CESTAT sets aside Penalty imposed for Improper Export of Buffalo Meat [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai set aside penalty imposed for improper export of buffalo meat.

The appeal has been preferred against the confirmation of penalty by the Commissioner of Customs (Appeals) at the reduced rate of Rs.15,00,000/- from Rs.20,00,000/- under Section 114 of the Customs Act for improper export of buffalo meat is assailed by the Appellant-Exporter, M/s Siba International in this appeal.

Siba International was engaged in export of processed buffalo meat after procuring the same from M/s. Al-Azlan Frozen Foods, Moradabad (UP) an approved processing plant for export of boneless buffalo meat as a prescribed condition under Chapter 2 of Schedule 2 of the ITC (HS) Classification of Export and Import items.

Departmental enquiry was conducted upon credible information. It revealed that processing capacity of M/s. AlAzlan Frozen Foods, authorised by APEDA, was limited to 62 MT of meat per day and having regard to the period that covered total 185 days, it could at best have processed 11472 MT of buffalo meat against which 14862.737 MT was exported and drawback was received by the Appellant.

It was, therefore, put to show-cause notice for exporting 3392.737 MT of meat in excess of its production capacity and to refund the drawback received along with interest and penalty under Section 114 for improper exportation of buffalo meat. Order-in-Original confirmed the demand but, in the Order, -in-Appeal, the Commissioner (Appeals) had dropped the demand for return of drawback on the ground that no provision exist in the Customs Act for such recovery but confirmed the penalty under Section 114 of the Customs Act by reducing it from Rs.20,00,000/- to Rs.15,00,000/-, with appropriation of the said amount which was deposited by the Appellant during investigation. A Single Bench consisting of Dr Suvendu Kumar Pati, Judicial Member observed that “Since nowhere during adjudication, the Appellant had ever averred that it had exported only frozen meat and as Note 6 has not kept the category of export of meats to frozen one only, there is no basis in the claim made by the Department. This being facts on record and having regard to the fact that the Department had not taken into consideration the entire production capacity of M/s. Al-Azlan Frozen Foods and confined it to 62 MT meat to presume such mis-declaration though it is only in respect of frozen buffalo meat only, imposition of penalty on the basis of mathematical variation is unsustainable in law and facts.”

To Read the full text of the Order CLICK HERE

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