2018 (1) TMI 29 - HC - Customs

High Court ruling on re-exported goods classification under Customs Act

Alchemist Food Ltd. Versus Additional Commissioner of Customs

The High Court allowed a review petition concerning the classification of re-exported goods as 'prohibited goods' under the Customs Act. The appellant's ... Prohibited goods - whether the goods in question which had been re-exported were ‘prohibited goods’ within the meaning of Section 111 and Section 112(d) of the Customs Act, 1962 read with Section 2(33) thereof had not been examined in the order dated 22nd December, 2014? - Held that: - the appellant did not question the refusal by the FSSAI to grant NOC - the appellant accepted the decision of the FSSAI which rendered the goods in question as ‘prohibited’ and then sought and was granted permission to re-export it on payment of redemption fine, the question urged in the Ground E has been rendered academic - appeal dismissed. Issues:1. Review petition regarding re-exported goods being 'prohibited goods' under Customs Act.2. Confiscation of goods by Customs Department due to non-compliance with labelling requirements.3. Interpretation of 'prohibited goods' under Section 2(33) of the Customs Act.4. Legal position on confiscation of goods contrary to any prohibition imposed by law.5. Appellant's request for re-export after refusal of NOC by FSSAI.6. Contradictory arguments by the appellant regarding the consignment being 'prohibited goods'.7. Reconciliation of appellant to refusal by FSSAI and permission for re-export.8. Reliance on previous court decision regarding non-compliance with labelling requirements.9. Acceptance of FSSAI's decision rendering goods as 'prohibited' and seeking re-export permission.10. Dismissal of appeal and pending application.Analysis:The High Court, after hearing both parties, allowed a review petition filed by the appellant concerning the classification of re-exported goods as 'prohibited goods' under the Customs Act. The Court recalled its earlier order and examined whether the goods in question were indeed prohibited, as per the Act. The appellant had imported food items but faced confiscation by the Customs Department due to non-compliance with labelling requirements. Despite paying the duty, the goods required a No Objection Certificate (NOC) from FSSAI, which was refused citing labelling discrepancies.The Court delved into the definition of 'prohibited goods' under Section 2(33) of the Act, emphasizing that goods prohibited under any law would fall within this ambit. Citing legal precedents, the Court clarified that any import contrary to prohibitions imposed by law could lead to confiscation and penalties. The appellant, acknowledging the refusal of NOC by FSSAI, requested re-export of the consignment without penalty, indicating awareness of the goods being 'prohibited.'Although the appellant argued that the labelling issue was curable and did not warrant the goods as 'prohibited,' the Court highlighted the appellant's acceptance of FSSAI's decision and subsequent re-export permission after paying a redemption fine. The Court dismissed the appellant's contentions, noting that seeking re-export approval after deeming the goods 'prohibited' precluded any declaration otherwise. The Court also differentiated a prior judgment focusing on Food Safety and Standards Act provisions, not addressing Customs Act implications.Ultimately, the Court upheld the decision to dismiss the appeal and any pending applications, considering the appellant's acceptance of the goods being 'prohibited' and the subsequent re-export process.