Re-imported tea for reprocessing and re-export cannot be refused on domestic-consumption circulars alone, Kerala HC says

Customs circulars aimed at goods imported for domestic consumption did not bar permission for re-imported tea rejected for non-conformity with food standards to be reprocessed in a bonded 100% export oriented unit and re-exported under customs supervision. The authority had to consider whether reprocessing could bring the goods into compliance and whether suitable safeguards could ensure that the goods did not enter the domestic market. Given the perishable nature of the consignment, a practical approach was required. Permission could not be refused on the circulars alone, and the request was to be considered expeditiously; the penalty already imposed was left undisturbed.

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Issues: Whether the re-imported tea consignment, found not to conform to food standards, could be permitted to be reprocessed in a 100% export oriented unit and re-exported instead of being destroyed, and whether the customs circulars relied on by the authorities barred such permission.

Analysis: The circulars relied on by the authorities were read as applying to goods imported for domestic consumption. They did not address the situation where rejected exported goods are re-imported by the exporter for reprocessing and re-export. The petitioner had consistently sought permission to move the goods to a bonded export-oriented unit under customs supervision so that the goods would not enter the market. The earlier refusal had not considered whether reprocessing could make the goods conform to the relevant standards or whether appropriate conditions could secure re-export. In view of the perishable nature of the goods and the possibility of reprocessing, a realistic approach was required.

Conclusion: Permission to seek reprocessing and re-export could not be denied on the basis of the circulars alone, and the customs authority was directed to consider the request expeditiously and, if appropriate, permit reprocessing in a 100% export oriented unit with suitable safeguards. No interference was made with the penalty already imposed.

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