalties under the provisions of Section 114 (i) of Customs Act, 1962.
3. Ld.Consultant appearing on behalf of the appellant would submit that the first appellate authority in the case of M/s Green Village Agros Pvt.Ltd has set aside the confiscation ordered by adjudicating authority. It is his submission that Revenue has not come in appeal before the Tribunal against such setting aside of the confiscation, hence the confiscation as ordered by the adjudicating authority in other cases also need to be set aside. It is his submission that the Revenue is contesting confiscation. In these cases having not filed an appeal in case of M/s Green Village Agros Pvt.Ltd, the Revenue cannot take a different stand in the other appeal. It is his submission that confiscation and the consequent redemption fine and penalty on the appellant is not justified or sustainable as the DGFT is the final regulatory authority so far as EXIM policy is concerned. It is his submission that the notifications which are relied upon by the Revenue authorities clearly state that basmati/pusa basmati rice would be, grain of the said rice should have specific length and length to breadth ratio should be of specific nature which according to him, the goods which were presented for export were conforming to the specification in the said notification. It is his submission that the adjudicating authority on the basis of admixture has held that the goods which were sought to be exported are not basmati rice and are to be treated as non-basmati rice, is incorrect as the said notification does not require the admixture of the samples to contain specific percentage of non-basmati rice. It is his submission that as per DGFT notification, the main requirement is of length to breadth ratio of the rice which has been satisfied by all the appellants as per the test report of Regional Agmark Laboratory. It is also his submission that the co-ordinate Bench of the Tribunal in the case of Global Agro Impex Vs CC Noida 2013 (290) ELT 717 (Tri-Del) and in the case of Prion Enterprises Vs CC 2012 (285) ELT 503 (Del.) has specifically held that if the sample satisfy the requirement of grain size as per the notification, only that criteria has to be met and Revenue cannot rely on Agmark standard to say that the consignment is not basmati rice and prohibited for export.
4. Ld.Departmental Representative, on the other hand, would submit that on first principle basis, the export of non-basmati rice is prohibited in order to cater to the local population of India. It is his submission that to restrict such export of non-basmati rice, the Central Government of India had put restriction and only permitted for export of basmati rice. It is his submission that to come to a conclusion whether the consignment of the rice which has been entered for export is basmati or non-basmati rice, the samples needs to be tested by experts and the expert in the case in hand are Agmark authorities. Giving a little background of the said Agmark authority, it is his submission that they are the final authorities on any specification/compliance of the agricultural products. He would submit that the samples which were sent to Agmark authority for testing, on testing it was reported that the samples though found to comply with the length of the grain and the ratio of the length to breadth of the grain, they failed in a specification of an admixture of non-basmati rice. He would submit that the appellants were, in fact, trying to export prohibited goods. It is his submission that the confiscation was correctly ordered as the appellant has tried to export the prohibited goods. He would submit that in a similar issue, this Bench of the Tribunal in the case of Parvaz Overseas Pvt.Ltd. Vs CC Kandla 2011-TIOL-1997-CESTAT-AHM had rejected the appeal filed holding that since the admixture of non-basmati rice being in the ratio of 26.5 : 73.5. He would also submit that an identical view was taken by this Bench in the case of Phonix Traders Vs CC Kandla 2011-TIOL-1551-CESTAT-AHM. He would also submit that due to such difficulties arising in export of the basmati rice, a meeting was convened by the Central Government of India, Ministry of Commerce & Industry, DGFT and in the Minutes of the Meeting, it was held that for the purpose of ascertaining whether the export is of basmati rice or otherwise, the Agmark norms will be accepted and the report given by the Agmark shall be accepted by DRI. He put on record the said Minutes. He would also submit that on a reference made to Basmati Export Development Foundation, the said foundation in a letter dt.01.04.2014 had stated that the consignments of rice having presence of more than 20% of non-basmati rice cannot be accepted as export of consignment of basmati rice and that the DGFT notification providing conditions for export of basmati rice from time to time cannot be applied even if the grain of rice meets certain parameters.
5. At the conclusion of hearing on 24.04.2014, we granted liberty to both sides to file written submissions. The said written submissions are taken on record and considered by us.
6. We heard both sides at length, perused the records and considered the written submissions.
7. The issue involved in this case is whether the appellant herein who had carted the consignment of rice and filed shipping bills as the same to be basmati rice and claimed the benefit of DGFT Notification No.55(RE-2008)/2004-2009, dt.05.11.2008 as amended by Notification No.57/2009/14, dt.17.08.2010 are basmati rice or otherwise.
