By TIOL News Service

AHMEDABAD, MAY 27, 2014: THE appellants had filed shipping bills for export of basmati rice/pusa basmati rice. The said consignments were examined by the officers of dock examination and representative samples were drawn and forwarded to Chief Chemist, Regional Agmark Laboratory, Mumbai to ascertain whether the samples meet specifications of the basmati rice as the appellant had sought the benefit of DGFT Notification No.55(RE-2008)/2004-2009, dt.05.11.2008 as amended by the Notification No.57/2009/14, dt.17.08.2010.

The report of the Chief Chemist, Regional Agmark Laboratory, Mumbai indicated that the average length of the grain and the ratio of the length to breadth of the grains of sample sent was within limit as indicated in DGFT notification, but it failed in the admixture i.e. mixture of basmati rice and non-basmati rice.

Based upon such report, the adjudicating authority took up the adjudication of all the shipping bills which were allowed export subject to analysis report and held that appellant had misdeclared the goods and hence the goods are liable for confiscation and appellants were also liable for penalty. In the case of M/s Green Village Agros Pvt. Ltd. , the first appellate authority set aside the confiscation as has been ordered by the adjudicating authority, but imposed penalties under the provisions of Section 114 (i) of Customs Act, 1962.

All the appellants are before the CESTAT.

It is submitted that since in the case of M/s Green Village Agros Pvt. Ltd. the Commr (A) had set aside the confiscation ordered by adjudicating authority and the Revenue had not come in appeal before the Tribunal against such setting aside of the confiscation, the confiscation as ordered by the adjudicating authority in other cases also need to be set aside.

It is further submitted that the conclusion of the adjudicating authority on the basis of admixture report that the goods which were sought to be exported is not basmati rice but is non-basmati rice is incorrect as the said notification does not require the admixture of the samples to contain specific percentage of non-basmati rice. It is also submitted that the co-ordinate Bench in Global Agro ImpexVs CC Noida 2012-TIOL-1408-CESTAT-DEL has specifically held that if the sample satisfies the requirement of grain size as per the notification, only that criteria has to be met and Revenue cannot rely on Agmark standard to say that the consignment is not basmati rice and prohibited for export.

The Revenue representative submitted that the export of non-basmati rice is prohibited in order to cater to the local population of India; that Agmarkis the final authority on any specification/compliance of the agricultural products. Reliance is placed on the decisions in Parvaz Overseas Pvt. Ltd. Vs CC Kandla 2011-TIOL-1997-CESTAT-AHM & Phonix Traders Vs CC Kandla 2011-TIOL-1551-CESTAT-AHM . He also submitted that in response to a reference made to Basmati Export Development Foundation vide letter dt.01.04.2014 it is informed that the consignments of rice having presence of more than 20% of non-basmati rice cannot be accepted as export of consignment of basmati rice and that the DGFT notification providing conditions for export of basmati rice from time to time cannot be applied even if the grain of rice meets certain parameters.

The Bench extracted the restrictions placed in Notification No.55(RE-2008)/2004-2009, dt.05.11.2008 as amended by Notification No.57/2009/14, dt.17.08.2010 and observed that the same did not indicate any other condition to be satisfied for coming to a conclusion whether the consignment of rice is basmati or non-basmati rice. Further, the said notification even does not indicate any admixture to be considered for the purpose of getting benefit of the said notification; that the Revenue authorities have held that though the export consignments meet the specification of the length and the ratio of length to breadth, has failed the admixture content, as the admixture content is more than limit; that no such condition is put in the notification, hence the Revenues argument on point of admixture is incorrect.

The Bench further referred to the decision cited by the appellant where an identical issue was involved and observed that the arguments made by the Revenue representative in the present case were same as was before the Bench in that case. Inasmuch as it was held the ratio of Global Agro Impex case covers the issue squarely in favour of the appellant.

The decisions cited by the Revenue representative were distinguished thus -

"…On perusal of the said case laws, we find that in both the cases, the appellants therein had not claimed the benefit of DGFT notification as was claimed in these cases. Since there was no claim of benefit of said notifications before the Customs authority, the Customs authority had drawn the samples and forwarded the same to Agmark authority who analyses the samples vis-as-vis specification of Basmati rice, as per Agmark standards. The Customs authority therein had not referred the samples to the Agmark authorities for testing the same with reference to any notification or conditions of notification. In the cases in hand, we find that the export consignments which are to be exported, were specifically claiming the benefit of Notifications No.55 & 57 and samples conformed to the restrictions laid down in the said notifications. Due to this difference in the facts, we hold that the case laws cited by ld. Departmental Representative will not carry their case any further."

In fine, the orders were set aside and the appeals were allowed.

In passing : Also see 2014-TIOL-288-CESTAT-MUM & 2012-TIOL-860-CESTAT-MUM.

(See 2014-TIOL-867-CESTAT-AHM)