ORDER
S.S. Kang, Vice President
1. Heard both sides.
2. The appellant filed this appeal against the impugned order passed by Commissioner of Customs whereby imported goods of assessable value of Rs. 30,37,799/- are confiscated and allowed to redeem the same on payment of fine of Rs. Three lakhs and penalty of Rs. 75.000/- was imposed.
3. The contention of the appellant is that they are exporter of rice and they have exported big consignment of rice. Part of the consignment was received back as the same has not been accepted by the buyer and appellant filed Bill of Entry in respect of that consignment. On examination, it was found that it is not up in the standard prescribed under the Prevention of Food Adulteration Act, 1954. The appellant also made a request for re-export, the same was allowed. The contention is that as the same goods i.e. rice which is exported was re-imported into India and due to passage of time, the rice was infected with insect etc. therefore, there is no mens rea on the part of the appellant to import into India the goods which are adulterated, therefore, are not liable for any penalty. The appellant also submitted that redemption fine is on the higher side. The contention of the appellant is also that while imposing penalty the Commissioner of Customs has not mentioned any provision of Customs Act. On the contrary, the Revenue submitted that as the appellant filed a Bill of Entry for import of basmati rice and the sample was sent for testing and Central Food Laboratory opined that the sample contained a large number of live and deal insects, insect fragments and insect larvae and the sample is adulterated. Therefore, the goods become prohibited and are liable for confiscation. The Revenue also relied upon the decision of Hon’ble Madras High Court in the case of CC v. Bansal Industries reported in 2007 (207) ELT 346 and submitted that for imposition of penalty under the Customs Act, element of mens rea is not required. In rebuttal, the appellant relied upon the decision of Punjab & Haryana High court in the case of CC v. Kamal Kapoor reported in 2007 (5) STR 251 and the decision of Hon’ble Calcutta High Court in the case of Extrusion v. CC .
4. In this case, the appellant exported a consignment of basmati rice and part of consignment was rejected by the buyer on the ground that the same is of a poor quality and the appellant filed Bill of Entry consignment of basmati Rice which was rejected by the exporter. Sample was sent for testing and it was found that the same was adulterated, therefore, the goods imported becomes prohibited under the Customs Act. The appellant relied upon the decision of Hon’ble Calcutta High Court in the case of Extrusion (Supra) where the Hon’ble High Court held that the facts and circumstances relevant to the bona fide conduct of an importer in importing the goods and circumstances leading to the import have to be taken into consideration for determining as the whether the goods should be confiscated and any redemption fine imposed. Even if the import by in contravention of any prohibition, the importer should not be visited with confiscation, if his conduct in making the import is bona fide. Even if confiscation is made in such a case, the redemption fine can only be a token one. In the case of CC v. Kamal Kapoor (supra), the Hon’ble High Court held that penal action is not permissible in absence of mens rea. The facts of the case are different from the present case as in the case before Hon’ble High Court the goods were imported into India for actual use but subsequently after import the goods were sold and Revenue wants to impose penalty on the person who purchased the goods from the importer and the Tribunal set aside the penalty on the ground that they were bona fide purchaser and there was no mens rea on their part to evade payment of duty.
5. I find that the facts of the present case are different from the facts of the case of the decision relied upon by the appellant. In the present case, the appellant exported the rice which was rejected by the buyer on the ground that the same was of poor quality as it contains weevils (insect).
6. The appellant filed Bill of Entry for import of the same consignment which was found to be adulterated, therefore, the goods become prohibited goods are liable for confiscation, therefore, I find no infirmity in the impugned order whereby the goods were ordered to be confiscated. The contention of the appellant is that the penalty of Rs. 75,000/- was imposed without mentioning any provisions of Custom Act. I find that in the finding portion of the order the Commissioner has gave a finding that the importer is liable for penal action under Section 112 of Customs Act. Therefore, in view of the decision of Hon’ble Madras High Court in the case of CC v. Bansal Industries (supra), I find no infirmity in the impugned order, the appeal is dismissed.
(Dictated & pronounced in open Court)