Ramesh Nair ORDER
Ramesh Nair, Member (J)
1. The brief facts of the case are that the appellant had imported a consignment of Sajji Khar at Mundra Port under warehousing Bill of entry No. 6272028 dated 28.12.2019. On 16.01.2020. The FSSAI authority certified that the appellant holds FSSAI license and the sample conforms to the standards laid down. On filing of Ex-Bond Bill of entry dated 30.06.2020 by the appellant for clearance of the goods of the warehouse, a show cause notice dated 14.08.2020 was issued proposing confiscation of the goods under Section 111(d) on the ground that as per FSSAI letter dated 19.03.2020, Sajji Khar was a non-specified product and approval under Non-Specified Food Regulations of 2017 was required. The adjudicating authority vide Order-in-Original No. MCH/ADC/AK/87/2020-21 dated 11.11.2020 confiscated the goods under Section 111(d) and allowed re-export of the goods on payment of redemption fine of Rs. 5 Lacs in lieu of confiscation, he also imposed a penalty of Rs. 2.5 Lacs under Section 112(a) on the appellant. Being aggrieved by the Order-in-Original, passed by the learned Additional Commissioner of Customs, Mundra, the appellant preferred an appeal to the Commissioner of Customs (Appeals) Ahmedabad. The learned Commissioner (Appeals) vide Order-in-Appeal No. MUN-CUSTM-000-APP-008-21-22 dated 27.04.2021, rejected the appeal. Being aggrieved by the impugned Order-in-Appeal, the appellant preferred the present appeal.
2. Shri Anil Balani, learned counsel and Shri Rahul Gajera, Advocate appeared on behalf of the appellant. Shri Anil Balani submits that the learned Commissioner failed to appreciate that in his letter dated 19.03.2020, the Director (Imports) FSSAI had admitted that Sajji Khar is traditionally used in making papad this means that there were long standard practice and tradition to allow import of Sajji Khar into India. Although the FSSAI, Non-Specified Food Regulations were in force and imports were being allowed till that date without any restriction. He further submits that the FSSAI authority had repeatedly granted NOC for clearance of this consignment of Sajji Khar after sampling it and testing it accordingly, the FSSAI authorities under the Regulations issued certificates despite that they were aware about Non-Specified Food Regulations yet they had chosen to permit the import of this consignment of Sajji Khar into India. He submits that the FSSAI certificates in the appellant's favour had neither been cancelled, withdrawn nor overruled, they were therefore final and binding. He further submits that the import was much prior to the CBIC Instruction of 21.05.2020. The Bill of entry was filed on 28.12.2019 therefore, the CBIC Instruction dated 21.05.2020 is not applicable in respect of consignment for which the Bill of entry was filed on 28.12.2019.
2.1. He, without prejudice to his above submission, submits that as per the judgment in the case of BGH EXIM LTD.- MANU/CM/0953/2003 : 2003 (157) ELT 598 (Tri.) & ROYALEX- MANU/CM/0117/2014 : 2014 (310) ELT 353 (Tri.) restricted goods could be imported into warehouse and then re-exported from the warehouse. The ratio of the judgments is very clear thus even if, re-export was to be ordered, the fine and penalty were not imposable. Accordingly, the order of the Learned Commissioner (Appeals) is contrary to and in violation of the law laid down by the CESTAT in the above two judgments.
2.2. He further submits that the appellant in any case had suffered detention and demurrage charges, delay in clearance of their goods, blockage of their funds and other losses. This punishment was sufficient hence, no fine and penalty should be imposed.
3. Shri R.P. Parekh, learned Superintendent (AR) appearing on behalf of the revenue reiterates the finding of the impugned order. He referred to Food Safety and Standards (Approval of non-specified food and food ingredients) Regulations, 2017 to submit that it is mandatory to obtain a prior approval for import of any non-specified food or food ingredients therefore, in the present case import of 'Sajji Khar' without approval is in violation of the Regulation 3 of Food Safety and Standards (Approval of Non-specified Food and Food Ingredients) Regulation, 2017 therefore, the goods was rightly confiscated and fine and penalty was correctly imposed.
