Cus - Sampling size required for testing 'Latex Prophylactic Condoms' is 315 pieces whereas Drugs Testing Lab, Chennai took sample size of 45 pieces and this is serious discrepancy while concluding that goods were sub-standard - appeal allowed: CESTAT
By TIOL News Service
MUMBAI, FEB 16, 2015: THE appellant filed bill of entry for clearance of the goods declared as "Latex Prophylactic Condoms" classified under CTH 40141010. The bill of entry was facilitated under RMS with order "Assessment and examination has not been prescribed for the B/E" subject to ADC NOC. RSS Sample of all the 04 batches covered under the bill of entry were forwarded to ADC. ADC allowed the release of 03 batches of the said consignments. Remaining one batch was not given ADC NOC as it was not of standard quality. Since the ADC NOC for the impugned goods was not given it was contended that there is violation of the provisions of Drug and Cosmetics Act, 1940 and Rules hereunder.
Accordingly, it was proposed that the goods valued at Rs. 4.84 lakhs were liable for confiscation and appellant is liable for penalty. The adjudicating authority confiscated the goods and gave an option for redemption and re-export of the goods on payment of redemption fine of Rs. 80,000/- and penalty of Rs. 40,000/- was also imposed.
The Commissioner (Appeals) upheld the order and, therefore, the importer is before the CESTAT.
It is submitted that -
+ The representative samples were drawn and were got tested from the Central Drugs Testing Laboratory, Chennai but the testing was not done as per the method prescribed under Drugs and Cosmetics Rules. Inasmuch as it is their submission that the standards for mechanical contraceptives shall be such as are laid down in Schedule R.
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In the Schedule R, in respect of condoms as per the procedure prescribed under clause 4B; sample condoms shall be tested for Bursting Volume and Pressure Test. Statistical sampling for this test shall be done in accordance with the plan set out in Annexure III to this Schedule. Schedule III, as per sampling plan for Bursting Volume and Pressure Test under Annexure III for batch size of 150001 lakhs to 5 lakhs the sample size should be 315 and when out of 315, if the rejection number comes to 11 or more, the batch shall be rejected.
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+ As per the test report it is apparent that the prescribed statutory sampling plan was not followed for the reason that test of 45 pieces was done as against prescribed number of 315.
+ Vide their letter dated 10/12/2012 addressed to the The Assistant Drug Controller (India), Director General of Health Service, JNPT and copy to the Asst. Commissioner of Customs, JNPT they requested for re-testing however, the said letter was not considered nor re-testing was allowed.
+ As per the test report of the supplier the goods were of standard prescribed. It is also submitted that when it was found that the goods is of sub-standard the appellant proposed the re-export of the goods and factually same was re-exported and for this reason also goods are not liable for confiscation and penalty.
+ Further it was provided in Rule 141 of Drugs and Cosmetics Rules, 1945, that the appellant have option of re-shipment, therefore, when Drugs and Cosmetics Rules itself provides for re-shipment, the goods can not be confiscated.
The AR reiterated the findings of the lower authorities.
The Bench pored over the provisions of Drugs and Cosmetics Rules, 1945 referred to by the appellant and observed -
++ As against the (aforesaid) method of testing provided under Drugs and Cosmetics Rules, 1945, it is observed from the test report given by Central Drugs Testing Laboratory, Chennai, the norms prescribed in Rules were not followed inasmuch as batch size taken is 45 pieces, therefore, the test carried out by the Central Drugs Testing Laboratory, Chennai can not be considered in accordance with law.
++ On this serious discrepancy, the appellant pointed out to the authority and also requested the re-testing of the sample in accordance with the method prescribed under Drugs and Cosmetics Rules, 1945. The same was neither considered nor sample was re-tested. Therefore, I am of the view that subject goods was not liable for confiscation.
++ I also agree that Rule 141 of the Drugs and Cosmetics Rules, 1945 provides for re-shipment of the goods and goods were admittedly re-exported. For this reason also, the goods are not liable for confiscation and also not liable for consequential penalty.
Holding that orders of the lower authorities are not sustainable, the same were set aside and the appeal was allowed with consequential relief.
(See 2015-TIOL-341-CESTAT-MUM)
