TaxTMI 
TaxTMI 
2008 (9) TMI 230
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....heard both sides. 5. The brief facts of the case are that the appellant filed a Shipping Bill dated 25-6-2008 for the export of 'Non-Basmati Hybrid Rice Seed' valued at Rs. 2,17,14,312/- and weighing 150 MTs. In terms of the DGFT Notification No. 93-(RE-2007)/2004-2009 dated 1-4-2008, export of 'Non Basmati Rice' has been prohibited vide Sl. No. 45A. The list of Tariff Item HS Code also includes 1006 10 10, which covers "Rice in Husk (paddy or rough) of seed quality". As per the Schedule to the Customs Tariff, Non Basmati Rice of Seed Quality is classifiable under CSH 1006 10 10. On the basis of intelligence, the DRI got the goods detained at Chennai through their Chennai Unit while the goods were about to be loaded on to the vessel for shipment to Philippines. The appellants were under the impression that the said goods were not prohibited by the DGFT Notification because there is no specific mention against the column prohibited as far as the impugned goods are concerned. The appellant's contention was not accepted by the Customs. Proceedings were initiated against the appellants which culminated in the impugned order. The Adjudicating Authority gave a finding that the impugne....
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....it level under 1006 30 and is different from paddy which is falling under 1006 10. The mention of the heading corresponding to paddy seeds in column 1 cannot restrict the export of paddy seeds. The policy itself has stated that the codes indicated in the said column are not relevant for the purpose of interpretation of the Policy and what is relevant is the description of the goods mentioned in column 4 of the Policy. 6.3 Export Policy relating to seeds are covered under Sl. Nos. 49 to 58 of the 2nd Schedule to the Export Policy. In terms of the Policy, as per Sl. No. 50 of the ITC (HS) Classification of Export and Import Items, Paddy Seeds (wild variety) falling under HS code 1006 20 00 alone is restricted and export is permitted under licence. No other variety of paddy seeds is restricted for export requiring licence. The seeds exported by the appellant are not wild variety seeds and they have also submitted necessary affidavit to this effect and there is no dispute regarding this. 6.4 Exported seeds are not fit for human consumption and are commercially not viable to be used as Rice. It was also urged that the National Seed Policy is different from Foodgrain Policy. Export....
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.... invoice, shipping bill and all other shipping documents. The said variety is notified by the Ministry of Agriculture vide its Notification dated 9-9-1997. Thus, there is no misdeclaration or any violation of the provisions of the Customs Act in their exportation. The appellants made a true declaration and submitted all the statutory documents before the Customs authorities. Therefore, the goods exported by the appellant are not liable for confiscation and, therefore, no penalty is justified under Section 114(i) of the Customs Act. In a case of interpretation of the Policy, such a huge penalty of Rs. 4.5 crores is not warranted. Several case-laws were relied on. Moreover, penalty should not be imposed when the appellant is acting under a bona fide belief. 7. The learned Departmental Representative urged that the impugned order is legal and proper. The Authority, clarifying the export policy is the DGFT, and when the DGFT has stated that the impugned item is prohibited in terms of the Notification, the appellant cannot argue that the same is not prohibited. Hence, he requested the bench to uphold the impugned order. 8. On a very careful consideration of the issue, we find that....
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....ure, Consumer Affairs, Food & Public Distribution. Sd/- (Dr. Joy I. Cheenath) Joint Secretary to the Government of India 2338 2956 Directorate General of Foreign Trade, (Dr. Shyan S. Agarwal Addl. Director General of Foreign Trade). Udyog Bhawan, H-Wing, Gate No. 2, Maulana Azad Road, New Delhi - 110011 Department of Food & Public Distribution I. D. No 8-12/2008-S&I., dated 23-5-2008 In paragraph 2 of the said communication, it has been stated that the Hybrid rice seed (paddy) is chemically treated and cannot be used for food or feed purposes and is unfit for human consumption. It is further stated that the intention while imposing ban on export of rice was not to ban export of seeds of Paddy. The above clarification has been issued with the approval of the Hon'ble Minister for Agriculture, Consumer Affairs, Food & Public Distribution. 8.1 From the above communication, it is very clear that when the Notification of the Ministry of Commerce was issued on 01st April 2008, the Government's intention was not to ban export of seeds of paddy. We are also convinced by the appellant's argument that the export of seeds is governed by the National Seeds Policy w....