Re-export of substandard food imports upheld where no misdeclaration or mala fide intent was shown, with reduced redemption fine and penalty.

Where freely importable food goods were denied FSSAI clearance but no misdeclaration or mala fide intent was established, re-export was treated as justified and the monetary liabilities were reduced on a lenient basis. The goods were found substandard and not fit for human consumption, yet the record showed no deliberate attempt to import prohibited goods, and the importer had already suffered delay and related losses. In these circumstances, the order permitting re-export was sustained, and the reduced redemption fine and penalty were upheld.

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Issues: Whether the reduction of redemption fine and penalty, and permission to re-export the imported consignment of food goods after denial of FSSAI NOC, was justified in the absence of misdeclaration or mala fide intent.

Analysis: The goods were freely importable, and no material was found to show misdeclaration or any deliberate attempt to import prohibited or substandard goods. The goods were tested and found substandard and not fit for human consumption, but both authorities permitted re-export. In such circumstances, and relying on decisions in comparable matters involving re-export of food items denied NOC by FSSAI, the Commissioner (Appeals) adopted a lenient approach in reducing the redemption fine and penalty. The record also showed that the importer had already suffered delay and related losses, while no mala fide conduct was established.

Conclusion: The reduction of redemption fine to Rs. 1,00,000 and penalty to Rs. 50,000 was upheld, and the order permitting re-export was sustained.

Final Conclusion: The revenue's challenge failed, and the importer obtained the substantive relief of re-export with the reduced monetary liabilities remaining in force.

Ratio Decidendi: Where imported goods are freely importable and no misdeclaration or mala fide intent is shown, denial of FSSAI clearance and consequent substandard quality may justify re-export with reduced redemption fine and penalty.

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