T.K. Jayaraman : This misc. application, the stay application and the appeals are taken up together for disposal as per law in view of the urgency in the matter.

2. The misc. application has been filed for directing the Department to release the goods, which are confiscated. Since the DGFT had issued a Notification dated 19.08.2008 lifting the ban on export of Non Basmati Rice (seed quality) and since the goods are perishable in nature due to a living organism contained in it, the appellant prayed for a direction to Revenue to permit the export of the consignment in question.

3. Shri G. Shiva Dass, the learned advocate, appeared on behalf of the appellants and Shri V.P.C. Rao, the learned SDR, for the Revenue.

4. We heard both sides.

5. The brief facts of the case are that the appellant filed a Shipping Bill dated 25.06.2008 for the export of 'Non Basmati Hybrid Rice Seed' valued at Rs. 2,17,14,312/- and weighing 150 MTs. In terms of the DGFT Notification No. 93 (RE-2007)/2004-2009 dated 01.04.2008, export of 'Non Basmati Rice' has been prohibited vide Sl.No. 45A. The list of Tariff Item HS Code also includes 1006 10 10, which covers "Rice in Husk (paddy or rough) of seed quality". As per the Schedule to the Customs Tariff, Non Basmati Rice of Seed Quality is classifiable under CSH 1006 10 10. On the basis of intelligence, the DRI got the goods detained at Chennai through their Chennai Unit while the goods were about to be loaded on to the vessel for shipment to Philippines. The appellants were under the impression that the said goods were not prohibited by the DGFT Notification because there is no specific mention against the column prohibited as far as the impugned goods are concerned. The appellant's contention was not accepted by the Customs. Proceedings were initiated against the appellants which culminated in the impugned order. The Adjudicating Authority gave a finding that the impugned goods are clearly prohibited. Hence, he confiscated the same under Section 113 (d) of the Customs Act, 1962. A Redemption fine of Rs. 75,00,000/- was imposed under Section 125 ibid. Further, a penalty of Rs. 4.5 crores was imposed under Section 114 (i) of the Customs Act.

6. The appellants are highly aggrieved over the impugned order. It was urged that only export of Non Basmati Rice is not permitted under the said Notification of the DGFT. The terms 'seed', 'paddy' and 'rice' have different connotations. The 'seeds' are used for sowing or planting. Though the terms 'rice' and 'paddy' are used interchangeably in international contexts, in the trade parlance, they refer to different commodities. 'Paddy' refers to the grain harvested and threshed but still has its husk and bran. At this stage, the paddy is not edible. The paddy has to undergo the process of milling or de-husking for obtaining rice.

6.1 The rice which is obtained after milling the paddy cannot germinate and be used as seed. The paddy seeds exported by the appellant are developed after considerable research and their expertise. As such, the seed quality paddy can never be equated with rice. Sl.No. 45A of the 2nd Schedule (Export Policy) reads as under:

A reading of the above provisions show that only export of 'Non Basmati Rice' is prohibited under the said Notification and there is no restriction in the Policy for the paddy seeds to be exported by the appellant. The Policy is determined by the description of the item sought to be placed under restriction and not by the code as stated in the Export Policy itself, which is as follows:

"2. Code does not limit the item description

The export policy of a specific item will be determined mainly by the description and nature of restriction in the schedule. The code number is illustrative of cla