M/s. Sri Sai Traders vs Commissioner Of Customs

The present appeal has been filed by the assessee against Order-in-Appeal No.37/2020-TTN (CUS) dated 14.10.2020 passed by the Commissioner of Customs and Central Excise (Appeals), Tiruchirappalli.

Brief facts of the case are summarized as under:

(i) The appellant had filed Bill-of-Entry No. 4836393 dated 09.09.2019 for the import of 252.742 MTs of maize of Myanmar origin valued at Rs.51,72,638/- from the supplier M/s. Myat Myittar Mon Company Ltd., Yangoon.

(ii) The Single Window Interface routed the above said Bill-of-Entry to PQ/FSSAI clearance.

(iii) The Food Safety and Standards Authority of India ('FSSAI' for short) vide its report NCC No. NCC201900054099 dated 20.09.2019 rejected the above import cargo as it did not conform to the standards laid down for aflatoxin as per Regulation 2.4.6.3 of the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 and Regulation 2.2.1.1 of the Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011 thereof in that 1) the extraneous matter content exceeded the maximum permissible limit and 2) total aflatoxin content exceeded the permissible limit.

(iv) Though the importer applied for second examination, the FSSAI once again rejected the clearance vide RNCC No. 201900000199 dated 23.10.2019 under the provisions mentioned above.

(v) After due process of law, the Adjudicating Authority vide Order-in-Original No. 76/2019-JC dated 13.12.2019 ordered confiscation of the above said imported cargo under Section 111 (d) of the Customs Act, 1962 read with the provisions of the Food Safety and Standards Act, 2006 and the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011, gave an option to pay fine of Rs. 10,00,000/- in lieu of confiscation under Section 125(1) of the Customs Act, 1962 for the purpose of re-export at their own expenses, risk and consequences and imposed a penalty of Rs. 5,00,000/- on the appellant under Section 112 (a) of the Customs Act, 1962.

(vi) Thereafter, the assessee preferred appeal before the Commissioner of Customs and Central Excise (Appeals), Tiruchirappalli, who vide order impugned herein rejected the appeal filed by the assessee, while upholding the order passed by the Adjudicating Authority.

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 Revenuerespondent.

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 under similar circumstances, the Tribunal has deleted the redemption fine imposed on the assessee in a number of cases. In the case of M/s. Rose Mary International v. Commissioner of Customs, Tuticorin in Customs Appeal No. 41693 of 2019 [Final Order No. 40148 of 2020 dated 14.01.2020], the Tribunal had held as under:

"4. The issue is with regard to redemption fine and penalty imposed. The Tribunal in the case of M/s. Arihant Groups vide Final Order No.41058/2019, dated 16.09.2019 had considered the very same issue with regard to redemption fine imposed for direction of reexport of goods. In para 5 of the said order, the Tribunal relied upon the decision of the jurisdictional High Court in M/s. Sankar Pandi Vs Union of India reported in 2002 (141) E.L.T.635 (Mad.), which was upheld by the Supreme Court as reported in 2018 (360) E.L.T. A.214 (S.C.). Following the said decision, I am of the view that the redemption fine imposed for re-export of the goods cannot sustain and requires to be set aside, which I hereby do."

6.2 In view of the foregoing, the redemption fine charged under Section 125(1) of the Customs Act, 1962 is unsustainable and the same is required to be deleted, which I hereby do.

Coming to the other issue of levy of penalty under Section 112 (a) of the Customs Act, 1962, following the ratio laid down in the above order, a proportionate penalty of Rs. 1,25,000/- is confirmed as against Rs. 5 Lakhs.

In the result:

(i) The impugned order as regards the redemption fine under Section 125 (1) ibid. is set aside;

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

The appeal is partly allowed.

(Order pronounced in the open court on 26.03.2021)