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TMI Blog2019 (9) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Centre, Raxaul), reporting the samples to be non confirming to the Food Safety and Standards (Food Products Standards and Food Additives) Regulation 2011, the application for provisional release of the Betel Nutes has been rejected; (iii) Quashing of the consequential order of provisional release dated 04.04.2018 (Annexure 5) vide Letter No. 2707 to the extent that provisional release has been ordered on submission of the cash security of 20 % of the value of the Truck; and (iv) Direction upon the respondents to release the goods pending disposal of the instant writ application." 2. It is the case of the petitioners that they are the registered dealers under the provisions of the Goods and Services Taxes (GST) Act and in course of day to day business the petitioners dispatched a consignment of 15865 Kgs. Betel Nuts contained in 325 bags to one M/s Mahaveer Traders of Coimbatore (Tamilnadu) by the Truck bearing Registration No. KA-01-8691 through M/s Ajay Goods Carrier on 01.02.2019 along with the requisite documents in support of the same including eway Bill. Out of the total consignment of 15865 kgs of Betel Nuts, 10350 Kgs. Contained in 208 bags belongs to petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Betel Nuts by the respondents is beyond their jurisdiction and the same is arbitrary and contrary to the provisions of the Customs Act, 1962. Referring to Section 110 of the Customs Act, learned counsel submits that it is subject to the statutory sine qua non viz reasons to believe that the goods are liable to confiscation under the Act. In the present case it is submitted that there is absolutely no reason to believe that the goods i.e. Betel Nuts are liable to confiscation under any of the provisions of the Customs Act, 1962. 8. So far as the Notification No. 9/96 issued under Section 11 of the Customs Act, 1962 is concerned, it is submitted that the same has no application because the said notification imposes restrictions on import from Nepal and is concerned with only those goods which have been exported to Nepal from countries other than India except machinery and equipment used in Nepal for the execution of a project. It is submitted that the notification applies only when goods are "Notified Goods" within the meaning of Section 11B of Chapter IVA of the Customs Act, 1962. According to learned counsel, there is no notification declaring Betel Nuts as notified goods und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3784 of of 2013 the writ application was disposed of vide order dated 04.03.2012 on agreement of the parties with a direction to release the Betel Nuts and the vehicle of the petitioner in terms of order dated 17.01.2013 passed in C.W.J.C. no. 317 of 2012. The Department of Customs, thereafter, moved a modification application being M.J.C. No. 2185 of 2013 (Annexure '7') in which a detail order dated 24.07.2013 was passed by the learned co-ordinate Bench. The operative portion of the judgment dated 24.07.2013 passed in M.J.C. No. 2185 of 2013 reads as under: "I have considered the submissions of learned counsels for the parties. On a consideration of the various provisions it is evident that betel nut or supari has not been enumerated under the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011. Thus as per the submission of learned counsel for the petitioners it would be a proprietary food that has not been standardized under the said Regulations. It would thus be required to follow the labelling requirements specified under the Regulations and must also conform to the requirement of describing as clearly as possible the nature and composi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s thus evident that it is not open to the petitioners to straightaway rely upon Section 3(1)(zz)(ix) of the Act without any reference to the standards laid down in the different Regulations. I am in agreement with the submission of learned counsel for the respondents that the case regarding samples being found adulterated is not borne out from the actual data obtained from the analysis as there is no reference to any adulterant in the course of such analysis. Moreover, I find that the prescribed standards column has not been filled up which would be the relevant point for consideration of the different data obtained from the examination of the sample of betel nut by the laboratory. Be that as it may, it is evident that the stage for taking out sample for its analysis had not yet come when the same was being transported for delivery to the processing unit for its processing by the respondents. Thus, on a consideration of the aforesaid facts and circumstances and the submissions of learned counsels for the parties, I am of the view that no modification is required to be made in the order dated 4.3.2013 passed in CWJC No.3784 of 2013. The modification application is, accordingly, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s "unsafe food" under section 3(1) (ZZ) (ix) of FSS Act, 2006." Both the reports are Annexure 'C' and 'D' respectively to the counter affidavit. 15. It is further submitted that to ascertain the country of origin of the seized goods further notification viz verification of buyer / seller and their actual work profile from jurisdictional commissionerate, verification of documents submitted by the Truck driver are being done by the Divisional office, Forbesganj. 16. It is in the aforementioned background the respondents submit that the seized goods being unfit for human consumption cannot be provisionally released. Annexure 'E' to the counter affidavit is the order of the Assistant Commissioner Customs (P) Division, Forbesganj by which he has refused to release the seized Arecanuts provisionally. It is stated that further investigation in the mater is still going on and therefore, it would not be desirable to release the Betel Nuts at this stage. 