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TMI Blog2019 (10) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ue as the seized goods is a perishable goods; And/or iii) To issue a writ in the nature of Certiorari for quashing the Seizure Order / Seizure Memo dated 06.02.2019 whereby and where under 23,660 Kgs. Of Betel Nuts (Arecanuts) as evaluated at Rs. 67,33,163/- and a truck bearing Registration No. TN 25 BC/5209 as evaluated at Rs. 23,00,000/- was seized on 06.02.2019 and all consequential proceedings in pursuance of same' And/or iv) To grant any other relief or reliefs to which the petitioners are entitled in the facts and circumstances of the case." 3. The case of the petitioner is that the petitioner no. 1 is engaged in business of trade of Betel Nuts grown in North Eastern Region of the country and the petitioner no. 2 is Transporter of goods. On 06.02.2019 when a vehicle bearing Registration No. TN 25 BC / 5209 engaged by petitioner no. 2 for carrying the Betel Nuts of petitioner no. 1, it was detained by the officials of the Customs, Forbesganj under the office of the Commissioner of Customs (Prev), Patna near Haria Bara Toll Plaza, Araria and seized the Betel Nuts approximately 23660 kg valued at Rs. 67,33,163/- and the truck in question. A seizure memo was prepared wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her it is submitted that even samples sent by the respondent authorities to 'ADRF' have failed to determine it's country of origin. In this regard learned counsel refers Annexure 'R/4' and 'R/5' to the counter affidavit. 7. Further relying upon the judgment of the Hon'ble Division Bench of this Court in the case of Rara Brotheres Vs. M.L. Dey reported under [2000 (126) E.L.T. 425 (425)], Angou Golmei Vs Vizovolie Chakha Sang reported under [1996 (81) E.L.t. 440 (Pat.)] and that by the Division Bench of Bombay High Court in teh case of M.G. Abrol, Additional Collector of Customs., Bombay Vs. Amichand Vallamji reported under [2002 (149) E.L.T. 32 (Bom.)]. Learned counsel submits that when the respondents are not able to fulfil the legal requirement of valid search and seizure, having resorted to the contention that the sample of seized Areca Nuts were tested and found to be unsafe for food and human consumption and those are not confirming the standards under the Regulation No. 2.12 and 2.3.47 (5) of the Food Safety and Standards (Food Products Standards & Food Additives) Regulations, 2011. 8. Learned counsel relied upon Section 47 of the Foods Safety and Standards Act, 2006 read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentify the country of origin. Final Conclusion "The sample of Arecanuts provided by the Assistant Commissioner, Office of the Assistant Commissioner, Customs (Prev) Division, Goriyare Chowk, Forbesganj, Bihar vide letter C.No. VIII(10) 317/Cus/Seiz/DPU/FBG/18-19/1517 dated 07.02.2019 under its seal has been tested and found to be White Whole Arecanuts of very bad quality. More than 50% of the nuts are infected with moulds inside. Such Arecanuts, irrespective of their country of origin, are not fit for human consumption/chewing." ii. Central Food Laboratory, Kolkata, Extension Centre Raxaul, Bihar in vide their Certificate No. INF/CFL/KOL/RXL/19/FEB-68 reported that:- "The sample of Betel Nut were tested as per Standard Food Safety norms falling under regulation No. 2.12 85 2.3.47 (5) of Food Safety Standards (Food Products Standards 85 Food Additives) Regulations, 2011 and found non-conforming to the standards due to presence of fungal growth, Damaged Betel Nuts and presence of Insects. Thus the sample is 'unsafe food' under Section 3(I)(ZZ)(ix) of FSS Act, 2006." iii. To ascertain the country of origin of the seized goods, further investigation viz. verification of buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper officer in such manner as the Central Government may, from time to time, determine after following the procedure hereinafter specified. (1-B) Where any goods, being goods specified under subsection (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Added Colouring matter. Thus the sample is 'unsafe food' under section 3(I)(ZZ) (ix) of FSS Act, 2006". 23. The respondents have come out with a statement that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise (Appeals). Subject: Import of edible / food products - regarding. *** Sir / Madam, Attention is invited to Board Circular No.58/2001-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed under Para 2.1 of the Circular No. 58/2001-Cus, dated 25.10.2001: (i) Samples would be drawn from the first five consecutive consignments 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 sy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch consignments. 11. It is clarified that at certain ports / airports / ICDs / CFSs where Port Health Officers (PHO) under PFA, 1954 or Authorised 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, as applicable, at the time of adjudication of the case. 2.3. Depending on the specific nature of a case, the competent 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 Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idelines for re-testing of samples- reg. World Trade Organization (WTO) negotiated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally not be denied in the ordinary course. However, there might arise circumstances 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 Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtension Center, 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 ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elines issued by 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of origin from an accredited lab within a period of three months by following the established procedures. 42. In result, this Court finds no reason to interfere with the impugned orders. The writ application has no merit. It is dismissed accordingly." 13. The ratio of the above-quoted judgement would fully apply in the facts and circumstances of this case. This Court has taken note of the two reports as stated in paragraph '8' and '9' of the counter affidavit of the respondents. The samples of Arecanuts are of very bad qualities and more than 50% of the nuts are infected with moulds inside. The petitioner no. 1 is, therefore, unable to make out a case for a direction to release the betel-nuts. The prayer as regards release is, thus, refused. For the reasons stated in paragraph '41' of the judgement in C.W.J.C. No. 10109 of 2019, this Court would not interfere with the seizure at this stage. 14. As regards the release of vehicle in question, it will be open for petitioner no. 2 to make an appropriate application before the competent authority who will consider the same and pass an appropriate order thereon within a period of 30 days from the date of filing of the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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