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2007 Supreme(Bom) 1540
IN THE HIGH COURT OF BOMBAY
F.I.REBELLO AND J.P.DEVADHAR, JJ.
The Commissioner of Customs (Import) -Appellant.
versus
Amrit Banaspati Co. Ltd. -Respondent.
CUSTOMS APPEAL NO.65 OF 2007
Decided on: 25TH OCTOBER, 2007
Advocate Appeared
Mr.Madhur R.Baya for petitioner.
Mr.G.N.Srinivasan with G.Hariharan i/b. H.P.Chaturvedi for respondents.
Headnote:Customs Act, 1962 - Sections 111(d), 112, 125 and 143-Customs Tariff Act, 1975, Section 5-Prevention of Food Adulteration Act,1954, Section 5-Goods as sub-standard confiscated by authority under Act of 1954-Redemption order with nominal fine made by Commissioner-CESTAT set aside order of Commissioner subject to re-process appeal filed by revenue- Held-Appeal allowed.-In the light of Board’s circular dated 15.6.2001 and the circular issued by the Ministry of Finance (Department of Revenue) on 15.10.2001 and 6.11.2006, imports of all edible/food products for domestic sale and manufacture shall have to be subject to all the conditions laid down under the 1954 Act and the Rules made thereunder. In the said circulars it is provided that if the product fails the prescribed test, then the Customs authorities must ensure that the goods are re-exported out of the country by following the usual adjudication procedure or destroyed as required under the relevant rules.
Under Clauses (l) and (m) of Section 2(ia) of the 1954 Act, an article of food shall be deemed to be adulterated if it fails the prescribed standards and is rendered injurious to health. Section 5 of the 1954 Act read with Section 2(33) of the Customs Act make it clear that import of food articles which do not conform to the standards prescribed under the 1954 Act and the Rules made thereunder are adulterated goods and import of such goods is prohibited.
Section 143 of the Customs Act permits import or export of goods on execution of bond, whether the customs officers are satisfied that compliance of certain requirements of law before import or export is not possible due to circumstances beyond the control of the importer or the exporter. The requirements referred to in Section 143 of the Customs Act which the importer or the exporter is unable to comply are the legal requirements and not the requirements relating to the quality of the goods to be imported or exported. Where an importer places an order for import of goods which conforms to the standards prescribed in India, but the goods, shipped to India by the foreign supplier are found to be not conforming to the standards prescribed in India, then it will not be a case covered under Section 143 of the Customs Act, because firstly, in such a case the dispute is regarding the quality of the imported goods and the dispute is not relating to the legal requirements to be fulfilled before importing the said goods. Secondly, shipment of goods to India that would conform to the standards prescribed in India is a requirement to be complied with by the foreign supplier and not the importer and in such a case, the importer cannot contend that it was his obligation to ship quality goods to India and that due to circumstances beyond his control sub-standard goods have been shipped to India. In other words, where the obligation to ship goods which conforms to the standards prescribed in India is on the foreign supplier, the importer cannot contend that due to circumstances beyond his control the goods have been shipped so as to invoke the provision of Section 143 of the Customs Act.
(PER J.P.DEVADHAR, J.)
1. As the issues raised in these group of Customs Appeals and group of Writ Petitions are common, all these cases are heard together and disposed of by this common Judgment.
2. In all the Customs Appeals filed by the revenue, the challenge is to the order passed by the CESTAT, wherein the Tribunal has set aside the confiscation / reexport orders passed by the assessing officer in the respective cases and directed the Customs Authorities to allow reprocessing of the confiscated goods and on reprocessing if the said goods meet the standards prescribed under the Prevention of Food Adulteration Act, 1954 (‘1954 Act’ for short) to allow clearance for home consumption.
3. In all the Writ Petitions, the importers have sought implementation of the orders passed by the CESTAT in their respective cases, except in the case of M/s.Jhunjhunwalla Vanaspati Ltd. (Appellate Side Writ Petition No.3536 of 2007) wherein the Writ Petition is directly filed in the High Court seeking clearance of the goods subject to repro cessing.
4. The common question of law raised in all these cases is:- " Whether on the facts and in the circumstances of the case, the Tribunal was justified in setting aside the order of adjudication and directing the customs authorities to allow reprocessing of the confiscated goods and thereafter allow clearance for home consumption, if the reprocessed goods are found to conform to the standard prescribed under the 1954 Act and the rules made thereunder? "
5. All the Appeals are admitted on the above question of law and by consent of the parties, the appeals as also the Writ Petitions are taken up for final hearing.
6. For the sake of convenience, we may set out out relevant facts in Customs Appeal No.65 of 2007 (Commissioner of Customs (Import) V/s. Amrit Banaspati Co. Ltd.). Counsel on both sides agree that the decision in the case of Amrit Banaspati would apply to all other cases.
7. Before narrating the relevant facts, we may refer to the relevant provisions of the Act and the Rules that are necessary for deciding the aforesaid question.
8. The Central Government in exercise of powers conferred under section 5(1) of the Customs Tariff Act, 1975 has framed the Customs Tariff (Determination of Origin of Goods under the Free Trade Agreement between the Democratic Socialistic Republic of Sri Lanka and the Republic of India) Rules, 2000. As per the said Rules, imports from Sri Lanka which comply with the conditions specified therein are entitled to concessional rate of duty.
9. Para 2.2 of the Export Import Policy 2004-09 provides that all imports during the said policy period shall be subject to domestic Laws, Rules, Orders, Regulations, technical specifications, environmental and safety norms as applicable to domestically produced goods. Para 8 of the General notes relating to imports covered under part I Schedule I of the Import policy framed under section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (‘1992 Act’ for short) provides that the imports of edible food products shall be subject to all the conditions laid down in the 1954 Act.
10. Section 2(33) of the Customs Act, 1962 as well as clauses (l) and (m) of Sections 2 (ia) and sections 5 & 6 of the 1954 Act are relevant and the same are reproduced below :- "Customs Act, 1962 S.2 - In this Act, unless the context, otherwise requires :- (33) ‘prohibited goods’ means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported, have been complied with; Prevention of Food Adulteration Act, 1954 (1954 Act) "2. Definitions - In this Act, unless the context otherwise requires - (i) ............. (ia) "adulterated" - an article of food shall be deemed to be adulterated - (a) to (k) ........ (l) if the quality or purity of the ar
