2023 (5) TMI 668 - AT - Customs

Seeking provisional release of seized goods under section 110A of Customs Act 1962 - imports of arecanuts - to be classified under heading 8002 of First Schedule to Customs Tariff Act 1975 or under tariff item 2106 90 30 of the First Schedule to Customs Tariff Act 1975? - HELD THAT - An officer created by statute is necessarily limited by the ambit of the statute and customs officers created by section 3 of Customs Act 1962 are necessarily confined to the purpose for which such legislation was enacted viz. import and export of goods. Consequently the responsibility for or authority to enforce any other law for the time being in force would be contingent upon such law placing some prohibition on imports or exports; even such laws do not concede jurisdictional authority to customs officers except by and only upon specific conferment within such statutes. In the absence of such empowerment not only would chaos result but ever present is potential for overreach should those lacking sufficient expertise in administering such special laws misappropriate authority to enforce. The distinction between enforcing the law and enforcing compliance with the law is not so subtle as not to appeal to reasonableness. The entire regime for filtration of articles of food including testing by FSSAI-credited laboratories and reference to FSSAI before clearance thereof on import is founded upon this distinction in authority to invoke the framework of such legislation and more especially involving specialized knowledge. Customs authorities are bound by the sanction and approval accorded under the aegis of Food Safety and Standards Act 2006 by the designated authority therein as the sole determinant for invoking section 111 of Customs Act 1962 insofar as articles of food are concerned. An independent ascertainment of fitness for human consumption without reference to the statutory authority envisaged for the enforcement of Food Safety and Standards Act 2006 is not in public interest and invocation of public health no matter how convenient it may be for retention of goods is no substitute for legal jurisdiction. The prohibition in the notification cited in the impugned order cannot be made applicable to the impugned goods except by invoking provisions of Customs Act 1962 attracting consequence of misclassification; there is no whiff of such intent. The conclusion that the impugned goods are unfit for human consumption is beyond the scope of jurisdiction conferred by Customs Act 1962 on the respondent- Commissioner in the absence of determination by the designated authority under the Food Safety and Standards Act 2006 whose actions are validated by the circumscribing responsibility devolving on such authority - a validation that no customs authority can lay claim to. The grounds evinced for discarding the request for provisional release under section 110A of Customs Act 1962 are not legally tenable. It may also be inferred that provisional release is a facilitative measure. Though power to seize has inhered and as it should in Customs Act 1962 from the very beginning and indeed as legacy carried over from section 178 of Sea Customs Act 1878 for close to a century and half it was only by section 26 of Taxation Laws (Amendment) Act 2006 incorporating section 110A in Customs Act 1962 that provisional release of seized goods by Commissioner of Customs pending order of the adjudicating officer found acknowledgment in law - The law does not intend that State is enriched by fines arising from breach of the law or by substituting for the importer to trade in goods whether seized or even confiscated. Section 110A is couched in such plain language as to give no room for controversy in interpretation or speculation of legislative intent; indeed it does not even offer scope for discriminatory treatment among imported goods. The impugned goods are directed to be provisionally released on furnishing of bond to the extent of value of the goods and subject to the procedural safeguards implicit in section 47 of Customs Act 1962 within ten days of receipt of this order. Appeal disposed off.

Summary

Issues Involved:
1. Jurisdiction of Tribunal over provisional release.
2. Restrictive prescription in Foreign Trade Policy.
3. Public health and safety concerns.
4. Test reports and their validity.
5. Provisional release under section 110A of Customs Act, 1962.

Summary:

Jurisdiction of Tribunal over provisional release:
The Tribunal has jurisdiction to review the decision of the competent authority regarding 'provisional release' under section 110A of Customs Act, 1962. This position has been clarified through various decisions following the amendment in the Act by the Finance Act, 2011.

Restrictive prescription in Foreign Trade Policy:
The Tribunal noted that the restrictive prescription in the Foreign Trade Policy for controlling imports of 'arecanuts' does not apply to the tariff item 2106 90 30, as determined by the Authority for Advance Rulings. Therefore, the seizure under section 110 of Customs Act, 1962, based on this ground, is not justified.

Public health and safety concerns:
The respondent-Commissioner cited public health and safety concerns, claiming that the 'betel nuts' were unfit for human consumption. However, the Tribunal emphasized that the Customs Act, 1962 does not confer authority on customs officers to determine the fitness of food products for human consumption. Such determinations fall under the jurisdiction of the designated authority under the Food Safety and Standards Act, 2006.

Test reports and their validity:
The Tribunal found discrepancies in the test reports from different laboratories. The customs laboratory at Mumbai and the FSSAI-accredited laboratory, M/s Anacon Laboratories Pvt Ltd, provided conflicting results. The Tribunal held that the customs authorities should rely on the FSSAI-accredited laboratory's report, as per CBIC instructions.

Provisional release under section 110A of Customs Act, 1962:
The Tribunal concluded that the refusal to grant provisional release based on public health concerns and alleged prohibitions under other laws was not legally tenable. The Tribunal directed the provisional release of the goods on furnishing a bond equivalent to the value of the goods, subject to procedural safeguards under section 47 of Customs Act, 1962.

Conclusion:
The Tribunal ordered the provisional release of the seized goods within ten days of receipt of the order, emphasizing that the Customs Act, 1962 does not empower customs authorities to determine public health concerns or enforce prohibitions under other laws without specific statutory authority. The appeal was disposed of accordingly.