Confiscation of imported cloves: procedural negligence by customs leads to set aside of confiscation and penalties

Imported consignment of cloves was cleared under a Bill of Entry after customs duty payment despite an FSSAI rejection report; customs officials failed to prevent market distribution, amounting to administrative negligence, and issued the SCN belatedly. No evidence indicated provisional clearance, bond execution, misdeclaration by the importer, or physical availability of goods at SCN issuance. Consequently, confiscation and redemption fine lacked merit and were set aside, and penalty on the importer was not sustained. The appeal was allowed and the appellant declared eligible for consequential relief as provided by law.

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Issues: Whether the penalty, confiscation of imported goods and redemption fine imposed on the importer are sustainable where the customs authorities had the FSSAI rejection report on record at the time of clearance and the goods were cleared under proper Bill of Entry after payment of customs duty, and whether the confiscation and redemption fine should be set aside.

Analysis: The record shows the Bill of Entry was filed and the FSSAI test report was logged in the customs system prior to physical clearance; clearance was granted after the report was received and duties paid. The goods were not cleared provisionally, no bond or mis-declaration is shown, and by the time the show cause notice was issued the goods had been sold and were not available for seizure. There is a prolonged delay by the customs authorities in taking action despite having the rejection report, indicating administrative lapse rather than concealment or culpable conduct by the importer. Given these facts, the imposition of penalty and confiscation cannot be sustained where the department had the report and failed to act timely and there is no evidence of procedural irregularity by the importer during clearance.

Conclusion: The penalty, confiscation of goods and redemption fine are set aside and the appeal is allowed; the importer is entitled to consequential relief as per law.

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