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M/s Arya International Versus Commissioner of Customs-Kandla

2016 (1) TMI 834 - CESTAT AHMEDABAD

Export of Basmati Rice - length and breadth, of the grain - AGMARK standards - prohibited items or not - appellant had exported goods claiming the benefit of the Notification No 55(RE-2008)/2004-2009 - Held that:- The grain they have exported undoubtedly satisfies the same as per the test report. However, we find force in the argument of the Learned Authorised Representative for the Revenue that these specification of "Nature of Restrictions" is applicable to the goods which is described under c .....

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Notifications (Supra) as "Basmati Rice", and therefore Customs Authorities are fully justified to verify the impugned goods are Basmati Rice or not. We, therefore, find no illegality in the orders of the lower authorities in the said respect.

Confiscation of goods already exported - Held that:- There is a difference between confiscation and liable to confiscation. It is settled law that the goods which are liable to confiscation can be ordered for to be confiscated, and fine in lieu o .....

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he case are that the appellant herein has filed two appeals against two separate orders of the Commissioner (Appeals) in respect of a single Order in Original. The first order by Commissioner (Appeals) was on an appeal filed by the assessee appellant and the second order was on the appeal filed by the Revenue, against the same Order in Original. The Commissioner (Appeals) has taken up these two appeals separately and had issued two separate orders. Aggrieved by the said two orders of Commissione .....

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reproduced below: NOTIFICATION NO. 55 (RE-2008)/2004-2009 NEW DELHI, NOVEMBER, 2008 S.O.(E) In exercise of the powers conferred by Section 5 read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992 (No.22 of 1992) and also read with Para 1.3 and Para 2.1 of the Foreign Trade Policy, 2004-2009, the Central Government hereby makes the following amendments to Notification No.93(RE-2007)/2004-2009 dated 1st April, 2008 read with Notification No. 37 (RE-2008)/2004-09 date .....

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ide Notification No.32 dated 19th August, 2008. 45AA 10063020 Kg. Basmati Rice including Pusa Basmati 1121 (Dehusked (Brown), semi-milled, milled both in either par-boiled or raw condition) Free 1. Grain of rice to be exported shall be more than 7 mm of length and ratio of length to breadth of the grain shall be more than 3.6; 2. Exports to Russian Federation permitted subject to pre-shipment quality certification issued by Sri Ram Institute for Industrial Research or any other agency as may be .....

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in unchanged, and shall continue to apply. 3. This issues in public interest. 3. The Learned Counsel submits that against Sl. No 45AA of the Notification there are only two ingredients specified under column 6 of the said Notification which are qualifying or restrictive factors for Basmati Rice to be eligible for the benefit of the said Notification. The said nature of restriction reads as follows: "Grain of rice to be exported shall be more than 7 mm of length and ratio of length to breadt .....

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eyond the above said conditions of the Notification and have relied upon the specifications under AGMARK standards. He contends that this was not called for as the Notification does not prescribe the same. He also submitted that the goods were exported and the assessments were finalised and therefore confiscation and redemption fine cannot be sustained in the instant case. He also argued that penalty under Section 114AA is not imposable as the same was introduced to penalize fraudulent exporters .....

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Learned Authorised Representative for Revenue submits that at column No 4 of Sl. No 45AA, of the Notification No 55 (RE-2008)/2004-2009, gives the description of the item allowed to be exported under the said Notification as: "Basmati Rice including Pusa Basmati 1121 (Dehusked (Brown), semi- milled, milled both in either par-boiled or raw condition)." 6. He submits that Column 6 of the Notification mentions nature of restriction of "length, and the ratio of length and breadth, of .....

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04-2009 dtd 30.9.2008 which inter-aliea mentions that for deciding whether the goods are Basmati Rice or not, AGMARK testing can be done. He further submits that the goods were exported under the benefit of the impugned Notification and samples were drawn and hence the assessee appellant is bound by the test report and the consequent action is taken based on the test report. Therefore, there is no illegality with regard to confiscation of the goods and redemption fine. Further, he drew the atten .....

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. He also relied upon the case law of Parvaz Overseas Pvt Ltd vs. CC, Kandla - 2013 (294) ELT 233 (Tri. Ahmd). 7. On perusal of the records and the arguments of both sides, we find that the appellant had exported goods claiming the benefit of the Notification No 55(RE-2008)/2004-2009 as amended, under Sr. No 45AA of the said Notification. We agree with the Learned Counsel for the appellant that the conditions specified as nature of restriction of the said Notification are the dimensions of lengt .....

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the goods allowed to be exported under this Notification has to be Basmati Rice. We find that the original Adjudicating Authority has gone into the great detail whether the impugned goods are Basmati Rice or not. He has quoted the AGMARK specifications at Para 12.4 of the impugned Order in Original. For clarity, the same is reproduced below: "Grade Specification (quality) of Basmati parboiled rice (for export only) A) General characteristics: 1. The grains shall be long slender of creamy-w .....

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nd shall carry no sign of mould or containing webs and dead or live weevils; f) Shall have length 6.0 mm. and above and length breadth ratio 3 and above; g) Shall be in sound merchantable condition. B) Special characteristics: Grade designation Special characteristics (maximum limits of tolerance) (percent by weight) Foreign matter Broken and fragments Other rice including red grains* Damaged discoloured and chalky grains Moisture Special 0.5 5.0 10.0 1.0 14.0 A 1.0 10.0 15.0 2.0 14.0 B 2.0 10.0 .....

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the kernels, whole or broken, which have 25 percent or more of their surface coated with red bran. 4) Damaged discoloured- and chalky grains Shall include rice, kernels, broken, fragments or whole that are internally damaged or discoloured, materially affecting the quality. Chalky grains shall be the grains at least half of which is milky white in colour and brittle in nature." 8. He has held that the goods exported in the instant case are not Basmati Rice, in the light of the test result o .....

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a Agrico Export Pvt Ltd (Supra) cited by the Learned Counsel, the decision of the Tribunal was based on the decision of Global Agro Impex case, and on the grounds the Learned Authorised Representative 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. In the instant case, the DGFT policy circular (Supra) has clearly indicted that the same may be done. Hence, the said case law .....

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that the samples were drawn and sent for test. It is seen that the benefit of the Notification rests upon meeting certain parameters which can only be ascertained by testing samples. However, the goods were allowed to be exported, pending the test results and the assessee agreed for taking the samples and being bound by the test results and allowing the clearance of the goods. Such clearance of the goods, pending the test results, is a facilitation in favour of the assessee as otherwise the goo .....

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