8. We find that for proper appreciation of the issue, the nature of the restriction provided in the DGFT notification needs to be considered as to whether the consignments are basmati rice or otherwise. DGFT Notification No.55(RE-2008)/2004-2009, dt.05.11.2008 had the following restrictions:-
(i) Grain of rice to be exported shall be more than 7 mm of length and the ratio of length to breadth of the grain shall be more than 3.6;
9. The above said nature of restriction was amended by Notification No.57/2009/14, dt.17.08.2010, wherein the following condition was substituted:-
Grain of rice to be exported shall be more than 6.61 mm of length and the ratio of length to breadth of the grain shall be more than 3.5;
10. In all these appeals, the restriction as was put in Notification No.55(RE-2008)/2004-2009, dt.05.11.2008 and Notification No. 57/2009/14, dt.17.08.2010 is to be considered.
11. On perusal of the records; we find that it is undisputed that all the consignments which were carted in for export, had conformed to the specification of average length and the ratio of length to breadth as per notifications claimed by the appellant. We find that the said notifications had only the conditions which are reproduced hereinabove and does not indicate any other condition to be satisfied for coming to a conclusion whether the consignment of rice is basmati or non-basmati rice. It is to be noted that the said notification even does not indicate any admixture to be considered for the purpose of getting benefit of the said notification. On the face of such clear notification, the Revenue authorities have held that though the export consignments meet the specification of the length and the ratio of length to breadth, has failed the admixture content, as the admixture content is more than limit. We do not find any such condition put in the notification, hence the Revenues argument on point of admixture is incorrect.
12. We find that the co-ordinate Bench of the Tribunal in an identical issue in the case of Global Agro Impex (supra) has laid down the following ratio:-
"7. The ld. AR for Revenue draws our attention to the fact that the circular of C.B.E.&C. prescribes that the goods are to be sent to AGMARK laboratories for testing to find out whether the goods are Basmati Rice. Therefore, he submits that it is clear that the AGMARK standards should be applied to decide whether the goods were Basmati Rice and he submits that two laboratories certified that the goods were in fact not Basmati Rice. However ld. AR is not able to point out any notification from DGFT which prescribes that the AGMARK standards have to be applied to decide whether the goods are Basmati Rice or otherwise. On the contrary, the DGFT had prescribed criteria of only length and the ratio of length to breadth to decide whether the goods are Basmati Rice and if these criteria only are adopted the goods qualified to be exported.
8. Considering the fact that the exporter has acted on the basis of notification issued by DGFT and the goods presented conformed to the prescribed standards, we are of the view that these goods cannot be considered as goods prohibited for export and therefore we are of the view that the confiscation of the goods under Section 113(d) of the Customs Act is not maintainable. Therefore, we set aside the impugned order confiscating the goods and imposing the penalty. It can be noticed from the above reproduced paragraphs, the argument of the ld.Departmental Representative was same as was before the Bench in that case. We are of the considered view that the above reproduced ratio covers the issue squarely in favour of the appellant.
13. Now, we consider the case laws cited by the ld.Departmental Representative in the case of Parvaz Overseas Pvt.Ltd. (supra), Phonix Traders (supra). On perusal of the said case laws, we find that in both the cases, the appellants therein had not claimed the benefit of DGFT notification as was claimed in these cases. Since there was no claim of benefit of said notifications before the Customs authority, the Customs authority had drawn the samples and forwarded the same to Agmark authority who analyses the samples vis-`-vis specification of Basmati rice, as per Agmark standards. The Customs authority therein had not referred the samples to the Agmark authorities for testing the same with reference to any notification or conditions of notification. In the cases in hand, we find that the export consignments which are to be exported, were specifically claiming the benefit of Notifications No.55 & 57 and samples conformed to the restrictions laid down in the said notifications. Due to this difference in the facts, we hold that the case laws cited by ld.Departmental Representative will not carry their case any further.
14. Since we have disposed the appeals on merits and judicial pronouncements on the same issue, we are not recording any findings on various other points put forth by both sides, before us.
15. In view of the above, we set aside the impugned orders to the extent they are contested before us and allow the appeals.
(Pronounced in Court on 21.05.2014)
(H.K. Thakur) (M.V. Ravindran)
Member (Technical) Member (Judicial)
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