2025 (11) TMI 314 - AT - Customs

Importer's repeated use of an unauthorized port for dairy imports upheld; confiscation and redemption fine affirmed

CESTAT dismissed the appeal and upheld confiscation and redemption fine. The importer admitted bringing a dairy product through an LCS not listed as an ... Violation of provisions of Livestock Importation (Amendment) Act, 2001 read with Section 11 of the Customs Act, 1962 - import of dairy/livestock products through a Land Customs Station (LCS) not listed as an authorized port under the Department of Animal Husbandry Notification S.O.2666(E) (as amended) - HELD THAT:- The appellant has imported 'PRAN LASSI (Yogurt Flavored Drinks)' under CTH 04039090 which refers to the item as milk product as per the Customs Tariff. As per the procedure for import of livestock products into India, all live-stock products given in the SCHEDULE appended to the said Notification No. S.O. 2666, dated 16.10.2014 have to be imported only through the specified ports. The Changrabandha LCS is not one of the authorized ports to import the livestock products as per the Notification issued by the Department of Animal Husbandry, Dairying and Fisheries in the Ministry of Agriculture under S.O. 2666(E) dated 16.10.2014, as amended. Hence, the said importer-appellant did not comply with the provisions of the Department of Animal Husbandry Dairying and Fisheries. In order to ensure compliance of imported dairy products, FSSR 2011 mandated that consignment of dairy products imported into India shall be accompanied with veterinary certificate issued by Competent Authority of Exporting country. In the present case, it is a fact that at the time of importation, the appellant could not produce any veterinary certificate. Later, they produced veterinary certificate under No. 33.01.0000.110.53.031.15-113 dated 25.01.2020 issued by the Department of Livestock Services, before the assessing authority - The Joint Director, Institute of Animal Health & Veterinary Biological (IAH&VB), Kolkata has submitted their test report that all counts are within permissible limit. Thus, the goods as such has satisfied all the legal requirements, except that the importation has taken place through an unauthorized port. From the facts and evidence available on record, it is evident that the appellant was very well aware that Changrabandha LCS has not been authorized to import the livestock products as per the Notification issued by the Department of Animal Husbandry, Dairying and Fisheries in the Ministry of Agriculture under Changrabandha LCS. In spite of that, they continued to import many consignments through the same port again and again in violation of the said S.O. 2666(E) dated 16.10.2014. It is noted that the goods imported by the appellant is a food product which needs to comply with certain standards at the time of imports. Thus, the goods need to be checked by the authorities having expertise to examine the said goods. Such expert authorities are not available on all the Ports and hence, importation of these items have been restricted only through the designated ports where such experts are available for examination of the said goods - the appellant importing the goods though Changrabandha LCS, knowing very well that it was not an authorized port to import such goods, has violated the provisions of the said S.O. 2666(E) dated 16.10.2014. Accordingly, the lower authority has rightly confiscated the goods under Section 111(d) of the Customs Act, 1962 as improper importation by the appellant through the Port which is not a 'notified port' as per the Notification. A similar view has been taken by the Tribunal, Delhi in the case of Broadway Overseas Ltd. vs. Commissioner of Customs, Amritsar [2014 (8) TMI 877 - CESTAT NEW DELHI], wherein the Tribunal has held 'There is no dispute that in terms of ITC note No. 4 Chapter 72 of the ITC (HS), in respect of import of certain goods, there is restriction about the port at which the goods can be imported and in terms of the provisions of the licensing notes, the secondary/defective HR Coils could be imported only at the sea ports of Mumbai, Chennai or Kolkatta. The reason for this restriction would be that expertise for examination of such goods would be available only at the major ports and not at the every port. The import of the goods, in question, at ICD, Ludhiana, notwithstanding the fact that the procurement certificates issued by the Superintendent permitted their import at this ICD, is contrary to the ITC provisions. Therefore, I am of the view the goods have been correctly confiscated.' There are no infirmity in the impugned order upholding the imposition of Redemption Fine by the Assessing Officer. Accordingly, the appeals filed by the appellant do not merit consideration and the same is rejected - appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether importation of dairy/livestock products through a Land Customs Station (LCS) not listed as an authorized port under the Department of Animal Husbandry Notification S.O.2666(E) (as amended) constitutes contravention making goods liable to confiscation under Section 111(d) of the Customs Act, 1962. 2. Whether production of a veterinary certificate after importation and successful sanitary/bacteriological test results can cure the defect of importation through an unauthorized port and negate confiscation or reduction of penal consequences. 3. Whether repeated importation through an unauthorized port, despite knowledge of the port restriction, aggravates the contravention and affects the appropriateness of redemption fine and penalty. 4. Whether, in the absence of documentary evidence, an allegation that similar consignments were cleared through another LCS within the same Commissionerate can be relied upon to mitigate or negate the penal consequences. