TMI Blog2019 (10) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... f filing of the application. - Civil Writ Jurisdiction Case No.6657 of 2019 - - - Dated:- 5-9-2019 - HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD For the Petitioner/s : Mr. Amit Pandey, Advocate For the Respondent/s : Mr. Manoj Kumar Singh, C.G.C. C.A.V JUDGMENT Heard Mr. Amit Pandey, learned counsel for the petitioner and Mr. Anshuman Singh, learned counsel for the Union of India. 2. The petitioner in the present writ application seeks the following reliefs: i) To issue a writ in the nature of mandamus commanding the authorities to releae 23,660 kgs of Betel Nuts (Arecanuts) as evaluated at ₹ 67,33,163/- and a truck bearing Registration No. TN 25 BC/5209 as evaluated at ₹ 23,00,000/- which was seized vide Seizure Memo dated 06.02.2019 unconditionally; And/or ii) To direct the Respondent Authority to upkeep the condition and safety of goods so as to prevent deterioration in it s value 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led. It is submitted that the respondent authorities have asserted that they had specific information received from their Additional Commissioner over telephone that the Betel Nuts of third country or origin were being transported from Gauhati to Karnataka and getting upon the said information the Truck was intercepted. It is submitted that there was no authentic information that the respondent authorities which could be deemed to be actionable and upon which they proceeded to search of truck in question. It is further submitted that the internal information, if any, was required to be recorded in Form DRI-1. It s authentication were required to be verified and then only action should have been taken. 6. Further learned counsel for the petitioner submits that the description given by the customs officials that the Areca Nuts are appearing as small and round shaped and light brown in colour whcih are the character of Malasian origin is not correct and has no basis. It is submitted that by seeing the shape and colour of Betel Nut their country of origin cannot be determined. Further it is submitted that even samples sent by the respondent authorities to ADRF have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e writ application on the various grounds which have been taken note of by this Court in detail while considering the connected writ application bearing C.W.J.C. No. 10109 of 2019. The contention of the learned counsel for the Union of India has been discussed in detail in the said judgment. The same are not being reiterated hereunder. Paragraph 8 and 9 of the counter affidavit are however reproduced hereunder for a ready reference: 8. That ascertain the country of origin of the seized Dried Areca Nuts, samples were sent to (1.) Arecanut Research Development Foundation, Varanashi Towers, Mission Street, Mangalore, Karnataka and (2.) Central Food Laboratory, Kolkata, Extension Centre Raxual, Bihar. i. The Arecanut Research Development Foundation, Mangalore vide their letter ARDF/CUS/FBG/18-19/ 1517 dated 14.02.2019 provided test report as under:- Texture The Arecanuts (Betel Nuts) supplied are of medium in size with round to oval in shape. The samples of Arecanuts supplied for testing the country of origin are of very bad qualities and more than 50% of the nuts are infected with moulds inside and found difficult to study the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in C.W.J.C. No. 10109 of 2019 are quoted hereunder: 20.Having heard learned counsel for the petitioner as well as for the Union of India, this Court finds that the whole argument of the petitioner for purpose of quashing of the seizure list revolves around the provision of Section 110 of the Customs Act. Section 110 of the Customs Act is quoted hereunder for a ready reference: 110. Seizure of goods, documents and things. -(1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods : Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. Inserted by Act 80 of 1985, S. 8 (w.e.f. 27-2-1985) [(1-A) The Central Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods, documents and things seized pending adjudication.- Any goods, documents, or things seized under section 110, pending the order of the Substituted by Act 8 of 2011, S. 47, for adjudicating officer and Commissioner of Customs . [adjudicating authority], be released to the owner on taking a bond from him in the proper form with such security and conditions as the 3[adjudicating authority] may require.] 21. In the facts of the present case, the counter affidavit of the respondents states that the Cut Dried Arecanuts is of dark pink colour which are not the characteristics of Indian origin Arecanuts because the Arecanuts of Indian origin are normally Oval in shape. In order to ascertain the country of origin of the seized cut dried Arecanuts, samples were sent to the two Laboratories. The test report of ARDF, Mangalore reads as under: The sample of areca nuts contain very small cut pieces (Chips), boiled, dried and coated with some colouring material. The colour is red and very shiny. It is not the natural colour of arecanut or its extract. They suspect that the arecanut pieces are coated with some artificial colouring materials . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance upon the test report given by the two test labs, in which it has been reported that the sample is unsafe food for human consumption; while in any of the cases referred by the petitioner no such report was available at that point of time. In view of the same it would not be appropriate to release the seized goods for human consumption. 27. Learned counsel for the Union of India has placed before this Court a Government of India s Circular No. 3 of 2011 issued by Ministry of Finance in the Department of Revenue, Central Board of Excise and Customs on 6th January, 2011. The Circular provides detailed guidelines for examination and testing of food items prior to its testing and clearance by Customs Officers under the provisions of Prevention of Food Adulteration Act, 1954 (in short PFA Act, 1954 ). It is submitted that in terms of the said Circular dated 6th January, 2011, the Custom Officers are competent to get the samples tested from the nearest Central Food Laboratory or a Laboratory authorized for such testing by DGHS or FSSI. Circular No. 3 of 2011 is reproduced hereinbelow for ready reference: Circular No. 3/2011-Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988; Solvent Extracted Oil, Deoiled Meal, and Edible Flour Control (Order), 1967; Milk and Milk Products Order, 1992 etc shall be repealed from a date to be notified. 