17. In paragraph 23 of the counter affidavit the respondents have stated that as regards the country of origin, ARDF's report is as follows: "The sample of arecanuts contain very small cut pieces (Chips), boiled, dried and coated wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods, being goods specified under sub-section (1- A), have been seized by a proper officer under sub-section (1), he shall prepare an inventory of such goods containing such details relating to their description, quality, quantity, mark, numbers, country of origin and other particulars as the proper officer may consider relevant to the identity of the goods in any proceedings under this Act and shall make an application to a Magistrate for the purpose of - (a)certifying the correctness of the inventory so prepared; or (b)taking, in the presence of the Magistrate, photographs of such goods, and certifying such photographs as true; or (c) allowing to draw representative samples of such goods, in the presence of the Magistrate, and certifying the correctness of any list of samples so drawn. (1-C) Where an application is made under sub-section (1-B), the Magistrate shall, as soon as may be, allow the application.] (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in order to ascertain the country of origin of the seized goods further investigation is going on. So far as the two test reports are concerned, this Court finds that those are not saying about the country of origin of the Betel Nuts. 24. In the case of M/s Ayesha Exports Vs. The Union of India (C.W.J.C. No. 7589 of 2018), this Court has recorded the views of the learned co-ordinate Bench of this Court in M.J.C. No. 2185 of 2013 which had in fact been challenged before the Hon'ble Supreme Court in Special Leave to Appeal (Civil) No. CC7331 of 2014 but the same was dismissed on 08.05.2014 keeping the question of law open. 25. This Court reiterated that in absence of there being any standardized laboratory test for tracing the country of origin, established under some statute and unless such Labs have been accredited by the competent authority and that the Labs could have the scientific method to come to a conclusion that the Betel Nut is of a particular country's origin, it would not be in the interest of justice to direct the petitioner to pay the custom's duty. 26. This Court finds that in the present case the request of the petitioner to release the Betel Nuts have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2001-Cus dated 25.10.2001 which provides detailed guidelines for examination and testing of food item prior to its testing and clearance by Customs officers under the provisions of Prevention of Food Adulteration Act, 1954 (PFA Act, 1954). 2. Further, in terms of Para 8 of Chapter I A (General Notes Regarding Import Policy) of the ITC (HS) Classification of Export and Import items, import of all such edible/food products including tea, domestic sale and manufacture of which are governed by Prevention of Food Adulteration Act, 1954, shall be subject to all the conditions laid down in the aforesaid Act. Import of all these products will have to comply with the quality and packaging requirements as laid down in the Act. Compliance of these conditions is to be ensured before allowing customs clearance of the consignment. 3. To consolidate the laws relating to food and to provide for a systematic and scientific development of Food Processing Industries, the government has enacted The Food Safety and Standards Act, 2006 (FSS Act, 2006). Under the Act, the Food Safety and Standards Authority of India (FSSAI) has been established to lay down standards and regulate/monitor the manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of each food item, imported by a particular importer and referred to Authorised Representative of FSSAI or PHOs, as the case may be, for testing to ascertain the quality and health safety standards of the consignments. (ii) In the event of the samples conforming to the prescribed standards, the Customs would switch to a system of checking 5% - 20% of the consignments of these food items on a random basis, for checking conformity to the prescribed standards. The selection of food items for random checking and testing would be done by the Customs taking into consideration factors like the nature of the food products, its source of origin as well as track record of the importers as well as information received from FSSAI from time to time. (iii In case, a sample drawn from a food item in a particular consignment fails to meet the prescribed standards, the Customs would place the import of the said consignment on alert, discontinue random checking for import of such food items and revert to the procedure of compulsory checking. The system of random sampling for import of such food items would be restored only if the test results of the samples drawn from the 5 consecutive con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orised officers under FSS Act, 2006 are not available, the samples will be drawn by Customs and the same may be got tested from the nearest Central Food Laboratory or a laboratory authorized for such testing by DGHS or FSSAI. 12. RMD shall develop an application software that incorporates the stipulation of testing of imported foodstuff and alerts the Customs officer to the effect the number of past shipments already tested and found fit warrants future shipments need not ordinarily be tested. This should apply regardless of port of import so long as the importer, supplier and item of import do not change. In other words, if such a shipment is imported say, at Mumbai and the previous 5 shipments imported at, say, Delhi have passed the test, then the next shipment at Mumbai need not be tested. A suitable data base would also be prepared at each Custom House to indicate the compliance history of importers. 13. The Board Circular 58/2001-Cus dated 25.10.2001 stands modified to above extent. 14. These instructions may be brought to the notice of all concerned by way of issuance of suitable Public Notice / Standing Order. 15. Difficulties, if any, in implementation of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent authority may, for reasons to be recorded in writing, increase or decrease the amount of security deposit as indicated above. 