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Unauthorized port importation and confiscation under Section 111(d) Legal framework: Notification S.O.2666(E) prescribes specified seaports/airports/locations through which livestock products must enter India where Animal Quarantine and Certification Services (AQCS) stations are located; Section 11 Customs Act requires compliance with statutory import conditions; Section 111(d) Customs Act provides for confiscation where importation is in contravention of law. Precedent Treatment: The Tribunal's prior decision in a cited authority held that importation at non-designated ports contrary to statutory/ITC restrictions warrants confiscation, albeit with discretion on redemption fine and penalty. Interpretation and reasoning: The Court examined the tariff classification (dairy product) and the Notification which expressly restricts importation of listed livestock products to specified ports with AQCS expertise. Import through Changrabandha LCS - not a notified port - was a clear statutory breach. The absence of requisite port facilities (AQCS expertise) justified legislative restriction and the application of confiscation provisions because the statutory aim is to ensure expert sanitary inspection at designated locations. Ratio vs. Obiter: Ratio - Import through a non-notified port where notification prescribes designated ports constitutes improper importation attracting confiscation under Section 111(d). Obiter - observations on rationale for port restriction (availability of expertise) reinforce but do not extend the legal holding. Conclusion: Confiscation (and attendant penal consequences) is legally sustainable where importation occurs through an unauthorized LCS in breach of the Notification. Issue 2 - Post-import veterinary certificate and laboratory compliance curing the defect Legal framework: FSSR 2011 and the Notification require veterinary certificates and sanitary compliance; customs authorities assess compliance at importation. Precedent Treatment: Authorities have treated timely production of required certificates as material to assessment; however, statutory port restriction addresses locus of importation independently of later compliance. Interpretation and reasoning: Although a veterinary certificate was produced belatedly and laboratory tests showed bacteriological parameters within permissible limits, the Tribunal found these facts do not negate the initial statutory violation of importing through a non-designated port. The regulatory scheme separates (a) locus restriction to ensure availability of AQCS and (b) sanitary fitness of goods; meeting sanitary standards post-import does not cure the procedural/territorial breach which the Notification was designed to prevent. Ratio vs. Obiter: Ratio - Subsequent compliance with sanitary requirements and possession of a veterinary certificate do not validate importation through an unauthorized port for purposes of defeating confiscation under Section 111(d). Obiter - the Court acknowledged factual compliance as relevant to remediation and may bear on quantum of fines/penalties but not on the core illegality. Conclusion: Post-import production of veterinary documentation and favorable lab reports do not extinguish the statutory contravention arising from importation via an unauthorized port. Issue 3 - Repeated importation through unauthorized port and appropriateness of redemption fine/penalty Legal framework: Customs statutes confer discretion on authorities to impose confiscation, redemption fines and penalties; frequency and knowledge of breach are relevant to culpability and sanction severity. Precedent Treatment: The cited Tribunal authority reduced redemption fine while upholding confiscation in view of circumstances; higher courts have affirmed such approach recognizing mitigating factors but upholding core confiscation principle. Interpretation and reasoning: The record established repeated imports through the same non-notified LCS and that the importer was aware of the port's non-authorized status. The Tribunal emphasized the importer's knowledge and persistence as aggravating factors supporting confiscation and the imposition of redemption fine. While the assessing authority characterized the breach as venial and fixed redemption fine at 10% plus penalty, the appellate authority upheld the redemption fine (penalty was set aside earlier). Reliance on precedent supports affirming confiscation/redemption fine while recognizing discretion on quantum. Ratio vs. Obiter: Ratio - Repeated, knowing breaches bolster the propriety of confiscation and sustain imposition of redemption fine; discretion remains for mitigation but not to negate statutory contravention. Obiter - comparative proportionality of fines in differing factual matrices. Conclusion: Repeated, knowing importation through an unauthorized port justifies upholding confiscation with redemption fine; mitigation of quantum remains discretionary but not mandatory. Issue 4 - Unsubstantiated claim of prior clearances at another LCS as a ground for mitigation Legal framework: Appellate adjudication requires documentary proof to support factual claims that could affect findings of contravention or mitigation. Precedent Treatment: Unsupported assertions without documentary evidence are not sufficient to overturn recorded findings of statutory breach. Interpretation and reasoning: The appellant alleged that similar consignments had been cleared through another LCS in the same Commissionerate, implying discriminatory/irregular treatment. The Tribunal required documentary proof; absence of such evidence precluded reliance on the assertion. The Court treated the unsupported claim as immaterial to statutory violation and sanction appropriateness. Ratio vs. Obiter: Ratio - Allegations of inconsistent treatment require documentary support; unsupported assertions cannot negate statutory contravention or mitigate penalties. Obiter - none beyond evidentiary principle reiterated. Conclusion: Without documentary evidence, the claim of similar consignments being cleared elsewhere does not affect the finding of contravention or the imposition of redemption fine. Overall Conclusion The tribunal upheld that importation of dairy/livestock products through a non-notified port contravenes the Notification and renders goods liable to confiscation under Section 111(d) of the Customs Act, 1962; subsequent veterinary certification and satisfactory laboratory tests do not cure the territorial/procedural breach; repeated knowing breaches justify upholding redemption fine; unsupported claims of disparate treatment are inadmissible to negate statutory breach. Accordingly, the appeals were rejected and the redemption fine sustained.