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Issues: (i) Whether the imported dietary supplements, found to be unsafe and misbranded under the Food Safety and Standards Act, 2006, were liable to confiscation and consequent penalty under the Customs Act, 1962; (ii) Whether the quantum of penalty imposed on the appellants required interference on the ground that it should have been linked only to the declared value of the goods.
Issue (i): Whether the imported dietary supplements, found to be unsafe and misbranded under the Food Safety and Standards Act, 2006, were liable to confiscation and consequent penalty under the Customs Act, 1962.
Analysis: The test reports recorded that the samples were unsafe and misbranded, and no material was produced to dislodge those findings. The import was therefore treated as contrary to the Food Safety and Standards Act, 2006, attracting the customs consequence of prohibited import and liability to confiscation. The record also supported the finding that the appellants were involved in the attempted clearance of such goods without compliance with the applicable safety requirements.
Conclusion: The issue was decided against the appellants and in favour of the Revenue.
Issue (ii): Whether the quantum of penalty imposed on the appellants required interference on the ground that it should have been linked only to the declared value of the goods.
Analysis: The penalty was examined with reference to the statutory ceiling under the Customs Act, 1962, and the authority accepted market value as the relevant basis in view of the prohibited nature of the goods and the incorrect declaration of value. The imposed penalty was held to be consistent with the statutory limit and appropriate to the nature of the misconduct.
Conclusion: The issue was decided against the appellants and in favour of the Revenue.
Final Conclusion: The penalties imposed for attempted import of non-compliant dietary supplements were sustained, and no interference was called for in appellate jurisdiction.
Ratio Decidendi: Where imported food goods are found on evidence to be unsafe or misbranded and the importer fails to rebut that finding, customs authorities may sustain confiscation and impose penalty within the statutory ceiling, with the value basis assessed in light of the prohibited nature of the goods and the facts of the import.
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