Decided on May 15,2015

Paramount Exports Appellant
Commr. Of Cus. (Export), Nhava Sheva Respondents


- (1.)Anil Choudhary, Member (J)
(2.)THE appellant, M/s. Paramount Exports is a merchant exporter, is in appeal against Order -in -Appeal No. 293(ADJN -EXP)/2013(JNCH)/EXP -70, dated 29 -8 -2013 passed by the Commissioner of Customs (Appeals), JNCH, Nhava Sheva. The brief facts of the case are that the appellant filed shipping bill No. 2497475 dated 6 -11 -2012 under Scheme - 21 (100% EOU Scheme) for export of tobacco product, bearing brand name 'MUST READYMADE KHAINI'. The FOB value declared was Rs. 26,77,500/ -. The goods were cleared from factory for export under Bond being ARE -1 No. 211/12 -13, dated 16 -11 -2012, CT -1 09/12 -13, dated 1 -11 -2012 which is appropriate RITC for Chewing Tobacco. The appellant is a Merchant Exporter, whereas the manufacturer is Sopariwala Export Pvt. Ltd., a 100% EOU. The goods under the shipping bill was examined on 9 -11 -2012 and it was found that tobacco product was packed in a plastic pouches. Since the tobacco products packed in plastic pouches were no longer permissible, as appeared to the Revenue in view of Govt. of India, Ministry of Finance, CBE & C letter dated 30 -8 -2011, a sample of the goods under export was forwarded for testing to Dy. Chief Chemist, who vide report dated 27 -11 -2012 opined that the percentage composition was 11.5% plastic and balance tobacco. Due to objection raised by the Department of Customs in exporting the tobacco product packed in plastic sachet, in view of the recently changed provisions for packing, the appellant vide their letter dated 20 -12 -2012 prayed that permission may be granted to take back the goods to town. As the said permission was not being granted, the appellant requested for waiver of show cause notice and requested for personal hearing and adjudication of the matter, the goods being edible and perishable. During the course of personal hearing held on 28 -12 -2012, the exporter submitted that they had purchased the material from a 100% EOU - M/s. Sopariwala Export Pvt. Ltd., which had supplied the tobacco product in plastic sachet. They were not aware of the recently changed packing provisions and accordingly stated that they have not consciously contravened any provisions of law and prayed that the permission be granted to take the cargo back to town for re -packing in accordance with law. The Additional Commissioner passed the adjudication order dated 10 -1 -2013 holding that the goods have been entered for exportation in contravention of the provisions under the Plastic Waste (Management and Handling) Rules, 2011, which are deemed to have been exported under the provisions of Section 11 of the Customs Act and further clarified by the C.B.E. & C. Circular dated 30 -8 -2011, and accordingly, the goods were held liable for absolute confiscation under Section 113(d) of the Customs Act and further the exporter was held liable to penalty under Section 114(i) to attempt to export of the alleged prohibited goods. Further, request of the appellant to take the goods back to town was also refused. Accordingly, the goods valued at Rs. 26,77,500/ - FOB were ordered to be confiscated absolutely under Section 113(d) and further penalty of Rs. 5 lakhs was imposed on the appellant -exporter under Section 114(i) of the Customs Act, 1962.
1.1. Being aggrieved, the appellant preferred an appeal before the Commissioner (Appeals), who was pleased to set aside the absolute confiscation and give option to the appellant to redeem the goods on payment of redemption fine of Rs. 5 lakhs. He, further directed that the amount of pre -deposit of Rs. 2.5 lakhs already made shall be adjusted against the penalty imposed on the appellant. Thus, the appeal was allowed in part.

Being aggrieved, the appellant is in appeal before this Tribunal on the ground that the learned Commissioner (Appeals) has failed to appreciate that it is a case of genuine mistake and there was no mala fide on the part of the appellant -exporter in carting the goods in the Customs area for export, packed in plastic sachet. Further, in view of the recent change in the legislation, as regards the mode of packing, the Commissioner (Appeals) was not justified in upholding the confiscation and imposing the high amount of redemption fine of Rs. 5 lakhs. Further, the learned Commissioner (Appeals) was not justified in confirming the amount of penalty of Rs. 5 lakhs imposed under Section 114(i) of the Act.

2.1 The appellant further draws my attention to the ruling of the Apex Court in the case of Baba Global Ltd. v. Union of India in Writ Petition (Civil) No. 466 of 2011, wherein in the case of similarly situated manufacturer -exporter in view of the undertaking given by the applicant -exporter to the effect that they are a 100% EOU established in SEZ. Further they are not in the business of selling Pan Masala, Gutkha and tobacco products manufactured in the DTA. Further undertaking that in case of exemption from Plastic Waste (Management and Handling) Rules, 2011 being granted for export of Pan Masala, Gutkha and tobacco products in plastic packaging, the petitioner company have undertaken not to sell the products inside India in violation of the said Plastic Waste (Management and Handling) Rules, with further undertaking that in case of grant of exemption from the Plastic Waste Management Rules for export of pan masala, gutkha etc. in plastic packaging against an order of export, the said exemption shall not apply to the waste and rejects. In view of such undertaking, the Hon'ble Supreme Court had directed that the petitioner Baba Global Ltd. and Another will be exempted from the operation of the Plastic Waste (Management and Handling) Rules, 2011.

2.2 The Counsel for the appellant urges that in view of the interpretation by the Hon'ble Supreme Court that the said Plastic Waste (Management and Handling) Rules, 2011 shall not be applicable in case of manufacture of tobacco products like pan masala, gutkha etc. in a 100% EOU and the products being meant for export only tobacco product can be packaged into plastic sachet. The Counsel have further filed a copy of similar undertaking on Non -judicial stamp paper given by the concerned manufacturer Sopariwala Export Pvt. Ltd. (100% EOU) being undertaking dated 12 -9 -2013 on similar lines as herein above noticed.

(3.)THE learned AR appearing for the Revenue relies on the impugned order.

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