4. The FSSAI has taken over PHO functions at select ports such as Nava Sheva and Mumbai with effect from 13.09.2010 with the stipulation that the existing rule and procedures will continue to be followed without any change till FSSAI regulations are notified. Thus, FSSAI has replaced PHO with its authorized officers at abovementioned ports in terms of section 47 (5) of the FSS Act, 2006. 5. Difficulties have been reported to Board by certain importers regarding delay in testing of samples and clearance of goods consequent upon implementation of FSS Act, 2006 at select ports. 6. It is also noted that vide Policy Circular 25(RE- 2003)/2002-007 dated 28.01.2004 and 37(RE-2003)/2002- 2007 dated 14.06.2004, the DGFT has modified the procedure for sampling of imported edible/Food Products. 7. Accordingly, the procedure of clearance of food articles has been revisited by the Board, and following modified procedure has been prescribed: (a) All c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items, the language and other major requirements of the label like mention of best before date, nutrition information etc. should comply the labeling provisions under PFA Rules, failing which sample may not be drawn from such consignment for testing. 9.It is also clarified that Risk Management System (RMS) module for import consignments of edible / food items, presently does not provide for random sampling as it is one of its CCR (Compulsory Customs Requirements) targets. Accordingly, Risk Management System (RMS) shall take necessary steps to modify the RMS module to conform to the new requirements. Till such time, this modification is carried out, Customs shall take appropriate decision to waive the CCR requirements in respect of food items not covered under Para 7 (a) and 7 (b) above and to the extent mentioned under Para 7 (c) above. In terms of Circular No.43/2005-Cus dated 24th November, 2005 such a course of action shall, however, be taken only with the prior approval of the jurisdictional Commissioner of Customs or an officer authorized by him for this purpose, who shall not be below the rank of Addl./Joint Commissioner of Customs, and after recording the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (R. P. Singh) Director (Customs) 28. Learned counsel for the Union of India, Department of Customs and Excise placed before this Court a Circular No. 35 of 2017 dated 16th August, 2017 which provides guidelines for provisional release of seized imported goods pending adjudication under Section 110 A of the Customs Act, 1962. The relevant part of the guidelines as contained in paragraph 2, 2.1., 2.2, 2.3 and 3 are quoted hereunder for a ready reference: 2. While provisional release of seized imported good is under Section 110A of the Customs Act, 1962 may normally be considered by the competent adjudicating authority upon a request made by the owner of the seized goods, provisional release shall not be allowed in the following cases - (i) Goods prohibited under the Customs Act, 1962 or any other Act for the time being in force; (ii) Goods that do not fulfill the statutory compliance requirements/obligations in terms of any Act, Rule, Regulation or any other law for the time being in force; (iii) Goods specified in or notified under Section 123 of the Customs Act, 1962; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia (Statutory Authority established under the Food Safety and Standards Act, 2006) which reads as under : File No.1-1600/FSSAI/Imports/2016 (Part18) Food Safety and Standards Authority of India (A Statutory Authority established under the Food Safety and Standards Act, 2006) FDA Bhawan, Kotla road, New Delhi-110002 20 November, 2018 Import of Betel Nut/Areca Nut Standards of areca nuts are prescribed under sub-regulation 2.3.55 of Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 and also in Chapter 2 of Food Safety Standards (Contaminates, Toxins Residues) Regulations 2011. Further, limits of aflatoxin as 15 ug/kg in areca nut is prescribed in the Food Safety and Standards (Contaminants, toxins and Residues) Regulation, 2011 through amendment dated 27.12.2017. 2. Areca nut, the fruit of the areca palm (Areca catechu), commonly referred to as betel nut is prone to the formation of fungal growth during various stages of its production, storage and transportation. Accordingly, it has been decided that the consignments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory 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 importer or his agent intends to request the Additional/ Joint Commissioner of Customs for a re-rest, then the same shall be made in writing to the said officer within a period of ten days from the receipt of the communication of the test results of the first test. Customs officers may take a reasoned view in case the importer or his authorized representative Customs Broker is unable to do so for reasons beyond his control. c. Where the Additional/Joint Commissioner of Customs grants an opportunity for a second test, he must clearly indicate in writing the name and address of the laboratory/institution where the second test can be carried out. Such referral for re-testing may be made only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round 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 regarding matter related to import of Areca Nut / Betel Nut. The undersigned is directed to refer to D.O. letter No. 451/24/2018 Cus.V dated 05.04.2019 [copy enclosed] received from Chairman, Central Board of Indirect Taxes Customs (CBITC), Department of Revenue, M/o Finance addressed to Secretary, DPIIT regarding matter related to import of Areca nut /Betel nut. 2. In this regard, it is stated that the matter was referred to BABL and NABL vide email dated 16.05.2019 (copy enclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive 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 Act, Rule, Regulation or any other law for the time being enforced. 34. Further the information furnished by the Director (Imports) in the communication dated 20th November, 2018 with regard to merit of Betel/Areca Nut are also important to appreciate. It clearly provides that Areca Nuts, common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the learned Writ Court in Salsar Transport Company (supra). In the same case the seizure of Betel Nuts was sought to be done on the sole consideration that the report of ADRF, Manglore declared that the Betel Nuts seemed to be of Indonesian O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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