Date of order: 14 October 2022

Key Pointers:

• The Appellant, M/s Siba International, was engaged in the export of processed buffalo meat after procuring the same from M/s. Al-Azlan Frozen Foods, Moradabad (UP) an approved processing plant for the export of boneless buffalo meat.
• After a departmental inquiry it was revealed that the processing capacity of M/s. Al-
• Azlan Frozen Foods, authorized 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 the drawback was received by the Appellant.
• The applicant submitted a penalty during the investigation under Section 114 of the Customs Act by reducing it from Rs.20,00,000/- to Rs.15,00,000, with appropriation.
• The issue is whether the penalty on frozen meat is appropriate for the Appellant?
• The Tribunal finds that there is no dispute concerning compliance with the conditions but the Respondent-Department is of the opinion that since contains a direction that exports meat and meat products must be sourced exclusively from APEDA approved plants and this M/s. Al-Azlan Frozen Foods could not produce more than 62 MT of frozen buffalo meat per day, there is improper export done by the Appellant.
• The authorities observed that since nowhere during adjudication, the Appellant had ever averred that it had exported only frozen meat and has not kept the category of export of meats to frozen one only, there is no basis in the claim made by the Department. 
• It was observed by the authorization that 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.
• The appeal is allowed and the order passed by the Commissioner of Customs, Mumbai-II vide Order-in-Appeal dated 19.07.2019 to the extent of confirmation of penalty at a reduced rate of Rs.15,00,000/- is hereby set aside with consequential relief to the Appellant.