3.In this context, attention is invited to the judgment dated 28.07.2016 of the Hon'ble Madras High Court in Writ Appeal No. 377 of 2016 in the case of Malabar Diamond Gallery Pvt. Ltd. Vs Additional Director General, DRI, Chennai & Ors. Wherein the Hon'ble Court has given sufficient discretion to the adjudicating authority to deny provisional release of goods in any case where the goods are smuggled or import is treated as illegal and in violation of the statutory provisions. In terms of the said judgment, by specifying the relevance and reason, the adjudicating authority may deny provisional release of any goods which are liable to confiscation under Section 111 or Section 113 as they would fall under the definition of prohibited goods, in terms of Section 2(33) of the Customs Act, 1962." 29. Further learned counsel has placed before this Court the information issued by the Director (Imports) of the Food Safety Standards Authority of India (Statutory Authority established under the Food Safety and Standards Act, 2006) which reads as under : "F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated Trade Facilitation Agreement (TFA),which aims at simplifying the trade processes and bringing down barriers to trade has come into force w.e.f 22nd February, 2017. India is a signatory to this agreement. 2) India has placed a number of trade related measures negotiated under the TFA in Category A. Article 5.3.1 envisages granting an opportunity for a second test in case the first test result of a sampletaken upon arrival of goods declared for importation shows an adverse finding. Further Article 5.3.3makes it obligatory to consider the result of the second test, if any, for the release and clearance of goods, and, if appropriate, may accept the results of such test. The aforementioned Articles have been placed incategory A. In order to have uniformity in approach among the field formations with regard to re-testing of samples, the following procedure is prescribed: a. Customs officers may draw the samples from import consignments for testing in case of consignments wherever needed. The results of all test reports, adverse or otherwise, shall be communicated to the importer or his authorized representative/ Customs Broker immediately on its receipt. b. In case the impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s where the customs officer is constrained to deny the re-testing facility. Board expects that such denial would be occasional and on reasonable grounds to be recorded in writing. h. Where the re-testing procedure is done at the instance of the department instead of the importer, the above procedure shall be followed mutatis mutandis.3) Difficulties, if any, in implementation of this circular, should be brought to the notice of the Board.4) Hindi version of the circular will follow. Yours faithfully (Zubair Riaz) Director (customs) 31. In the aforesaid background the latest development has come vide office Memorandum Dated 4th June, 2019 issued by the Government of India in its Ministry of Commerce and Industry, Department for Promotion and Industry and Internal Trade, the office Memorandum reads as under" " No. 12013/14/2019/NPC-QCI Government of India Ministry of Commerce and Industry Department of Promotion of Industry and Internal Trade NPC-QCI Section Udyog Bhawan, New Delhi Dated 4th June, 2019 OFFICE MEMORANDUM Subject: A letter from Chairman, Central Board of Indirect Taxes & Customs regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nter, Raxaul). 33. As is evident from the discussions made in the judgment dated 24.07.2013 passed in M.J.C. No. 2185 of 2013, learned Writ Court hearing the modification application was not apprised of the fact that all consignment of high risk food items are liable to be referred to authorized representative of FSSAI or PHOs as the case may be for testing and clearance for testing and clearance can be allowed only after testing report as per the instructions contained in the Custom Circular No. 58/2001 dated 25.10.2001 (referred the Circular No. 3/11). The Court was also not informed that the Custom authorities were authorized to take samples and get them tested from the nearest Central Food Laboratory. Further it appears that the guidelines for provisional release of the seized goods as contained in Circular No. 35 of 20017 was not placed before the learned Writ Court. The guidelines specifically provides in paragraph '2' that the request for provisional release of the seized food shall not be allowed in the given cases, one of the cases in which release shall not be allowed is where the goods do not fulfill the statutory compliance requirements /obligations in terms of any Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Department of Customs to streamline the divergent procedures being followed for grant of provisional release of the goods which are seized under Section 110 of the Customs Act, 1962. The provisional release of the seized goods is to be refused when the goods do not fulfill the statutory compliance requirements of any Act, Rule, Regulation or any other law for the time being enforced. 37. In the present case, since the Food Laboratory Report has found that the Betel Nut are not fit for human consumption, in the opinion of this Court, no fault may be found with the rejection of the request of the petitioners for grant of release. 38. Now coming to the another question with regard to the sustainability of the seizure. This Court had earlier occasion to deal one mater being C.W.J.C. No. 7589 of 2018 (M/s Ayesha Exports vs. The Union of India and Ors.). In the said case the solitary question which was considered by this Court was as to whether the seizure report may be allowed to sustain when it is an admitted position that M/s Areca Nut Research and Development Foundation, Manglore is not accredited laboratory and it's report has been held to be of no legal sanctity by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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