4. I have carefully considered the submissions made by both the sides and perused the records. I find that in the present case, there is no dispute that the appellant have been issued license being a manufacturer/importer for manufacture of sweets and papad. The said license is scanned below:
The appellant has imported Sajji Khar which is the matter of dispute in the present case. In this regard the Director (Imports) of Food Safety and Standards Authority of India vide letter dated 23.06.2021 issued a clarification in respect of Sajji Khar/Papad Khar which is as under:-
File No. 1-1765/FSSAI/Imports/2018
Food Safety and Standards Authority of India
(A Statutory Authority established under the Food Safety and Standards Act, 2006)
FDA Bhawan, Kotla Road, New Delhi-110002
To,
Shri Gaurav Masaldan
Joint Secretary (Customs)
156-B, North Block, Central Sectt.,
Ministry of Finance,
Department of Revenue
Central Board of Indirect Taxes and Customs
New Delhi
Subject: Import of Sajji Khar/Papad Khar- reg.
In continuation to previous letter dated 19th March, 2020 (copy attached) on the subject mentioned above, it is to state that the said matter regarding standards for Sajji Khar was examined considering its wide spread use in papad manufacturing industry. Subsequently, the Food Authority in its 32nd meeting has approved that till such time the standards for "Sajji Khar/Papad Khar" are notified, it may be considered as "food not specified" and standards for the same may be adopted including the standards for heavy metals prescribed under FSS (Contaminants, Toxins and residues) Regulations, 2011.
In view of above, it may be noted that imported consignments of Sajji Khar/Papad Khar does not require product approval under FSS (Approval of non specified food and food ingredients) Regulations, 2017 and these may be considered as "food not specified" till standards are notified by FSSAI. The imported consignments shall be tested as per the standards for "foods not specified" including the standards for heavy metals prescribed under FSS (Contaminants, Toxins and residues) Regulations, 2011.
Yours faithfully,
(Dr. Amit Sharma)
Director (Imports)
To:
1. Director General, Directorate General of Foreign Trade (DGFT), Udhyog Bhawan, H-Wing, Gate No. 2, Maulana Azad Road, New Delhi, 110001
2. Commissioner (Single Window) & Director (Customs), CBIC- for necessary action and circulating to all Authorised Officers of Customs.
From the above clarification from the Food Safety and Standards Authority of India, it is clear that the imported consignments of Sajji Khar/Papad Khar does not require product approval under FSS (Approval of non-specified food and food ingredients) Regulations, 2017. Moreover, it is also pertinent to note that the appellant had obtained certificate from Food Safety and Standards Authority of India and certificate dated 25.09.2020 which is scanned below:-
4.1. As per the aforesaid certificate, the Authorised Officers confirmed the sample to the standards and provisions laid down under Regulation 2.1 of 'Other Foods or Foods Not Specified (Contaminants Toxins and Residues) Regulation, 2011' therefore, on this basis the appellant's imports cannot be found faulted.
4.2. Without prejudice to my above finding, it is also observed that CBIC directive issued on 21.05.2020 regarding the compliance of FSS (Approval of non-specified food and food ingredients) Regulations, 2017 whereas the Bill of entry for warehousing of goods was filed on 28.12.2019 and also the import has taken place much before the instruction dated 21.05.2020. In my view the instruction dated 21.05.2020 cannot be applied retrospectively. It is a settled law that any condition is imposed on the import shall not apply to the import already originated from the port of shipping. In the present case also the instruction dated 21.05.2020 was issued much after not only the import of goods but also after filing of warehousing Bill of entry. It is also undisputed fact that the same product i.e. Sajji Khar has been allowed to be imported without the condition as imposed by the department in the present case on the earlier occasions by various importers.
5. As per my above discussions and findings, I am of the view that the goods are not liable for confiscation. Accordingly, the impugned order is set aside. Appeal is allowed with consequential relief.
(Pronounced in the open court on 24.02.2022)
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