M/s. M.K.A. Chinnasamy Nadar & Sons vs Commissioner Of Customs

The present appeal has been filed by the assessee against Order-in-Appeal No. 87/2019-TTN (CUS) dated 05.11.2019 passed by the Commissioner of Customs & Central Excise (Appeals), Tiruchirappalli.

Brief facts of the case are summarized as under:

(i) The appellant had filed Bill-of-Entry No. 2226534 dated 27.02.2019 under LDC Scheme for the import of 1,20,000 kgs of "Chick Peas (Tanzania Yellow Gram (Desi Chick Peas))" imported from Tanzania classifying the same under Customs Tariff Heading 07132020 from the supplier M/s. AGRI Commodities & Finance, FZE, P.O. Box 330578, Rak Ftz, Ras Al Khaimah, UAE.

(ii) The Single Window Interface had routed the above said Bill-of-Entry to PQ/FSSAI clearance as the imported goods is an edible product.

(iii) The Food Safety and Standards Authority of India ('FSSAI' for short) rejected the above import cargo under Section 25 (1) (i) of the Food Safety and Standards Act, 2006 since the sample did not conform to the standards laid down for pulses under Regulation 2.4.6.22 of Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 vide its reports NCC No. NNC201900013706 dated 07.03.2019 and NCC No. RNCC201900000071 dated 23.04.2019.

(iv) The Lower Adjudicating Authority found that the import of 1,20,000 kgs of Chick Peas (Tanzania Yellow Gram (Desi Chick Peas)) imported from Tanzania, had been rejected by the FSSAI as the mineral matter content exceeded the maximum standard limit and therefore held that the imported 1,20,000 kgs of Chick Peas (Tanzania Yellow Gram (Desi Chick Peas)) valued at Rs. 57,49,225/- is liable for confiscation and thereby ordered for confiscation of the above said imported cargo under Section 111 (d) of the Customs Act, 1962, gave option to pay fine of Rs. 5,00,000/- under Section 125 of the Customs Act, 1962 and imposed a penalty of Rs. 3,00,000/- under Section 112 (a) of the Customs Act, 1962.

(v) The assessee preferred appeal before the Commissioner of Customs and Central Excise (Appeals), Tiruchirappalli, who vide order impugned herein reduced the redemption fine to Rs. 3,00,000/- under Section 125 of the Customs Act, 1962 and the penalty to Rs. 2,00,000/- under Section 112 (a) of the Customs Act, 1962.

Aggrieved by the same, the assessee has filed the present appeal before this forum.

When the matter was taken up for hearing, Shri A.K. Jayaraj, Learned Advocate, appeared for the assessee-appellant and Shri M. Jagan Babu, Learned Authorized Representative, appeared for the Revenue respondent.

I have heard the rival contentions, perused the documents placed on record and also the various case laws relied upon during the course of hearing.

6.1 I find that an identical issue came up for consideration before the Tribunal in the case of M/s. O.M.S. Sivajothi Mills v. The Commissioner of Customs, Tuticorin in Customs Appeal No. 40784 of 2019 [Final Order No. 41028 of 2019 dated 22.08.2019 - CESTAT, Chennai]. Facts being identical, I am of the view that the above case would squarely apply to the case on hand. Relevant observations are as under:

"7.2.1 Clearly, as the heading itself points out, the fine i.e., redemption fine, is an option in lieu of confiscation and hence, both cannot run simultaneously, which means redemption fine is leviable only as an alternative to confiscation. The appellant here in this case has not questioned the confiscation and hence, there is no option available to it. Consequently, there is no question of exercising any option in lieu of confiscation. When the order as to the confiscation remains unchallenged, the importer accepts the order of confiscation and even the exporter offers willingness to accept back (re-export) the consignment, there cannot be any question of redemption fine. Therefore, the redemption fine imposed and upheld by the First Appellate Authority cannot sustain and is accordingly set aside.

7.2.2 This view is supported by various judicial precedents relied on by the Ld. Advocate for the assessee.

7.3 In the order of this Bench in the case of M/s. Chennai Marine Trading Co. P. Ltd. (supra) relied upon by the Ld. AR, the very imported consignment itself was a restricted item for import. In the peculiar facts and circumstances of the case, the binding decision of the Hon'ble jurisdictional High Court and the Hon'ble Supreme Court (supra) prevails and therefore, the appeal as regards this issue is allowed."

6.2 In view of the foregoing, the redemption fine charged under Section 125 of the Customs Act, 1962 is unsustainable and the same is required to be deleted, which I hereby do.

7.1 Coming to the other issue of levy of penalty under Section 112 (a) of the Customs Act, 1962, I find that a reading of the said Section makes it clear that the penalty under Section 112 (a) would be imposed in the case of improper importation of goods which has rendered the imported goods liable to confiscation under Section 111 and for this, I am of the opinion that abetment is not a criterion. Apparently, Clause (a) of Section 112 has two limbs - the first being "improper importation of goods by any person who, in relation to any goods ... would render such goods liable to confiscation"; and the second limb starts with "or abets the doing or omission or such an act." Hence, a mere importation that would render such goods liable to confiscation, as indicated above, is sufficient to attract penalty. Therefore, I am of the view that the case on hand gets covered under the mischief of Section 112 (a) ibid.

7.2 My above view is supported by the decision of the Hon'ble jurisdictional High Court in the case of Sankar Pandi Vs. Union of India reported in 2002 (141) E.L.T. 635 (Mad.) which decision has thereafter been upheld by the Hon'ble Apex Court [2018 (360) E.L.T. A214 (S.C.)], wherein similar penalty has been upheld.

7.3 However, considering the facts and circumstances of this case and the undisputed bona fides of the appellant, the penalty imposed under Section 112 (a) of the Customs Act, 1962 is reduced to Rs. 50,000/-. The impugned order as regards imposition of penalty under Section 112 (a) ibid. is modified to this extent.

In the result:

(i) The impugned order as regards the redemption fine is set aside;

(ii) The impugned order as regards the penalty under Section 112 (a) is modified to the extent as indicated above;

The appeal is partly allowed to the extent indicated hereinabove.

(Order pronounced in the open court on 10.03.2021)